Rhodes scholars struggle with colonialism’s legacy TUESDAY 31 MAY 2016 Briefing The commodities trader has announced the exit ofYusuf Alireza and unveiled plans to sell NobleAmericas Ene
Trang 1Prices are latest for edition Data provided by Morningstar
CHRIS GILES AND JIM PICKARD
Hedge funds and investment bankshave commissioned private exit polls
in a bid to make profits from the result
of the UK referendum on EU ship next month
member-By finding out voting patterns early onJune 23 and predicting the outcome,traders can lay big bets on the result
They hope to be the first market pants to make a mint on a government-induced swing in sterling since GeorgeSoros bet against the pound when itcrashed out of the then Europeanexchange rate mechanism in 1992
partici-Early indications of the likely result inthe referendum will be indirectly visiblefrom foreign exchange and sterlingderivative markets before the pollsclose, if big money is bet on the result
The hedge funds are exploiting rules
that permit exit polls on the day of thereferendum so long as they are not pub-lished until voting closes at 10pm
Polling companies say demand is highfor their private services on referendumday “Hedge funds have asked for exitpolls and for hourly polls on the day
Banks are certainly commissioningpolls for their own consumption that arenever released,” said one pollster
Another said his company was ing lots of calls from asset managers ask-ing when its next research was comingout “We are also being asked if we will
receiv-do polls on the day,” he said “People inthe City are wanting a head start.”
The cost of a basic exit poll is about
£500,000, said an investment industryinsider That is far lower than potentialprofits from finding out whether Leave
or Remain are likely to win
A big move in sterling is guaranteed
on the result, with a modest riseexpected if Remain wins and a tankinganticipated if there is a vote to leave
Markets have all but discounted aLeave vote, said Adam Cole of RBC Capi-tal Markets
“The UK’s implied EU exit risk mium has collapsed to the point wherethe implied probability of exit is close tothe level before last May’s election,when few thought there would even be areferendum,” he said, raising the pros-pect of wild sterling swings if Leaveseems to be doing well on the day
pre-Voters will be able to deduce whotraders think is winning from the price
of insurance against large gains or losses
in the value of sterling on polling day
Future of Europe page 2 Editorial Comment page 12 Janan Ganesh page 13 Lex page 16
Hedge funds pay for exit polls to make mint on early sign of referendum result
The scholarship set up by Cecil Rhodes
using money made from diamond
mines in southern Africa is making its
recipients uneasy Amid a campaign in
Oxford to take down a statue of the
adventurer, scholars struggle to come
to terms with being given such
gilt-edged opportunities that have their
origins in colonial exploits The trust,
which is seeking to dish out awards
beyond the former empire, says it is
bound by the terms of Rhodes’ will
Rhodes scholars struggle
with colonialism’s legacy
TUESDAY 31 MAY 2016
Briefing
The commodities trader has announced the exit ofYusuf Alireza and unveiled plans to sell NobleAmericas Energy Solutions, one of its few remainingcrown jewels.— PAGE 17; LEX, PAGE 16; ANALYSIS, PAGE 19
Fifty-one company leaders from the EuropeanRound Table of Industrialists have written to the FTwarning of the consequences, for the continent and
UK, of an exit from the EU.— PAGE 2; LETTERS, PAGE 12
Alliance Trust has confirmed that it has received anapproach from Jacob Rothschild’s investment trustabout a takeover to create a group with a value ofmore than £5bn.— REPORT AND ANALYSIS, PAGES 17 & 21
Lord Waldegrave, former Tory ministerand now provost of Eton College, hasthreatened to quit the party over agovernment proposal that employersshould find out if job candidates went
to a private school.— PAGE 3
Iraqi forces have made progress and hope to claimtheir biggest victory against the militants but, withthousands of civilians still inside the city, they facetheir sternest test.— PAGE 4; HASSAN HASSAN, PAGE 13
Spending by European members is set to rise for thefirst time in nearly a decade, as secretary-generalJens Stoltenberg warned that a British vote to exitthe EU would threaten the increase.— PAGE 6
Jaguar Land Rover profits have fallen 40 per centafter slowing sales in China, where emissionsregulations in big cities and less favourable marketconditions have hurt performance.— PAGE 21
Datawatch
UK £2.70 Channel Islands £3.00; Republic of Ireland €3.00
© THE FINANCIAL TIMES LTD 2016
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Source: UN population statistics
Annual % change
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Pain barrier
Nigeria on the economic edge
BIG READ, PAGE 11
Refugee returns
Profits flow from Germany’s
Xi’s long march
China’s president is leading the country
WORLD BUSINESS NEWSPAPER
Eastern Europe’s population has been falling for over 20 years, a feature unique to the region The drop peaked in the early 2000s and has since eased Emigration and low fertility rates are the main factors
blogs.ft.com/ftdata
DUNCAN ROBINSON — BRUSSELS
Brussels is to call on EU governments
not to ban or limit services such as Uber
and Airbnb, in a bid to head off a
regula-tory onslaught from national
authori-ties on the “sharing economy”
The European Commission will this
week set out guidelines to harmonise
the often wildly different treatment
faced by businesses shaking up sectors
ranging from accommodation to
trans-port across the 28-country bloc
While businesses such as ride-hailing
company Uber have been welcomed by
countries including the UK, their
execu-tives have been threatened with fines or
even jail in places such as France
Coherent EU-wide regulation would
provide a big boost to these businesses,
negating the need for companies to havefights with 28 separate watchdogs
Bans on services should be a ure of last resort” for governments,according to draft guidelines seen by theFinancial Times and to be published onThursday
“meas-The move to help new entrants willease some of the tension over technol-ogy regulation between Brussels andWashington, where Europe’s efforts torein in the market power of the likes ofGoogle and Apple have caused friction
Last year, US President Barack Obamaaccused the EU of regulation that was
“designed to carve out some of theircommercial interests”
But while the bulk of the new lines will be welcomed by the predomi-nantly US groups that dominate the so-
guide-called sharing economy sector, somewill cause concern in Silicon Valley Thecommission suggests that companiesthat do not allow their operators to settheir own prices or that force them totake customers could be considered an
“employment relationship”
Any such definition would be resisted
by Uber, which has vociferously arguedthat its drivers are not employees,meaning that the company avoids issuessuch as contributions to social insur-ance schemes on their behalf
The commission move comes afterservices such as Uber faced partialprohibition in countries across the EU,including Belgium, the Netherlands,France and Germany
Brussels criticised moves such asBerlin’s attempt to crack down on
Airbnb hosts by introducing fines of up
to €100,000 for those who rent out theirentire apartments on the home-lettingwebsite The commission said suchrules were “generally difficult to justify”
Instead, countries should considermeasures such as introducing limits onthe number of days someone can rentout an apartment
The commission also came out indefence of rating systems used by thelikes of Uber, arguing that being able torate a driver can lead to safer services
Companies such as Uber have alreadycomplained to Brussels — which isresponsible for ensuring that the EU’streaties are enforced — about theirtreatment in various countries Results
of these investigations are expected in afew months
Brussels urges light-touch rules
for ‘sharing economy’ businesses
3 Push to harmonise regulation across EU 3 Bid to ease tension over Uber and Airbnb
Cook passes
10,000 runs in
England win
England captain Alastair Cook
cele-brates victory over Sri Lanka with
team-mate Nick Compton yesterday, shortly
after he became the youngest player to
score 10,000 runs in test cricket
Cook passed the landmark as he
scored 47 not out in the second innings
at Durham to help England win the
second Test against Sri Lanka by nine
wickets, adding to their victory at
Head-ingley last week and sealing the series
The 31-year-old left-hander is five
months younger than Sachin Tendulkar
was when the Indian player passed
10,000 runs He is also the first England
player to reach the mark “It’s a very
special moment for me,” Cook said
“You forget about all the hard times you
have as a cricketer.”
Jason Cairnduff/Livepic/Reuters
Bans on services should be a
‘measure of last resort’
Draft guidelines from Brussels
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KATE ALLEN
The parents of a Conservative activist,who complained of bullying and thencommitted suicide, said shortly beforethe start of the inquest into their son’sdeath that they are considering takinglegal action against those they holdresponsible for his fate
Elliott Johnson, 21, took his life last tember shortly after complaining toConservative party headquarters that hehad been bullied by Mark Clarke, a Toryyouth organiser Mr Clarke was expelledfrom the party last autumn and its entireyouth wing suspended as the scandalspiralled into accusations of systemicbullying and sexual harassment duringlastyear’sgeneralelectioncampaign
Sep-Grant Shapps, who was the party’s chairman before the election, resignedfrom the government in November, say-ing: “The buck should stop with me.”
co-Ray and Alison Johnson, the parents,have repeatedly called for Lord Feld-man, the Conservative party chairman,
to stand down, saying he should bear
ultimate responsibility for the conduct
of party campaigners Lord Feldman hasinsisted he was unaware of the bullyingclaims,whichhehascalled“abhorrent”
The Conservatives have sioned an independent inquiry into thescandal, which is being carried out bylaw firm Clifford Chance and overseen
commis-by Lord Pannick QC The Johnsons havedeclined to participate in the inquirybecausetheyfearit will not beimpartial
The inquest into Johnson’s death willopen today Mr and Mrs Johnson saidthey hoped the hearing would acknowl-edge the role that the alleged bullyingplayed However, the coroner will notquestion Conservative party members
In a ruling in March, Tom Osborne, thesenior coroner for Bedfordshire andLuton, said it would be “beyond theproper scope” of the hearing, a decisiontheJohnsonshavequestioned
Mr Johnson, who will make a ment at the inquest, told the Guardiannewspaper that he was considering arange of legal options to pursue those heconsidersresponsibleforhisson’sdeath
state-Tory party
Parents of activist who died consider taking legal action
PETER CAMPBELL
MOTOR INDUSTRY CORRESPONDENT
The relaunch of the BBC’s Top Gear
pro-gramme was watched by 4.4m people,falling short of the 5m target ChrisEvans, its new host, had set
The number is the lowest audience for
the opening episode of a Top Gear series
for a decade, indicating the scale of thechallenge facing the BBC to maintain thepopularity of one of its most lucrativeexports following the departure of hostsJeremy Clarkson, James May and Rich-ard Hammond last year The pro-gramme has an estimated global income
of £150m
The total viewership for Sunday’s sode will rise in the coming days, how-ever, after more people watch the show
epi-on the BBC’s iPlayer catch-up service, anincreasingly popular platform
Final figures will not be known foranother week Mr Evans had said hewould be “disappointed” if the viewer-ship figures failed to break 5m
The corporation has poured
resources into the refreshed gramme, with Mr Evans joined by Matt
pro-LeBlanc, the star of Friends The opening
episode of the new series saw the pairrace three-wheelers from London toBlackpool, featured a dogfight betweenAmerican muscle cars at the Top Guntraining centre in Nevada, and saw aBritish-built off-road desert buggychased across a desert by drones and aracing bike
In spite of the eye-catching stunts,critical reception was poor, with reviewsnoting the lack of chemistry betweenthe co-hosts One report branded it
“Flop Gear”
Mr Clarkson was sacked last yearafter assaulting one of the programme’sproducers, while his co-hosts and theshow’s long-time producer, AndyWilman, quit All four have since signedwith Amazon in a $250m deal to pro-
duce a motoring show called Grand Tour
for its Prime video service this year
Top Gear was the second-most
watched programme on Sunday, after
Countryfile.
Lucrative export
Revamped ‘Top Gear’ stalls
on first lap of its relaunch
KATE ALLEN
David Cameron was fighting to stop his
campaign to keep Britain in the EU from
being overwhelmed by internal strife in
the Conservative party as the Remain
camp hit back against highly personal
attacks against the prime minister
Mr Cameron hit the campaign trail
yesterday with Sadiq Khan, Labour’s
London mayor, in an attempt to show
cross-party unity Speaking in
south-west London, Mr Cameron said the two
were campaigning together “because we
love our country, we want our country
to be the best we possibly can, to be thestrongest, to be the greatest”
At the same time he was warned thatthe referendum was doing serious dam-age to the Conservative party MervynKing, former Bank of England governor,blamed the government for the ill-tem-pered tone of the discussion, saying the
“wildly exaggerated claims” on bothsides “insult the intelligence of voters”
Mr Cameron would find it “a lot moredifficult than [he] surely must havehoped” to bring his party back togetheragain afterwards, Lord King predicted
Ken Clarke, the former chancellor —and a member of the John Major govern-ment that was hamstrung by Tory divi-sions over Europe — warned the Con-
servatives that infighting was pletely unhelpful” and “a diversion”
“com-“The public are getting fed up of Torycivil wars when they thought they werebeing asked about the future of thiscountry for their children and grand-children,” he said
But Mr Clarke fired a salvo of his ownwhen he said the Leave campaign hadturned into “a leadership bid” by BorisJohnson, a leading Eurosceptic and MrKhan’s predecessor as London’s mayor
Mr Johnson was “a much nicer version
of Donald Trump”, Mr Clarke said as heaccused Leave campaigners of adoptingtactics used by the US Republican
Tory Eurosceptics launched attacksagainst Mr Cameron over the weekend
in what appeared to be an orchestrated
campaign Three Tory MPs — Sir BillCash, Nadine Dorries and AndrewBridgen — said they would attempt tolaunch a leadership challenge immedi-ately after the referendum on June 23
Mr Bridgen said that, whatever theoutcome of the referendum, Mr Cam-eron was “probably finished as partyleader”, while Ms Dorries said the primeminister would be “toast within days” ifRemain won by a narrow margin “Hehas lied profoundly,” she said
Mr Cameron said: “I will do thing I can in the next 24 days to speakclearly, to speak positively about thefuture of our country and why this mat-ters so much.”
every-The prime minister’s joint ance with Mr Khan was meant to dem-
appear-onstrate what he called their “unity ofpurpose” The pair presented a new bat-tle bus and a five-point pledge card in anattempt to boost the campaign for Brit-ain to remain in the EU
It was an unexpected pairing after therecent mayoral election campaign, inwhich Mr Cameron accused Mr Khan of
“sharing platform after platform withextremists and anti-Semites” Yesterday
Mr Cameron hailed what he said was an
“extraordinary coalition” of ers and called Mr Khan a “proud Mus-lim and proud Brit”
campaign-Douglas Carswell, the UK ence party MP and former Tory, cited
Independ-Mr Cameron’s past remarks about Independ-MrKhan as evidence the prime minister
“cannot be trusted”
Future of Europe
Cameron and Khan share Remain platform
PM and Labour’s London
mayor join forces as civil
war rages in Tory party
SARAH GORDON — BUSINESS EDITOR
Fifty-one chairmen and chief tives of Europe’s leading multinationalcompanies have warned of the negativeconsequences of a British exit from the
execu-EU, for the rest of Europe as well as theUK
In a letter to the Financial Times, themembers of the European Round Table
of Industrialists — including VittorioColao, chief executive of Vodafone, IanDavis, chairman of Rolls-Royce, Lak-shmi Mittal, chairman of ArcelorMittal,and the chief executives of Møller-Maersk, Royal Dutch Shell, Nestlé andSiemens — said Europe was at a “fork inthe road” and that an “unravelling” ofthe EU’s single market and its ruleswould reduce prosperity
“While respecting the decision of thepeople in the United Kingdom, webelieve that a Europe without the UKwould be weaker, just as the UK itselfwould be weaker outside Europe,” theywrote “We believe the case for Europehas never been stronger.”
During the past 60 years, the groupsaid, “businesses have flourished andfamilies have generally become moreprosperous thanks to closer tiesbetween people and institutions acrossEurope”
It argued the EU’s size gave it mendous” bargaining power in interna-tional trade negotiations, as well as anability to defend jobs and industriesagainst external threats
“tre-ERT members’ companies haveannual revenues of €2.1bn and sustainabout 7m jobs in Europe, including inthe UK The group advocates policychange and has close ties with nationaland regional governments
Benoît Potier, chief executive ofFrance’s Air Liquide and chairman ofthe ERT, said Europe faced urgent chal-lenges that could not be addressed by member states acting alone
From a business perspective, theseincluded ensuring the security of energysupply, creating a digital single market,strengthening oversight of the bankingsystem to avoid a repetition of the finan-cial crisis, allowing small businesses totap into capital and human resourcesacross borders, and improving Europe’seducation systems
Mr Potier said it was especially urgent
to co-operate across borders because ofthe refugee crisis and terrorism
“Policymakers both at European leveland in the member states should keep inmind the need to foster European com-petitiveness and cohesion, especiallybecause markets [are becoming] moreand more global,” he said
“That is the only way we can achievesustainable growth and enhance jobprospects, especially for young peopleand future generations.”
The letter from the ERT adds to a rus of concern from the big businesscommunity, both inside and outside the
cho-UK, about the consequences of a tial British exit from the EU Thismonth, 15 business leaders, includingthe heads of GE, Cisco, Mars and Airbus,wrote to the FT to warn that economicuncertainty caused by a British exit
poten-“could materially affect major tional businesses’ future investmentdecisions” in the UK
interna-Letters page 12
Prosperity fear
EU would be weaker and poorer if UK left, business leaders warn
JOSHUA CHAFFIN — CHRISTCHURCH,
DORSET
As a young lawyer, Christopher Chope
campaigned for Britain to stay in
Europe in the 1975 referendum battle,
rallying voters with the slogan: “For
your children and your grandchildren!”
But as Britain prepares for another
national vote on what later became the
EU, he has changed sides
Mr Chope, 69, is a long-serving
Con-servative member of parliament — and
a father — and he wants to leave the EU
His change of heart is very much in
keeping with the views of his
constitu-ents in Christchurch, a town that boasts
the UK’s highest percentage of over-60s
It also matches the sentiments of
grey-ing voters throughout Britain, who
could yet decide the fate of the country’s
ties with Brussels “There is something
to be said for experience in these
mat-ters,” said Mr Chope
There is plenty of experience in
Christchurch, a handsome Dorset town
where 50 is the new 30 and 70 year olds
refer to “the older generations” It is rich
pickings for the Leave campaign, which
is betting it will take as much as 80 per
cent of the town’s vote on June 23
That goal may not be so
unreasona-ble In an informal poll of the high street
this week, 15 older-looking voters said
they were determined to leave the EU
while only five wished to stay Eight
oth-ers were undecided
Such attitudes mirror national trends
UK polls have identified the over-60s as
among the EU’s most determined foes
Their support is all the more valuable,
since older citizens are far more likely to
turn out than younger ones
At first glance, the legions of greying
Brexit supporters seem to confound
expectations: older voters are generally
thought to be more conservative and
risk-averse Yet many are opting for the
uncertain leap of British withdrawal
from the union over the continuation of
a stable — if uninspired — marriage
Mr Chope has one explanation Older
voters remember life before the EU, he
argues, while younger generations have
developed a Brussels version of
Stock-holm syndrome “If you have served a
long prison sentence, when someone
perspective developed over the course
of a life makes the risks of Brexit appearmore, not less, tolerable
“I have always found that when therehave been calamities in life and you’vebeen forced to change, it has alwaysworked out better,” said John Glazer, 69,the owner of a care home “There could
be problems — but we’ll get over them.”
Many similarly seasoned voters alsobristle at the tactics employed by DavidCameron, prime minister, and his allies,who have issued incessant warningsabout the supposedly dire economicand security consequences of leavingthe EU Just last week, for instance, theTreasury claimed millions of pensionswould be hit by a British exit
At the nearby Bournemouth sity, Darren Lilleker, a political scientist,said older voters tended to be deeplyconcerned about sweeping issues of sov-ereignty and democracy — even thoughmany would never see the long-termconsequences of an EU exit By contrast,his students, who were more pro-EU,tended to take a narrow, utilitarian view
Univer-of the referendum, dwelling on possibleinconveniences such as mobile phoneroaming charges
“Older people feel there is this tidecoming in from outside that’s changingthe country — whether it be immigra-tion or regulation,” Mr Lilleker said
Nostalgia played a big part in the debate,too “They look at Britain and think: ‘it’schanged’, and they tie that to the EU.”
That would seem to describe Karen, a
“nearly 70” pensioner walking nearChristchurch’s priory
Karen, who only gave her first name,accepted that Britain’s withdrawal fromthe EU might result in a decade ofupheaval Still, she could not shake asense that something had been lostthrough Britain’s four-decade experim-ent “I don’t think I want to be Europ-ean,”sheexplains.“I wanttobe English.”
“Only over the past 10 years have Ibegun to say, ‘bloody EU!’ ” she said
“Maybe that’s because I turned 60.”
Editorial Comment page 12 Janan Ganesh page 13 Lex page 16
Grey vote undaunted at prospect of Brexit
In Christchurch the Leave
campaign hopes it will win
support from 80% of electors
Out and about:
a residentmakes herfeelings knownafter a meeting
in Christchurch,Dorset Below,ChristopherChope— Sam Frost
opens the door and says you’re free to
go people are conditioned to be ousabout something different,”hesaid
nerv-Many voters in Christchurch alsocomplain they were misled in 1975 whenthey voted to stay in the Common Mar-ket, believing it to be only an economicproject,not ever-closer politicalunion
“We were sold on the idea that it was atrading arrangement,” said Robin Grey,the 66-year-old local head of theanti-EU UK Independence party Raised
on stories of sacrifice during the secondworld war, Mr Grey cannot understandhow Britons could defend their sover-eignty against German bombers only tocede it later to diplomats in Brussels
Older people voice the common sceptic complaints about EU bureauc-racy, financial waste and uncontrolledimmigration These may be exac-erbated in a town facing the clo-sure of some bus routes and themerger of two hospitals But theyalso suggest motivations thatmay be unique to older voters
Euro-One is that the resilience and
‘Older voters remember life before the EU, while younger generations have
developed a Brussels version of Stockholm syndrome’
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Trang 3Tuesday 31 May 2016 ★ FINANCIAL TIMES 3
NATIONAL
GONZALO VIÑA — OXFORD
The young Rhodes scholar pushing his
bicycle along Broad Street is one of
sev-eral dozen young people chosen every
year for postgraduate study at Oxford
university He has distinctly mixed
feel-ings about the honour
“I worry that 50 years down the road
I’m going to be embarrassed about being
here,” he says
In Oxford, the name of Cecil Rhodes
has in recent months become highly
controversial Last year a group of
stu-dents campaigned to have his statue
removed, condemning him as a racist
imperialist and colonialist who brutally
exploited southern Africans
But Rhodes also established a
prestig-ious scholarship that for more than a
century has enabled international
poli-ticians, diplomats, scientists, thinkers
and activists to study at Oxford, opening
doors for them that have in many cases
led to eminent careers
The young scholar, who did not want
his name to be revealed, said he
strug-gled to come to terms with having such a
gilt-edged opportunity that had its
ori-gins in Rhodes’ colonial exploits
“The Rhodes Trust [which
adminis-ters the scholarships] needs to be doing
much more — it needs to reflect on its
origins,” he said “What it is doing now
feels like it has no obligation towards
southern Africa Rhodes was not ‘a man
of his time’, as he is often described, but
a man who exploited people The
Rhodes Trust — like many other
institu-tions around here — still has to work out
how to handle that.”
The trust, established more than a
century ago for the “education of young
colonists” who exhibited “moral force ofcharacter and of instincts to lead”, todayruns an £184m endowment Alumniinclude Bill Clinton, the former US pres-ident, Susan Rice, US national securityadviser, and three Australian primeministers
The trust acknowledges the problem
of Rhodes’ image “Confronting cal legacies is something that we encour-age,” says Charles Conn, warden ofRhodes House
histori-This week the trust will increase thenumber of scholarships, from 83 to 95,and expand its reach to seek out youngleaders from beyond the Common-wealth and the US, from where most ofthem hail, to countries including Syria,the Palestinian territories, Jordan, Leba-non and Southeast Asia An award paysall educational expenses and livingcosts
Mr Conn, a Canadian and US nationalwho has been running the trust since
2013, says more announcements aredue shortly and adds that moving theinstitution beyond empire is a “signifi-cant part” of the effort
But he denies the impetus for change
is the result of the Rhodes Must Fallcampaign to have the statue of Rhodes
at Oriel College torn down “No one hasprotested about the trust giving money
to talented young people to study withother talented people,” says Mr Conn, aformer Rhodes scholar “No one hasprotested outside Rhodes House Theprotest here is about this physical repre-sentation of Rhodes in a town that is full
of physical representations of peoplewho have different views from us.”
He has also ruled out changing thetrust’s name Such a move would be
“fundamentally dishonest” and bow washing” the truth “The moneycame from the development of diamondand gold mines in southern Africa dur-ing colonial administration Weshouldn’t pretend that isn’t so.”
“rain-Detractors say the move by the trust
to expand its programme beyond theexisting geographies is not confrontingthe past but moving away from it Giventhat about 60 per cent of scholars arewhite, they say, a more meaningfulmeasure would be to divert money awayfrom scholarships awarded to US, Aus-tralian or Canadian students in favour of
those from southern Africa, whereRhodes’ critics say he did greatest harm
A group of scholars known as RedressRhodes, which is working with the trust
to address issues of legacy, says on thetrust’s website it wants “reparative jus-tice” to be a “more central theme” forRhodes scholars Other critics say thetrust takes students from schools wherefew black people attend
While the trust may encourage ling Rhodes’ legacy head on, few oftoday’s scholars are happy to talkopenly, perhaps mindful of the vitriolthat greeted Rhodes scholar NtokozoQwabe when he campaigned to have theOriel statue removed Two other recipi-ents of the award declined to speak, asdid several black Oxford students, whilethe Redress Rhodes group refused tocomment for this article
tack-Mr Conn says the trust is bound byRhodes’ will, which spells out thenumber of scholarships that should go
to American students and puts a cap onthe number for those from Africa It isunable to “willy nilly reallocate scholar-ships”, he says, while adding scholars is abetter answer to the legacy issue thanreallocating the awards
Furthermore, Mr Conn insists the
trust today is a force for good Scholarsare taught about leadership, characterand how to “build a life of service”; theylearn how to speak in public and arecoached in problem-solving skills; andthey are put on internship programmesthat open doors to high-flying careers innumerous professions
Many of the 5,000 living Rhodesscholars are on hand to offer careeradvice to today’s scholars
“I am not trying to suggest a calculusthat by our good works we expunge thefounder’s historical sin,” says Mr Conn
“Everyone of us who has been thebeneficiary of the scholarship carrieswith us that knowledge of where themoney came from, and we all have tocome to terms with what it means to be aRhodes scholar and what duty thatimposes on us to do good in the world.”The young Rhodes scholar who didnot wish to be identified is not con-vinced “The trust should be taking aharsh look at itself; its administratorsare mostly from white western coun-tries,” he says “The scholarship was set
up for white men to spread theempire [Rhodes] put in place insti-tutions that led to apartheid If that isnot bad, then what is good?”
Rhodes Trust
tries to reach out
beyond empire
Oxford officials deny move is linked to
students’ anti-imperialist campaign
SARAH NEVILLE — PUBLIC POLICY EDITOR
A government proposal that employers
should find out whether prospective
re-cruits attended a private school has so
angered Lord Waldegrave, a former
Conservative cabinet minister and now
provost of Eton College, that he has
threatened to relinquish his party’s
whip
The idea, put forward by Matt Hancock,
the Cabinet Office minister and a close
ally of George Osborne, the chancellor,
chimes with David Cameron’s aim of
improving the life chances of those from
disadvantagedfamilybackgrounds
“Name or type of school attended” is
just one of the questions that employees
would be expected to be asked under
the proposals, which are likely to be
adopted within Whitehall within a year,
and potentially by businesses and other
public sector employers thereafter
Other information that might be
sought is the postcode in which
appli-cants lived while attending secondary
school, and their parents’ “professions,
qualifications, and income or wealth”,
according to the CabinetOffice
What’s the idea behind
the proposals?
They are part of efforts to make
work-places more socially diverse Mr
Hanc-ock argues that unlike other diversity
measures, “there is no agreed way of
measuring socio-economic backgroundbetween employersacrosstheUK”
He admits he is seeking to tackle “thelast workplace taboo” and that Britons
do not always like to discuss “our ents’ background, particularly at work”
par-But he says: “You can’t manage whatyou can’t measure.” He wants recruiters
to spot potential rather than “polish”
Why doesthepeer feelso strongly?
The peer also attended Eton, alma mater
to generations of prime ministers terday he was reported by the Daily Tel-egraph as saying he would relinquishthe party whip, and would no longer bebound to back party policy in the Lords,
Yes-“if I believed that the government wasactively seeking to damage the charita-ble school of which I am a trustee”
Lord Waldegrave clearly believes themove is a way of imposing quotas onemployers “It [is] quite wrong to pun-ish children for decisions taken by theirparents, and to run the risk of choosingcrucial public service jobs not on thebasis of merit but of social engineering
The ablest candidates come from allpossible backgrounds.”
Isrecruitmentso skewedtowards private school-educated recruits?
lity and Child Poverty Commissionwould say so In a report last year, thecross-party body found an inbuilt bias among recruiters at top law and accoun-tancyfirmsforthemiddleclass
Thegovernment-appointedSocialMobi-Its chairman, Alan Milburn, plained that applicants were, in effect,expected to pass a “poshness test” Thesame body has also found that most ofthe UK’s top judges, military officers andsenior Whitehall officials were privatelyeducated even though only 7 per cent ofthepopulation wenttoprivateschool
com-Will MrHancock’splanwork?
Conor Ryan, director of research at theSutton Trust, a social mobility charity,believes it will Asking potential employ-ees about their educational background
“will help employers make fair ments about their potential Thereare real economic and social benefits to
judg-be gained from recruiting from a widertalent pool”,hesaidyesterday
The Cabinet Office points to tancy McKinsey, which said that “inher-ent diversity” and “acquired diversity”
consul-benefits the bottom line Companieswith such “two-dimensional diversity”
had45percentmoremarketshare
Private schools
Anger at Eton over social mobility plan
VANESSA HOULDER
Long-term immigration into the UK by
people wishing to study in Britain has
fallen to its lowest level since 2007, in a
sign that tighter restrictions on
over-seas students are having an effect
The latest migration figures published
by the Office for National Statistics
showed a 6 per cent fall in student visa
applications from people outside the EU
to 222,609 in the year to March 2016
The fall largely stemmed from a drop in
applications for further education
insti-tutions outside the university sector
Applications to study at further
edu-cation and other institutions fell 16 per
cent to 20,770 in the year to March 2016
There was also a 3 per cent decline to
13,591 in visa applications to study at
independent schools Part of the fallreflects rules introduced in 2011 to stopabuses of student visas that made itharder for education providers to spon-sor international students
Critics of the policy say tion rhetoric has also deterred genuinestudents from coming to Britain Somewill also have been put off by changesmade in 2012 that meant they could nolonger stay in the UK and work for twoyears after graduation
anti-immigra-The Home Office said most of the fall
in the further education sector’s sored visa applications since the peak inmid-2011 was accounted for by licencesthat had been revoked
spon-University-sponsored study visaapplications fell 1 per cent to 164,124,after a 7 per cent increase for the Russell
Group of elite universities was morethan offset by a similar decrease forother universities
The figures are likely to concern versities that are seeing a stagnation ordecline in foreign student numbers —despite a growing global market — asthey rely heavily on overseas students toboost their incomes
uni-James Pitman, managing director ofthe higher education division of StudyGroup, which prepares internationalstudents for university, said the dropwas significant given that the number ofnon-EU students seeking an educationabroad was increasing by at least 6 percent every year
The largest absolute decreases in thenumber of study visas granted were toIraqi, Nigerian and Libyan nationals
Higher education
Student visa applications fall after rule change
‘It [is] quite wrong to run the risk of choosing crucial public service jobs on the basis of social engineering’
Cyclists ridepast the OrielCollege statue ofCecil Rhodes,the formermagnate andpolitician,below Right:
an Oxfordprotest in March
Carl Court/Getty Images
Trang 4REBECCA COLLARD — BEIRUT
Iraqi forces pushed into Isis-held
Fallu-jah yesterday, hoping to claim their
big-gest victory to date against the
mili-tants, but also facing their sternest test
In the past week, the Iraqi army —
along with special forces and Shia
mili-tias — has been encircling the city,
pre-paring to attack a stronghold that
repre-sented Isis’s first big conquest in Iraq in
January 2014
There are believed to be fewer than
1,000 Isis fighters still in the city while
thousands of Iraqi soldiers and allied
militiamen are assembled outside
Retaking Fallujah would provide a
psychological boost for Iraq’s unproved
military
It would also push the militants
fur-ther back from Baghdad, which lies only
50km to the east, and prepare the stage
for a bigger showdown in the northerncity of Mosul
“Retaking Fallujah will mean that Isis
no longer has a position close to the[capital],” says Ahmed Ali, a fellow withthe Institute of Regional and Interna-tional Studies at the American Univer-sity of Iraq Sulaimani
Still, the battle will not be easy: thereare tens of thousands of civilians stillinside, Isis is in an advantageous posi-tion, and Iraqi national forces aredepending on the aid of sectarian mili-tias reviled by many of the locals
Iraqi forces laboured for eight months
to recapture Ramadi, a nearby westerncity, late last year in a campaign thatrevealed the government forces’ weak-ness and ultimately left the city in ruins
“[Fallujah] is smaller and very lated,” says Mr Ali, predicting the taskwould be more complicated
popu-Once a city of 300,000, mostly Sunniresidents, the city in Anbar provincewas a focal point of the resistance thatfollowed the US-led invasion in 2003
The population is still estimated at
around 50,000, making air support ficult without causing a high number ofcivilian casualties
dif-Isis has controlled Fallujah for morethan two years, allowing militants toinstall improvised explosive devicesand traps for advancing forces On top ofthat, says Christopher Harmer, a senioranalyst with the Institute for the Study
of War, who served several stints withthe US army in Iraq, Isis’s unconven-
tional tactics will make the battle cult “In conventional war you can do certain things to force people to surren-der,” said Mr Harmer “But as long as[Isis] have bullets they will fight As long
diffi-as they have suicide vests they willfight.”
Washington has set up a $1.2bn gramme to train and re-equip the Iraqimilitary since it crumbled in the face ofIsis’s onslaught The army is still reliant
pro-on Shia paramilitary organisatipro-ons tomove forward
“The Iraqi security forces are tionally dependent on the Shia militias,”
opera-said Mr Harmer
That has raised questions about thecentral government’s legitimacy andauthority It also means local Sunniinside Fallujah and the surrounding vil-lages will be wary of the advancingforces, even if they would otherwise behappy to see Isis go
The paramilitary forces, known as theHashd al-Shaabi, or Popular Mobilisa-tion units — while effective — have beenaccused of abductions, reprisal killings
and damaging civilian property
“There are fears that what happened
in Tikrit will be repeated [in Fallujah],”
says Jaber al-Jaberi, a Sunni member ofparliament in Anbar province, referring
to another Sunni city liberated last year
by the government “The mobilisationforces burnt mosques in Tikrit.”
Isis is coming under pressure on otherfronts as Kurdish and Arab forceslaunch offensives around the militants’
de facto capital Raqqa, in northernSyria, and Mosul, the largest city undertheir control
Both Mr Jaberi and Mr Harmerbelieve that Isis will be dislodged fromFallujah, probably retreating to defendMosul, which has become even moreimportant for the organisation
The Iraqi government has been sayingfor more than year that Mosul operation
is imminent but there has been littleprogress That fight will be even moredifficult A dense urban city, as many as1m people remain there and the opera-tion has been stalled by infighting
Friends for Isis page 13
NAJMEH BOZORGMEHR — TEHRAN
SIMEON KERR — DUBAI
Iran’s boycott of the annual Hajj
pil-grimage in Saudi Arabia illustrates the
breakdown in relations between the
Gulf superpowers as they vie for
regional influence
Tehran said its citizens would not
travel to Mecca this year, accusing Saudi
Arabia of failing to guarantee their
safety and placing politically-motivated
restrictions on Iranian pilgrims
All able-bodied Muslims are obliged
to perform Hajj — a spiritual pilgrimage
central to the Islamic faith — at least
once in their lives if they can financially
afford it Yet the wrangling between Iran
and Saudi Arabia shows how one of
Islam’s holiest rituals has become
entangled in regional politics
The Hajj became a flashpoint in the
Iran-Saudi Arabis dispute last year
when hundreds of Iranians died in a
stampede near Mecca, prompting bitter
accusations from Tehran
Riyadh subsequently broke
diplo-matic ties with Iran in January after its
Tehran embassy was stormed following
the Saudi execution of a Shia cleric As
the two sides have clashed throughout
the region, Saudi Arabia has accused
Iran of unacceptable interference in
Syria, Yemen and Iraq
On Sunday, Iran’s Hajj Association
said Riyadh had linked the pilgrimage
dispute to the political situation in the
region and had changed the text of its
agreement “Considering the
continua-tion of Saudi Arabia’s obstructive
moves, Iranian pilgrims will be deprived
of Hajj this year and its responsibility
falls with the Saudi government,” it said
Saudi Arabia in turn blamed Tehran’s
intransigence for the failure to reach a
bilateral Hajj agreement The country’s
Hajj ministry said that it had offered
many solutions to Iran’s demands
during two days of talks that ended onFriday A Saudi official said: “Iran hasconverted Hajj into a political demon-stration in an attempt to weaken SaudiArabia’s leadership role in the Islamicworld.”
Riyadh has been angered by theinvolvement of Iran’s military in thisweek’s attempt by the Iraqi army andShia paramilitary to oust Sunni militantgroup Isis from the city of Fallujah out-side Baghdad, which it branded “unac-ceptable” Iran maintains that it is fight-ing terrorism and accuses Riyadh offomenting the Sunni extremism thattargets Shia Muslims
This year’s Hajj is expected to fall inmid-September
Hossein Sheikholeslam, a senioradviser to Iran’s parliament, said yester-
day: “Our problems with Saudi Arabiaare not limited to Hajj We have numer-ous problems — from Syria and Yemen
to oil prices and security of the PersianGulf Saudis are playing a political gameand use Hajj, which should be a purelyreligious matter, as a political leverage.”
Iran last boycotted the Hajj between
1988 and 1990 after 400 Shia pilgrimsdied in clashes with Saudi securityforces in 1987 That deadly confronta-tion came as Saudi support for Baghdad
in the Iraq-Iran war of 1980-1988 cided with increasingly politicised Shiademonstrations during the Hajj afterthe Islamic revolution of 1979
coin-Saeed Ohadi, head of Iran’s HajjOrganisation, said yesterday Saudi Ara-bia had added 11 new clauses to the pre-vious pilgrimage accord between the
countries These included issuance ofvisas in a third country, limitations onIranian aircraft and a ban on displayingIranian flags Saudi Arabia had insisted
on designing the identification band for Iranian pilgrims and denyingIranians permits to gather publicly
wrist-“Saudi Arabia displayed seriousdetermination [during negotiations]
not to accept Iranian pilgrims andbought time [during negotiations] toprevent Hajj pilgrimage for Iranians,”
FARHAN BOKHARI — ISLAMABAD
Pakistan prime minister Nawaz Sharif
is due to undergo open heart surgery in
a London hospital today, at a time ofgrowing demands for his resignationover the alleged offshore wealth accu-mulated by three of his four children
Mr Sharif has been struggling to quellrising public anger against him since lastmonth, when the Panama Papersrevealed his children had significantoverseas assets, including apartmentsnear London’s Hyde Park His publicexplanations that his family had merelyprofited from the sale of its steel busi-ness in Saudi Arabia have failed to con-vince the public or his political rivals
Mr Sharif’s heart surgery, three daysbefore the presentation of Pakistan’sannual budget, risks further undermin-ing the leader, with rivals questioninghis arrangements for ruling the countryduring his surgery and recuperation.Government officials said Ishaq Dar,finance minister and a close ally of thepremier, would oversee governmentalaffairs in Mr Sharif’s absence But MrDar will have no formal authority tomake decisions beyond the powersgranted to him as finance minister
“Pakistan’s constitution has no sions for an acting prime minister tostep in if the prime minister suffers from
provi-a medicprovi-al condition,” sprovi-aid Hprovi-asprovi-an Askprovi-ariRizvi, a commentator on security andpolitical affairs
Mr Sharif’s surgery has fuelled
anxi-ety in his own party over the sensitivequestion of his political successor Forthree decades Mr Sharif has built hispolitical base from the populous Punjabprovince where Shehbaz Sharif, hisyounger brother, is chief minister Asthe two brothers have aged, questionshave emerged over younger members oftheir families remaining as united as thetwo elders “The question of successioncomes into play whenever you havepower going from one generation toanother,” said one western diplomat
“Rivalries can very well emergebetween Nawaz Sharif’s children andShehbaz Sharif’s children.”
The government gave no details of theplanned operation but Mr Sharif’sdaughter, Maryam, tweeted on Fridaythat the procedure would fix a “perfora-tion in the heart” left by previous heartsurgery in 2011
A Pakistani diplomat based in don said his understanding was that MrSharif could receive a “triple bypassinvolving three cardiac arteries”
Lon-In an apparent effort to demonstrate
he remains in control, Mr Sharif was due
to preside over a meeting of his cabinetvia Skype from London yesterday toconsider and approve the budget, whichwill be presented to parliament on Fri-day In the past the budget was approvedthe day before it was announced.Arif Nizami, a Lahore-based newspa-per editor, said even after Mr Sharifrecovered, questions about his politicalfuture would linger
Offshore allegations
Pakistan PM
to have heart surgery as calls grow for him to resign
Middle East
Iraqi forces push into Isis-held Fallujah
Retaking city would give
psychological boost to
under-pressure military
Hajj boycott underlines Gulf superpowers’ animosity
Iran’s bar on sending pilgrims
to Mecca this year is part of a
broader clash with the Saudis
Pilgrimage:
Muslims atMecca last year
This year Iranhas blockedattendance byits citizens,accusing SaudiArabia of failing
to guaranteetheir safety
Ozkan Bilgin/Anadolu Agency/Getty Images
‘Saudis use Hajj, which should be
a purely religious matter, as
a political leverage’
Hossein Sheikholeslam, senior Iran adviser
Nawaz Sharif has been struggling to quell rising anger since last month’s claims in the Panama Papers
ROBIN HARDING — TOKYO
Premier Shinzo Abe intends to put offraising Japan’s consumption tax by twoand a half years until October 2019with a decision set to be announced asearly as tomorrow
A consumption tax rise from 8 per cent
to 10 per cent was scheduled for Aprilnext year Delaying it prevents a big fis-cal squeeze on a stuttering economy,and comes ahead of upper house elec-tions scheduled for July, although MrAbe is no longer expected to call lowerhouse elections on the same day
As well as putting off the consumptiontax rise, Mr Abe is preparing a fiscalstimulus that could amount to
¥5tn-¥6tn ($45bn-$54bn) Here are thelikely consequences for the main actors
in Japanese business and politics
Prime Minister Shinzo Abe
Postponing the sales tax rise is thing of a gamble for Mr Abe The politi-cal upside is simple: voters dislike taxrises The risk is more subtle Oppo-nents are using the delay to argue thathis Abenomics programme has failed
some-That is why Mr Abe was so eager to get
G7 endorsement for fiscal stimulus,using alarming rhetoric about a newLehman Brothers crisis The prime min-ister wants to sell the delay as bowing toglobal necessity
Opinion polls show he has reason forconcern: 38 per cent approve of Abe-nomics but 49 per cent disapprove Yetother factors, such as US presidentBarack Obama’s visit to Hiroshima,have boosted Mr Abe’s overall approvalrating to 56 per cent so he can afford totake a chance
Ministry of Finance
Postponing the sales tax increase lines how Mr Abe has neutered the Min-istry of Finance Always worried aboutJapan’s public debt — almost 240 percent of gross domestic product — theministry has fought a rearguard action
under-in favour of the tax rise
According to a senior governmentofficial, however, Mr Abe no longertrusts the ministry or its projections,after it told him a 2014 consumption taxrise would have only a modest and tran-sient effect on the economy Instead, itcaused a recession
Next year’s tax increase was supposed
to raise revenue by ¥5.4tn a year but MrAbe already gave up ¥1tn by exemptingfood That suggests a 30-month delaycould cost about 2 per cent of GDP —immaterial to Japan’s debt, as long as thetax rise goes ahead
Bank of Japan
As a former Ministry of Finance
bureau-crat, Bank of Japan governor HaruhikoKuroda likes budget discipline but thefiscal boost should make it easier for theBoJ to hit its 2 per cent inflation target
The central bank was forecastinggrowth of 1.2 per cent for the year toMarch 2017 and then 0.1 per cent for theyear to March 2018
It is likely to revise down the first andrevise up the second
Most analysts think a consumptiontax delay is not enough to prevent fur-
ther BoJ easing in July, but if the ment adds a large spending package aswell, it will reduce the pressure for mon-etary stimulus
govern-Exporters and big business
The policy mix in 2014 — suppressingdemand at home with consumption taxrises, while driving down the yen witheasy monetary policy — was ideal forJapan’s exporters
Fiscal stimulus is less helpful to theexport sector and big business in Japanhas long felt a sense of crisis about thepublic debt
Retailers and consumers
After the sales tax move in 2014, sumption plunged at an annualised rate
con-of 18.2 per cent in the second quarter.Consumers, especially poorer consum-ers who spend every yen, are the bigwinners from a delay The sector-by-sector impact is a little more compli-cated Supermarkets have less to gainfrom a delay because food was alreadyexempted The likely gainers are otherdomestic sectors: retail, restaurants,construction and consumer goods
Additional reporting by Kana Inagaki
Japan
Abenomics opponents pounce on expected sales tax delay
Postponing the sales tax increase underlines how
Mr Abe has neutered the Ministry of Finance
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Trang 5Tuesday 31 May 2016 ★ FINANCIAL TIMES 5
Trang 6JAMIE SMYTH — HUNTER VALLEY,
AUSTRALIA
A wedge-tailed eagle soars above a
pic-turesque hillside blanketed with shrubs
and flowers, looking for prey
“The animals are coming back,” says
Damien Ryba, environment and
com-munity officer for mining group
Glen-core “This is a sign that the land is
returning to a natural state.”
Five years ago outsized trucks
crowded a track thick with coal dust
near the company’s Mangoola mine,
one of the biggest open-pit
develop-ments in Australia’s Hunter Valley It is
now part of a pilot project by the
Swiss-based miner to rehabilitate former
min-ing sites as it attempts to rebuild
sup-port in the community
Alarmed by growing concerns about
new mines, some companies are placing
more emphasis on rehabilitating
exist-ing ones, particularly in the developed
world These initiatives follow centuries
of poor practice that have caused
envi-ronmental disasters, threatened health
and left taxpayers with bigclean-up bills
There are about 50,000 abandoned
mines in Australia The bill for cleaning
them up would stretch to tens of billions
of dollars, well beyond the level of
finan-cial assurances that miners provide to
state governments, analysts say
“In the past many smaller companies
just disappeared and their mines were
abandoned with little or no
rehabilita-tion,” says Peter Erskine, research
fel-low at the University of Queensland
“But there has been a societal shift in
expectations towards mine
rehabilita-tion, with more communities and
gov-ernments pushing for miners to
prop-erly close operations and leave an
enduring positive legacy,” he says
The Hunter Valley has been a coal
region since European colonisation, and
produces more than 100m tonnes per
year But the industry has been stung by
a decision by planning authorities to
refuse permission to Anglo American to
expand a nearby mine Farmers have
also won the right to refuse permission
for exploration drilling on their land
“Successful rehabilitation of mined
lands costs millions of dollars over the
life of a mine,” says Tony Israel,
Glen-core operations manager at Mangoola
“But it enables us to maintain our
social licence to operate and
demon-strate that our operations can and dosuccessfully coexist with local commu-nities and other industries.”
Mangoola’s licence extends to 2026and any extension must be approved bylocal authorities
The pilot is taking place while miningcontinues This enables Glencore to inte-grate mining and rehabilitation, usingtruck and digger fleets to shape a land-form to match the surrounding country-side Natural drainage lines are being re-establishedtoprevent soil erosion
The project area stretches for 1,300hectares and Glencore uses localendemic seed collected to replant therehabilitated land
It has installed 900 bird boxes and hasset up several orchid nurseries toreplant rare species
“We recently identified a masked owl
— a threatened species in New SouthWales,” says Mr Ryba “It’s a great resultwe’reshowcasingto thecommunity.”
Glencore has also begun ing trials on rehabilitated pastureland atits nearby Liddell mine, successfullyselling the first batch of beef producedfor the export market It is producingwine and honey on its land in partner-
cattle-graz-ship with local farmers as it seeks tooverturn perceptions of coal mining as adirty, polluting industry
But anti-coal campaigners warn thatsuch showcase projects are designed tocapture positive publicity withoutaddressing the tens of billions of dollars
of costs associated with rehabilitation ofall abandoned mines
“While individual rehabilitationprojects are a good start, it is important
to note that these represent a drop in theocean of what’s required,” says Nikola Casule of Greenpeace, who adds it isimpossible to return former coal minesfully to their natural state after mining
Others say the fact big miners are stillonly engaging in pilot rehabilitationprojects is disgraceful given that somehave been excavating sites for decades
or even centuries
“There are ways to game the system
For example, big resource companiescan sell on their mines and rehabilita-tion obligations to small players,” saysTim Buckley, director at the Institute ofEnergy Economics and Financial Analy-sis “This is why it is essential that regu-lators push miners to progressivelyrehabilitate sites as they mine them.”
Mine clean-ups aim to reset industry’s sullied image
Initiatives by some companies
follow centuries of poor
environmental practice
Land scar: anopen-pit mine
in HunterValley Theregion producesmore than 100mtonnes of coalper year
Stefan Jannides/
Redbrickstock.com/Alamy
3A century of lignite mining left the
area around German town Pritzen — a
90-minute drive south-east of Berlin —scarred by open pits, dust and waterpollution German authorities embarked
on a plan to create Europe’s largestartificial lake district They turned minesinto lakes, replanted forests and createdmarinas and beaches to attract tourists
3The end of tin mining near English
town Pool in 1998 after four centuries
created an economic vacuum and anenvironmental challenge With NationalLottery support, the Heartlands projectwas born, transforming the formerderelict mine at Robinson’s Shaft into a19-acre cultural centre featuringhistorical exhibitions, art galleries,climb-on sculptures, cafés and shops
the largest salt mines in the world untilmining ceased there in the 1930s Over
20 years it has been transformed into anunderground theme park with museum,swimming pool, spa, rowing boat lake, abig wheel, bowling alley and mini golfcourse
Rising from the ashes
Changed landscapes for tourism
SAM JONES — BRUSSELS
Defence spending by Europe’s Nato
states is set to rise for the first time in
nearly a decade, figures show, as fears
over Russian aggression and the
migrant crisis in the Mediterranean
stoke anxiety over security across the
continent
But Jens Stoltenberg, Nato
secretary-general, warned in an interview with the
Financial Times that a UK vote to leave
the EU could throw the turnround into
jeopardy
“The forecast for 2016, based on
fig-ures from allied nations, indicates that
2016 will be the first year with increased
defence spending among European
allies for the first time in many, many
years,” Mr Stoltenberg said “We arefaced with uncertainty, we are facedwith more threats, more security chal-lenges than in a generation, and weneed unity, we need strength, we needstability
“The UK is the largest European vider of defence capabilities in Nato, [ithas] the biggest defence spending, it has
invest-ments second only to the UnitedStates in the whole alliance a strong
UK in a strong Europe is important forunity and stability,” Mr Stoltenbergsaid
The EU was becoming increasinglyimportant in almost all the challengesNato had to deal with, Mr Stoltenbergadded The UK was “key” in developingthe relationship between the two
“Nato and the European Union areworking in tandem For the UK[remaining] is a good position to be in,
to be able to sit at both the Nato table
and the EU table, since both tions are so important to how we areresponding to the instability we arefaced with, both to the east and to thesouth.”
organisa-Last year, Nato’s European alliesspent $253bn on defence compared with
a US spend of $618bn According to the
2 per cent guideline, European tries should be spending an additional
coun-$100bn annually on their militaries
The current spend is equivalent toaround 1.43 per cent of gross domesticproduct
The aggregate figure has been steadilysliding since 2008 That year, Europeancountries on average spent 1.7 per cent
following the end of the cold war, onlydipping below the threshold after themillennium
Nato did not provide exact figures for
2016 because it said the data were sional and had been shared with the alli-ance on a confidential basis
provi-Several key Nato states have publiclydeclared significant increases to their
budgets, however The Baltic states,which border Russia, have made thebiggest changes
Latvia’s budget will rise nearly 60 percent this year Lithuania will see a 35 percent increase and Estonia 9 per cent
Poland, eastern europe’s main militarypower, is also raising defence expendi-ture by 9 per cent
The UK’s military budget is also ing The government has pledged toincrease spending in order to maintainthe alliance target of 2 per cent of GDP
ris-Falling military budgets and a tured approach to defence procurementand strategy in Europe have been asource of concern for the alliance andthe US in particular The issue has evenbecome an topic of the US presidentialrace, after Republican presumptivenominee Donald Trump declared thealliance “expensive” and “obsolete” andaccused Europe of freeloading on USmilitary largesse
frac-At Nato’s 2014 summit in Newport,south Wales, amid alarm over Russia’sinvasion of Crimea and Moscow’s grow-ing military actions, allies pledged tofreeze all further cuts in defence budg-ets and work towards hitting Natobenchmarks for spending over the next
“We still have a long way to go but thepicture’s better than it was before andI’m inspired by the fact that one yearafter the commitment in Wales we havebeen able to stop the cuts in Europe.Now it looks like, into the second year,
we will have the first real increase intotal European defence spending,” said
Mr Stoltenberg
Military alliance
Nato’s European states to lift defence spending
Secretary-general warns a
vote for Brexit would put
stability in Europe at risk
On exercise: British troops take part
in Nato training in Poland this year
IAN MOUNT — BARCELONA
Spain is enjoying a surge in tourism as
fears over terrorism drive wary
travel-lers away from destinations in Turkey
and north Africa, and back to former
favourites in southern Europe
The number of foreign tourist arrivals in
Spain in April rose 11.3 per cent to 6.1m
compared with the same month in 2015,
according to data published yesterday
by INE, Spain’s national statistics
agency Total tourist numbers over the
first four months of the year rose 13 per
cent to 18.1m
Visitors from the UK were the
pri-mary driver behind the increase, with
some 4m visiting in the first four
months of this year, a 19.4 per cent
increase compared with the same
period in 2015
The shift to Spain comes as terroristattacks in Tunisia, Turkey and Egypt —and government warnings for citizens toavoid travel to some destinations — haveled many seeking an inexpensive beachholiday to look elsewhere
“Booking behaviour really changedafter those attacks Bookings are mov-ing from Turkey, Egypt and Tunisia toSpain, and also to Bulgaria and Greece,”
said Dörte Nordbeck, head of travel andlogistics, Germany, at GfK, which trackstravel bookings across Europe
The attack in June last year in theTunisian town of Sousse, in which a gun-man killed 38 tourists, brought thecountry’s tourism industry to a halt
Meanwhile Turkey, which has been hit
by a spate of bombings and cooling tions with Russia — a main source oftourism to the country — suffered its
rela-worst drop in visitor numbers since
1999, with arrivals in April falling 28 percent to 1.75m
Mainland Spain and the Balearic andCanary Islands have been among themain beneficiaries Reporting resultsfor the six months ending March 31recently, Thomas Cook Group, the UK-based travel agent, said its summer
2016 bookings to Spain’s BalearicIslands were up 14 per cent comparedwith the previous year, while those tothe Canaries were up 23 per cent Over-all summer bookings were down 5 per
cent, but up 6 per cent excluding key, the company said
Tur-“Thomas Cook is trading well to nations other than Turkey, with partic-ularly strong bookings to Spain and theUS,” Peter Fankhauser, Thomas Cookchief executive, said at the time “How-ever demand for Turkey — our second-largest market last year — remains sig-nificantly below last year’s levels.”
desti-Tui Group, the world’s largest tourismoperator, has also warned of substantialdrops in demand for Turkey and northAfrica In November, Tui suspendedtrips to the popular Egyptian resort ofSharm el-Sheikh after a bomb broughtdown a Russian airliner over the Sinaidesert, and 33 of the company’s custom-ers were killed in the Sousse attack
But Ramón Estalella, eral of Cehat, Spain’s hoteliers union,
secretary-gen-said security fears over terrorism werenot the only reason for the wave of UKtourists visiting Spain The increase intourism to the Canary Islands — where38.3 per cent of the 4.5m visitors in thefirst four months of 2016 came from the
UK — could be explained largely by amovement of sunseekers away fromEgypt, he said
However, UK visitors also made up10.7 per cent of the 4.2m foreign touristsvisiting Catalonia — not primarily abeach destination — in the same period
Accessible prices, good marketing,and word of mouth were behind much
of the increase, he said: “There are a bignumber of British tourists who go toCatalonia to visit Barcelona and to ski,”
he said “The tourists are not just going
to islands but also to cities — and thathas nothing to do with Tunisia.”
European travel
Spain tourism leaps in April as sunseekers shun global terrorism hotspots
13% Rise in Spain’s tourist numbers over the first four months of 2016
28% April’s drop in foreign arrivals
to Turkey, falling
to 1.75m visitors
KERIN HOPE — ATHENS
Greece’s leftwing government is underfire for slipping a measure that allowsMPs to hold stakes in offshore compa-nies into an economic reform package,reversing a ban intended to discouragetax avoidance by the political elite.The policy was rushed through parlia-ment earlier this month without beingdebated, as part of a 7,500-page eco-nomic reform package agreed withGreece’s international creditors — the
EU and International Monetary Fund —and without being picked up by opposi-tion lawmakers
Its existence was first revealed onSunday by Proto Thema, an Athensnewspaper, a week after the reformswere approved by lawmakers from thegoverning Syriza party and its coalitionpartner, the rightwing IndependentGreeks
Opposition lawmakers said the cific clause lifting the ban was insertedinto a section on disclosure withoutbeing flagged up by the justice ministry,which would have been normal parlia-mentary practice “We’ve submitted aparliamentary question on the issuesigned by all our MPs and we expectsome explanations,” said Kyriakos Mit-sotakis, leader of the centre-right NewDemocracy, the main opposition party.Under the new legislation cabinetministers and MPs can own shares incompanies across dozens of offshorejurisdictions provided these are deemed
spe-to co-operate with Greek tax and money laundering authorities
anti-The move appears deeply at odds withthe Syriza government’s avowed policy
to curb tax evasion by Greeks holdingaccounts abroad Three separate listscovering such accounts in Switzerland,Luxembourg and Panama are beinginvestigated by the finance ministry’stax police
The previous law enforced a blanketban on high-ranking officials and closerelatives owning stakes in companiesbased outside Greece Two cabinet min-isters have had to resign in the past fiveyears after admitting they owned off-shore companies based in Cyprus.Giorgos Vasileiades, Greece’s top anti-corruption official, defended the meas-ure yesterday as “bringing more trans-parency” to the vexed issue of politi-cians’ financial dealings “We’re open tosuggestions, including from politicalparties, to make the system more rigor-ous,” Mr Vasileiadis said
A Greek tax lawyer who declined to beidentified said the new legislation would
“effectively facilitate tax avoidance”because many of the jurisdictions thatformally co-operated with Greece werealso geared to protect beneficial owners
of offshore companies
“There are delays and obstacles evenwhen dealing with countries like Cyprusand Ireland which are EU memberstates,” the lawyer said
Greek cabinet ministers, MPs, seniorministry officials and executives ofstate-controlled companies are alreadyrequired to make a detailed annual dec-laration of their own and close relatives’assets, including funds held in bankaccounts abroad
Some officials suspected of makinginaccurate declarations are investigated
by state auditors but just a few caseshave gone to court Only one Syriza MP
is under investigation George akis, economy minister, is accused offailing to declare two bank accounts andpart-ownership of almost 40 propertiesaround Greece He denies wrongdoing
Stath-Greece
Syriza’s move over offshore stakes for MPs sparks anger
Trang 7Tuesday 31 May 2016 ★ FINANCIAL TIMES 7
Trang 8JOHN AGLIONBY
EAST AFRICA CORRESPONDENT
Former Chad president Hissène Habré
has been convicted of crimes against
humanity, the first time an ex-leader
has been tried in an African
Union-backed prosecution in another African
country
The court in Dakar, Senegal, also
con-victed Habré of rape, sexual slavery and
ordering killings while in power
The former dictator, who seized
power in the central African nation in
1982 and ruled it repressively until
being toppled in 1990, was sentenced to
life imprisonment
Habré, who was lauded in 1987 by
then US president Ronald Reagan at the
White House for expelling Libyan
troops from Chad, was responsible for
the deaths of about 40,000 people
dur-ing his eight-year rule, accorddur-ing to a
1992 Chadian truth commission report
Gaetan Mootoo, Amnesty
Interna-tional’s west Africa researcher, said the
verdict “demonstrates that when there
is enough political will, states can work
together effectively to end impunity in
even the most entrenched situations”
He added: “This decision should also
provide impetus to the African Union or
individual African states to replicatesuch efforts to deliver justice to victims
in other countries in the continent.”
Analysts are sceptical, however, thatthe trial will serve as a precedent forsimilar prosecutions because of theunique circumstances surrounding thecase, which was brought by 4,000 vic-tims of his oppression Many of the vic-tims faced repeated threats and intimi-dation to drop their campaign againstHabré Dozens were in court to hear theverdict yesterday
The AU intervened only in 2006 after
a Belgian judge issued a warrant forHabré’s arrest The AU said Senegal,
where Habré had been granted refugeafter fleeing there in 1990, should tryhim “on behalf of Africa”
After six years of further delays, theInternational Court of Justice in TheHague ordered Senegal in 2012 to eithertry Habré or extradite him to Belgium
Senegal’s stance on Habré only changedwith the election of Macky Sall as presi-dent that year The AU and Dakar estab-lished the Extraordinary African Cham-bers the following year
The trial lasted 10 months Habré,who dismissed the trial as politicallymotivated, has two weeks to appeal
“This court was called extraordinary
for good reason, because the case was sounique,” said a senior AU official
“The issue of justice in Africa for cans is so complex I doubt it will berepeated soon But, as the circum-stances changed in Senegal, they mightchange elsewhere, too.”
Afri-AU support for Habré’s prosecutioncontrasts sharply with its opposition tothe International Criminal Court in TheHague, which has sought to prosecutemany current and former African lead-ers for crimes against humanity
Many African states argue the ICC isbiased against Africans and it recentlysuffered the embarrassment of effec-tively having to drop charges againstWilliam Ruto, Kenya’s deputy presi-dent, partly because of allegations ofwitness interference
The Extraordinary African Chambers
is also mandated to hold reparationshearings and establish a trust fund forall victims, not just those who partici-pated in the case
Reed Brody, a Human Rights Watchlawyer who for years supported the vic-tims, summed up many people’s viewswhen he wrote after the verdict:
“Today will be carved into history asthe day that a band of unrelenting survi-vors brought their despot to justice.”
Senegal prosecution
Chad’s ex-dictator given life term for crimes against humanity
Defiant: Hissène Habré gestures incourt during proceedings yesterday
Senegal C h a d
1,000km
N’Djamena Dakar
DEMETRI SEVASTOPULO — WASHINGTON
“Pocahontas & Crooked Hillary” sounds
like the name of a Disney movie But the
words are some of the slurs that Donald
Trump has started hurling at the two
most powerful women in the
Demo-cratic party — Elizabeth Warren and
Hillary Clinton — as he gears up for
November’s presidential election
During the Republican race, Mr
Trump often said that his wife urged
him to be presidential, but that he was
forced to mock rivals such as “Lyin’
Ted” Cruz and “Little Marco” Rubio to
close the deal One month after, in
effect, securing the party nomination,
he is increasingly applying the
tech-nique that helped him oust 16
Republi-can opponents ahead of his battle with
Mrs Clinton, who is poised to become
the Democratic nominee, and Mrs
War-ren, the Massachusetts senator
For months, the Clinton campaign
sal-ivated at the idea of Mr Trump as the
Republican nominee But in recent
weeks, some Clinton allies have grown
concerned that she is underestimating
the media-savvy tycoon and struggling
to find his Achilles heel Those concerns
have been exacerbated by polls showing
the two rivals running neck and neck
Speaking at the Rolling Thunder
event in Washington on Sunday, Mr
Trump told thousands of veterans
rid-ing Harley-Davidsons that “we can’t
have Hillary Clinton be our president”
Days before, he tweeted that “Crooked
Hillary” was a “disaster” following a
critical government report about her
use of a personal email account while
secretary of state
Mr Trump is trying to tap into the
feeling among roughly two-thirds ofvoters that Mrs Clinton is not honest,but he has gone much further by resur-recting attacks from the years that Hil-lary and Bill Clinton were in the WhiteHouse that range from conspiraciesabout the suicide of a business partner
to unproved claims that Mr Clintonraped a woman
“When you have two candidates sessing the highest unfavourable ratings
pos-of any major candidates nominated bytheir respective parties, you can expectthat this will be a race to see who hits thebottom last,” said Kevin Madden,spokesman for Mitt Romney in the 2012campaign “Both candidates will believe
it is in their interest to make sure thattheir opponent maintains a poisonedprofile in the eyes of voters.”
Mr Trump has accused Mrs Clinton ofbeing an “enabler” for her husband’sextramarital dalliances in a bid to blunther criticism of his record with women
She recently said she would not fall intothe trap of responding, but his attackshave posed a conundrum Her attempts
to criticise him over policy have beendrowned out by his controversial state-ments that help him dominate televi-sion media
The Clinton team has tried to tarnish
Mr Trump by highlighting his versial comments about women, andcriticising his failure to release his taxreturns Last week she attacked him forsaying years ago that he would gain from
contro-a housing crcontro-ash He deflected the contro-attcontro-ackwith the same Teflon coating thatshielded him in the primaries
One of the few Democrats who hasbeen an effective attack dog is Mrs War-ren, a former Harvard professor whom
he has called “Pocahontas” in response
to her claim that she is part American After Mr Trump recentlytweeted that “I find it offensive thatGoofy Elizabeth Warren, sometimesreferred to as Pocahontas, pretended to
native-be Native American to get in Harvard”,she fired back: “Get your facts straight,
@realDonaldTrump I didn’t even go toHarvard.”
Norm Ornstein, a politics expert atthe American Enterprise Institute, said:
“Clinton is going after Trump more onissues and questions of his qualifica-tions, and letting surrogates, especiallyElizabeth Warren, do more heavy liftingand aggressive attacks on his personaand moral and business failings.”
Some Clinton allies say she needs tostop engaging Mr Trump on detail andstart assailing his character with morevenom But Mr Ornstein believes MrsClinton will continue leaving the mostabrasive attacks to others
But while the Clinton team debatesthe best way to confront Mr Trump, it isclear Mrs Clinton faces a tougher elec-tion than expected, against a candidatethat her team never envisioned would
be the nominee The same tendency hasbeen in evidence in the Democratic racewhere she failed to realise the potency ofrival Bernie Sanders’ campaign
“Clinton starts off with a slight tage She has the demographic trends onher side and Trump has a highernegative rating than she does with thefastest-growing sectors of the elector-ate,” said Mr Madden “But if there
advan-is one thing Hillary Clinton has shown inher last two presidential runs, it’s thatshe knows how to lose big leads andsquander advantages.”
Trump plans to insult his way
to victory over rival Clinton
Media-savvy tycoon applies technique that helped him oust 16 Republican opponents
All revved up:
veterans andbikers listen toDonald Trump,below bottom,
at the annualRolling Thunderparade inWashington,where he railedagainst HillaryClinton, right
Mladen Antonov/AFP/Getty
SHAWN DONNAN — WORLD TRADE EDITOR
The US has been accused of being abully and undermining the WorldTrade Organisation’s dispute systemafter vetoing the reappointment of aSouth Korean judge The EU and legalscholars have warned that the vetothreatens the impartiality of the globaltrade court
US opposition comes at a time whenmany believe Washington has been los-ing faith in the WTO and is gearing upfor a big fight with China over how andwhen economies can deploy anti-dump-ing defences against cheap imports
The US told fellow WTO members lastweek that it could not support the reap-pointment of Seung Wha Chang, arespected South Korean expert in inter-national trade law whose four-year term
on the seven-member resident late body ends today
appel-Washington cited the body’s decisions
in three cases involving the US, and oneother, as examples of what it said was apattern of WTO panels overreachingand issuing “abstract” decisions
“The appellate body is not an demic body that may pursue issues sim-ply because they are of interest to them
aca-or may be to certain members in theabstract,” the US told WTO members
“It is not the role of the appellate body toengage in abstract discussions.”
But other WTO members, includingBrazil, Japan and the EU, say the USobjection to Mr Chang serving a secondfour-year term, as is customary, risksundermining the appellate body and itsindependence and therefore the entiredispute system
That is of particular concern becausethe WTO’s role in resolving trade dis-putes is widely seen as a great strength
of the intergovernmental organisation,which was created in 1995 as a successor
to the post-second world war GeneralAgreement on Tariffs and Trade
“This is unprecedented and poses avery serious threat to the independenceand impartiality of current and futureappellate body members,” the EU toldthe governing body for the WTO’s dis-pute settlement system last week
In an interview, Roberto Azevêdo, theWTO’s director-general, declined tocomment on the US objection to MrChang’s reappointment “They havetheir concerns, which they made veryexplicitly,” he said
But he admitted the reappointment of
panellists was a sensitive issue andraised the possibility of memberschanging the way judges were selectedand their term limits
Some at the WTO have proposed thatmembers of the appellate body serve asingle seven-year term
The US intervention comes ahead ofwhat is likely to be an important periodfor the appellate body Among theissues it is expected to decide arewhether China is entitled to “marketeconomy” status within the WTO, animportant designation that would helpBeijing fight back against anti-dumpingcases, such as those being mountedagainst Chinese steel imports on bothsides of the Atlantic
Beijing claims it should be awardedthe status automatically on the 15thanniversary of the country joining theWTO on December 15
The US and some opponents inEurope insist the text of China’s acces-
sion agreement is more ambiguous andthat eventually the issue will have to bedecided by the appellate body
Such a dispute would be among themost consequential the WTO has con-fronted since China became a member
of the WTO in 2001 It might also be one
of its most political
Owing to a collapse in steel pricesblamed on Chinese overcapacity andthe shuttering of competing millsaround the world, the issue of China’smarket economy status has becomepolitically sensitive around the world,particularly in Europe
Greg Shaffer, an expert in WTO law atthe University of California Irvine, saidthe US move to block the reappoint-ment of Mr Chang risked injecting poli-tics into what ought to be a purely legalprocess
It also, he said, was “making the USlook like a bully, and not an upholder ofrule of law principles”
Prof Shaffer added: “The US responseand example will have ripple effectsaround the world Undermining theindependence of the WTO appellatebody will affect the entire rules-basedsystem to resolve trade disputes.”
Global trade
Washington accused of damaging ‘impartiality’
of WTO by vetoing judge
Roberto Azevêdo, WTO’s director- general, admits the reappointment of the body’s judges
is a sensitive issue
STEFAN WAGSTYL — BERLIN
German activists are poised to taketheir protest over an EU-Canada tradedeal to the country’s constitutionalcourt as opposition to transatlantictrade pacts continues to rise
German non-governmental tions says the Comprehensive Economicand Trade Agreement runs contrary tothe German constitution, the rule of law,and parliamentary democracy
organisa-The move comes amid a rising tide ofprotest against the much larger Transat-lantic Trade and Investment Partner-ship pact between the EU and US, whichworld leaders pledged to conclude bythe year-end at last week’s G7 summit inJapan
“Ceta is TTIP through the back door,”
said Thilo Bode, one of the leaders of thecampaign against the agreement,announcing the planned court case yes-terday “We must stop this.”
The move comes at a critical timewhen public support for Ceta and, espe-cially, the TTIP, is flagging on both sides
of the Atlantic While Ceta talks wereconcluded in 2014, the accord is stillawaiting ratification by the EuropeanParliament and the EU’s 28 nationalparliaments
To maintain political momentum, theEuropean Commission has asked mem-ber states to approve Ceta’s “temporaryimplementation” this autumn Officialshope that if sceptics see Ceta in action,some of their fears will be assuaged andthe way will be smoothed for the accept-ance of the TTIP
But the German activists are ingthemove,sayingthepactisunconsti-tutional They also object to the disputeresolution mechanism proposed underCeta and the TTIP, in which foreign com-panies will be able to bypass nationalcourts and instead appeal directly tointernational arbitration panels
challeng-The NGOs have criticised what theycall “special pleading rights for inves-tors, expert bodies without democraticlegitimacy and the missing participa-
tion of the German parliament”.Bernhard Kempen, director of theinternational law institute at Cologneuniversity, who is leading the campaign-ers’ legal case, said: “Ceta is not onlydangerous in democratic-politicalterms but also alarming in constitu-tional law terms The constitutionalcourt’s previous judgments lead only tothe conclusion that international legaltreaties of this kind do not correspondwith the constitution.”
The campaign brings together pact, an anti-globalisation group thatclaims 1.8m supporters, Foodwatch, aconsumer protection body, and MoreDemocracy, a group lobbying for greaterpublic participation in politics, such asthrough referendums
Cam-The planned legal action follows aseparate online grass roots campaign
led by Andreas Fisahn, a law professor
at Bielefeld University, which has ered 70,000 signatures for a constitu-tional court claim
gath-The number far exceeds the previousrecord, held by opponents of the ESM,the eurozone’s financial rescue mecha-nism, who secured 37,000 backers.Yesterday’s announcement comesafter 30,000 protesters attended dem-onstrations against Ceta and the TTIP inHannover last month, staged during USPresident Barack Obama’s visit to thecity’s trade fair
During his visit, Mr Obama andAngela Merkel, Germany’s chancellor,asked for a push to conclude the TTIPnegotiations by the end of the year Butwith protectionist rhetoric flaring up inthe US presidential election, and bothGermany and France facing keynational polls next year, the politicalconditions remain uncertain
Transatlantic accord
Protest against EU-Canada deal heads to German court
‘International legal treaties of this kind
do not correspond with the constitution’
‘When you have two candidates possessing [poor]
ratings you can expect this will be
a race
to see who hits the bottom last’
Trang 9Tuesday 31 May 2016 ★ FINANCIAL TIMES 9
Trang 10MAY 31 2016 Section:Ad Page Time: 27/5/2016 - 14:10 User: baxterw Page Name: AD FILLER, Part,Page,Edition: LON, 10, 1
Trang 11Tuesday 31 May 2016 ★ FINANCIAL TIMES 11
President Muhammadu Buhari says his priority is to reconstruct ‘the spine’ of Africa’s biggest oil producer But, critics argue, his policies are adding to the country’s worst economic crisis in generations.
By Maggie Fick
administration, overly secretive Someview his resistance to compromise as arefusal to listen to alternative positions.Obiageli Ezekwesili, who served as aminister in two previous administra-tions and once led the World Bank’sAfrica division, recently criticised MrBuhari’s economic policies as “opaque”and “archaic”, saying that somethingthat “did not work in 1984 cannot possi-bly be a solution in a global economythat’s much more integrated”
Advisers to the president say his nal priority was to lift people out of pov-erty It was not to please the wealthybusiness community and skittish for-eign portfolio investors But those close
origi-to the administration claim there aresigns of a shift in ideology within gov-ernment: from the unbridled crony cap-italism of the past to a more state-drivenvision for promoting industry and jobs
Industrial revolution
Mr Buhari’s initial instinct, say advisers,was to batten down the hatches, andpursue capital and import controls simi-lar to those pursued by China in the1980s, while gradually building upexport capacity in sectors beyond oil.The aim was to engineer the begin-nings of an industrial revolution, createjobs and dedicate investment towardsrebuilding infrastructure Ethiopia, onthe other side of the continent, hasspurred the beginnings of an economictransformation using similar methods
In Nigeria’s case, however, it couldalready be too late The government’sability to control the capital account —the deficit doubled to 3.7 per cent of GDP
in 2015 — and restrict imports in a try rife with smuggling is questionable
coun-A Venezuela-style meltdown — oncedismissed out of hand — now no longerseems such an outlandish prospect.Some observers argue that this dooms-day scenario is forcing officials, includ-ing the president, to accept the need for
a course correction
“The bunker mentality has changed[in the past month] to a more open-to-discussion one” says Bismarck Rewane,chief executive of Financial Derivatives,
a consultancy in Lagos “Even if thechange [in policy] is involuntary, thecombination of inflation, slowing GDP,exchange rate pressure and the drop inoil production will bring change.”
taken so far but acknowledged that hehad been forced to listen to advice tochange course He said he supported thecentral bank’s new, as yet undisclosed,strategy “to ensure alignment betweenmonetary policy and fiscal strategy”
The president also hinted in a briefingwith local media that he was open toconsidering his options “The econ-omists come and talk things to me, andwhen I raise issues they talk over myhead instead of inside my head,” he wasquoted as saying in Nigeria’s ThisDaynewspaper “On the value of the naira,I’m still agonising over it I need to beeducated on this I am under pres-sure and we’ll see how we can accommo-date the economists.”
Mr Emefiele has been crucial to thepresident’s defence of tight currencycontrols as the best response to the eco-nomic crisis The two men meet fre-quently, according to one of Mr Buhari’sspokesmen, and their statements onmonetary policy over the past year arevirtually indistinguishable
Business argues that a controlleddevaluation would allow manufacturersand traders to make informed pricingdecisions, less dependent on the centralbank governor’s will Despite the recentcomments, however, companies are notholding their breath
Others in the government insist thatthe new budget will kick-start the econ-omy External borrowing to finance ithas yet to be secured, however, andbusiness remains unconvinced that gov-ernment spending alone will be enough
“It’s a monumental waste of money to
be trying to stimulate the economy onthe one hand and slowing it down on theother,” says Oyin Anubi, an Africa econ-omist at Bank of America in London
Losing allies
The damage is not just economic Thecountry’s travails have overshadowedprogress the president has made on theproblems he most wanted to tackle: theIslamist insurgency of Boko Haram andpervasive corruption in government
Most damaging though is the politicalimpact that is beginning to cost MrBuhari allies His decision-making styleappears, even to senior members of the
down,” says Charlie Robertson, chiefeconomist at Renaissance Capital
“[But] we think reformists will helpNigeria swerve in time and avoid that car crash,” he said, after a governmentdecision earlier this month to raise theprice of fuel by 67 per cent in response tomonths of crippling shortages
The price rise was interpreted as thegovernment accepting the reality ofsevere dollar scarcity But it fell short ofthe deregulation of state-set fuel pricesthat has long been urged by economistsseeking to ease the chronic distortions
in the economy It left many observerssaying shortages will return unless thegovernment loosens its grip on the price
of both fuel and the naira
In a speech on Sunday marking hisfirst year in office, Mr Buhari said he hadinherited a “state near collapse”, ill-equipped for the strain of low oil prices
Insecurity was widespread, “corruptionand impunity were the order of the day”
and the treasury had been emptied Theinitial challenge for his government hadbeen to block leakages and reconstruct
“the spine of the Nigerian state”
The central bank last week admittedthat the exchange rate cap — defended
by Mr Emefiele as a way of protectingstrategic imports from the low oil priceand shielding the poor from inflation —
is failing and should be abandoned Thecomments fuelled speculation of a pol-icy switch Mr Buhari, on Sunday,appeared defensive about the approach
ufacturers manufacturing will have theopposite effect.”
More than half a million workers losttheir jobs in the first four months of thisyear, according to official statistics Thelivelihoods of tens of millions more peo-ple employed in the informal sectorhave been hit by inflation of nearly 14per cent, spurred by escalating short-ages of basic goods and the rapid devalu-ation of the naira on the parallel market,where most traders are now compelled
to source their foreign exchange
And while a new wave of militancy inthe oil-producing Niger Delta has trig-gered a rally in the global price — it hit
$50 per barrel last week for the firsttime in seven months — the violence ismaking matters worse at home, withany gains offset by production losses Inrecent weeks, pipeline attacks have cutproduction to 1.45m barrels a day — farshort of the 2.2m assumed in this year’sexpansionary budget
Oil revenues typically account formore than two-thirds of governmentincome Collapsing prices and fallingproduction mean the government isnow operating on about one-quarter ofthe $5bn in monthly revenues it hadbefore the price fall began in mid-2014
Many state governments are now ble to pay salaries while power genera-tion levels are at their lowest in years
una-“Investors fear Nigeria is on a tionary road to Venezuelan-style multi-ple exchange rates and eventual melt-
director of one of Nigeria’s leading
banks, Godwin Emefiele had a
rep-utation for being soft-spoken and
unassuming In the year since he
became governor of the central bank, he
has stood out for the opposite
The change is being put down to one
thing: the control he wields over the
most scarce commodity in Africa’s
big-gest economy today: dollars One
busi-nessman says Mr Emefiele has become
so central to the running of the country
that “no one can operate without him”
Business, economists and indeed
former peers are blaming the policies he
has introduced — restrictions on
imports and tight control of the foreign
exchange market including its
artifi-cially pegged foreign exchange rate —
for compounding the worst economic
crisis Nigeria has experienced in
genera-tions Many are equally critical of
Presi-dent Muhammadu Buhari’s
endorse-ment of the governor’s unorthodox
poli-cies and say his repeated public backing
of them has undermined the
independ-ence of the central bank
“The economy was a mess anyway
and Nigeria was heading for a hard fall,
but should the fall be this hard?”
asks Kayode Akindele at TIA Capital, a
Lagos-based investment firm
That question is nagging at a growing
section of the public, angered that Mr
Buhari, the ascetic former military ruler
elected on a wave of optimism last year,
has not only failed to react fast enough
to the changing climate but made
mat-ters worse by experimenting with
out-moded remedies that have not
stemmed the economy’s freefall
Super-markets in Lagos are struggling to keep
their shelves stocked, fuel is rationed
and food prices have soared
“The pain level is going up,” says Olisa
Agbakoba, former head of the Nigerian
Bar Association “Everything is in short
supply.”
‘Self-inflicted’ wounds
The fortunes of Africa’s most populous
nation and leading oil producer have
long ebbed and flowed with the price of
oil, on which Nigeria depends for more
than 90 per cent of hard currency
earn-ings But economists list several factors
that make the current downturn
mark-edly more worrying
The structural change in the global oil
industry since shale reserves were
opened up by the development of new
fracking techniques in the US makes it
unlikely that major oil producers like
Nigeria will see a significant price
recov-ery any time soon
In 2008, the last time crude prices
crashed, Nigeria had savings to fall back
on This time it doesn’t: the
administra-tion of former president Goodluck
Jonathan squandered the proceeds of
the boom years in a bonanza of
profli-gacy and corruption before he was voted
out of office
Then there is what critics describe as
the “self-inflicted” wounds — the
cur-rency policies and associated import
controls set up to conserve hard
cur-rency by prioritising strategic imports
when Mr Buhari took power 12 months
ago These have starved existing
busi-nesses of inputs, leading to a collapse in
supplies of everything from medicines
to spare parts, while incidents of price
gouging have risen The policies are also
blamed for encouraging capital flight
while forestalling fresh investment
Inflows dropped by nearly 75 per cent to
$711m in the first four months of 2016
“No one, even investors like us with a
long-term view, is going to put money
into Nigeria in the expectation of losing
a third of the value of that investment,”
says a senior partner in a UK-based
pri-vate equity fund He and other investors
say that despite the president’s visceral
opposition to devaluation, it appears
inevitable
The impact has been chilling
Nigeria’s economy, which grew annually
at an average rate of 7 per cent in the
decade to 2014, contracted by 0.36 per
cent in the first quarter According to
most forecasts it is heading into
recession
The import controls and restrictions
on foreign exchange imposed by the
central bank have hit the
manufactur-ing sector hard, erodmanufactur-ing the credibility
of the Buhari administration’s ambition
to diversify the economy
“Growing non-oil income is a key
eco-nomic strategy of this government,”
says Keith Richards, a veteran of
Nigeria’s consumer goods industry who
used to run a subsidiary in the country
of Guinness, the brewer “Blocking
man-Under pressure
Sources: Thomson Reuters Datastream; Haver Analytics
Naira exchange ratesagainst the dollar ($ per naira)
150200250300350
Unofficial
Official
Oil production(million barrels a day)
Brent crude($ per barrel)
00.51.01.52.0
20406080100
Running on empty
Who are the Niger Delta Avengers? What
do they want? How seriously should theirthreats to shut down Nigeria’s oil and gassector be taken? The only question with
an unequivocal answer is the third one
Its leadership, backers and motivationsremain unclear But the devastatingeconomic impact of the group’s sabotagecampaign is plain to see It has cutNigeria’s crude exports by at least850,000 barrels per day with attacks thisyear on pipelines and export terminalsacross the Niger Delta, home of thecountry’s oil industry, and no stranger toclashes over calls for a fairer distribution
of oil revenues with the local community
The shutdown in exports by theAvengers is not yet on a par with that of
the militants of MEND at the height ofthe previous insurgency that ended with
a ceasefire in 2009 But with statefinances already severely strained by lowoil prices, economists predict Nigeria willfall more quickly into recession unless thedamage to energy infrastructure isrepaired and the sabotage ends
President Muhammadu Buhari hasordered army reinforcements to the Deltaand threatened to treat the militants likethe Boko Haram Islamists who haveterrorised the north-east of the country
The comparison has angered many in theDelta who argue that, even if thesabotage damages the economy, itshould be seen as a cry for attention
“[Buhari] tends to see the Delta as a
security issue it’s about handlingthe ‘bad guys’,” says one westerndiplomat “You hear almost nothing onthe underlying grievances.”
The failure of the 2009 amnesty isone point over which the Buhariadministration and many Deltanscould find common ground
“It was a bribe for peace,” saysCharles Ekiyor, a former leader of theIjaw Youth Council The deal wassupposed to include development ofthe impoverished region, he says Butunder Mr Buhari’s predecessor,Goodluck Jonathan — who is from theDelta — it did not happen Now thesame grievances are being exploited
by the Niger Delta Avengers
Oil fight
Delta violence hits output
Making a noise:
protesters inLagos demand
an end to fuel
Pius Utomi Ekpei/AFP/Getty
520,000Jobslostinthefirst fourmonthsof2016 aseconomystalled
$1.42bnGovernmentrevenue inApril2016,cutfrom
$5.2bninMay2014
0.36%
Thecontractionin theeconomyinthe firstquarterof20161.45mBarrelsofoilperday
—wellshortofthe 2.2mb/dtargeted
Cash shortage The oil price drop has
shredded government revenues andleft many states unable to pay wages
In control The central bank has
imposed import restrictions and tightcontrol of the foreign exchange market
Delta attacks Violence in the
oil-producing Niger Delta has cut output
by at least 850,000 barrels per day
‘No one, even investors with
a long-term view, is going to
put money into Nigeria in
the expectation of losing a
third of its investment value’
‘On the value of the naira, I am still agonising over it I
am under pressure and we’ll see how we can accommodate the economists’
Muhammadu Buhari
Godwin Emefiele has defended exchange rate policy as a way
to protect imports from the low oil price and shield the poor from price rises
Money men
Trang 12TUESDAY 31 MAY 2016
Few sections of British society favour
EU membership more strongly than
scientists A recent poll of 907 active
UK researchers by the scientific journal
Nature found that 83 per cent want to
remain in the EU while only 12 per cent
will vote to leave in the June 23
referen-dum Their enthusiasm reflects the
sci-entific success of Britain within the EU
Its universities and research labs are
highly productive by almost any
meas-ure: with 4 per cent of the world’s
scien-tists, the UK produces almost 16 per
cent of its most cited research papers
Although the country has been a
sci-entific powerhouse since the 19th
cen-tury, its recent performance owes a lot
to an inflow of EU funding, which has
compensated for flat UK government
support Britain contributes 12 per cent
to the total EU budget but receives
more than 15 per cent of its science
funding — and it wins a particularly
large share of grants from the
Euro-pean Research Council set up in 2007
to support world-class science
Some participation would survive
Brexit, because the EU permits
non-members to take part in its flagship
Horizon 2020 research programme if
they pay an appropriate subscription
Even so UK science would take a
sub-stantial financial hit, estimated at £1bn
a year by the technology consultancy
Digital Science Leave campaigners
may argue the government could make
up the gap from money saved by
Brit-ain no longer having to contribute to
the EU But in practice, there would be
so many other calls on this pot that
sci-ence is extremely unlikely to receive
enough extra national funding to
com-pensate for the loss
Financial self-interest is not the only
reason why most researchers dread the
prospect of Brexit Science today is a
supremely international activity and
leading UK labs are staffed with bright
young scientists from across Europe, as
well as homegrown researchers and
visitors from elsewhere in the world
The past few years have also seen a
wel-come shift in the traditional British
academic attitude of automatically
looking across the Atlantic to an
Amer-ican university for postgraduate or
postdoctoral experience; many
research students now think first of a
post elsewhere in Europe
Whatever the Leave campaign may
say, Brexit would inevitably damagethe international spirit of science in the
UK and across Europe Even if the ernment made it easier for researchers
gov-to come gov-to Britain from non-EU tries, they would not make up for theinevitable loss of people from else-where in Europe
coun-Beyond the academic world, Brexitwould cost Britain its role as host to two
EU institutions important for the lifesciences industry Most damagingwould be the loss of the European Med-icines Agency, which employs 600 peo-ple in London and, more importantly,acts as a magnet for international phar-maceuticals groups to locate theirEuropean base in Britain If the EMAleaves London and Britain’s own Medi-cines and Healthcare products Regula-tory Agency has to pick up the pieces,the disruption in the licensing andapproval of new drugs would be dam-aging for patients and medical practice,
as well as the pharma industry
The other institution at risk is a newone: the Unified Patent Court, due tostart work next year as part of a systemthat would enable inventors to obtain a
“unitary patent” valid across most ofthe EU, rather than having to registerthe patent in each of 28 countries
Brexit would scupper plans to locatethe court’s life sciences division in Lon-don and leave the whole project in tur-moil — to the dismay of science-basedindustries from pharma to electronics,which favour the unitary patent as away to foster innovation by making iteasier to protect intellectual property
Some scientists complain about guided and excessive regulations fromBrussels, but the UK has been able toimprove many of them (the clinical tri-als directive, for example) from withinthe EU British researchers working inEurope would still be subject to EU reg-ulations after leaving but would have
mis-no way to amend them
There may be a remote possibilitythat research would flourish afterBrexit in a new spirit of global collabo-ration, free of annoying Brussels regu-lations and with the UK governmentmaking up for lost EU funding But nosensible scientist would go into anexperiment with such a small chance ofsuccess Research is a key driver of eco-nomic growth and prosperity — andshould not be put at risk
Research collaboration has benefited hugely from EU membership
As an all-purpose insult,
“neoliberal-ism” has lost any meaning it might
once have had Whether it is a
sup-posed sin of commission, such as
priva-tisation; one of omission, such as
allow-ing a bankrupt company to close; or
just an outcome with some losers,
neo-liberalism has become the catch-all
criticism of unthinking radicals who
lack the skills of empirical argument
The greatest insult of all, however, is
that to our intelligence when august
international institutions hitch their
wagon to these noisy criticisms This
sorry spectacle befell the International
Monetary Fund last week when it
pub-lished an article in its flagship
maga-zine questioning its own neoliberal
ten-dencies and concluding that “instead of
delivering growth, some neoliberal
pol-icies have increased inequality, in turn
jeopardising durable expansion”
The word “some” did a lot of work in
that sentence When it came to
favoured IMF policies, the authors
from the fund’s research department
conclude that competition, global free
trade, privatisation, foreign direct
investment and sound public finances
in the vast majority of countries all pass
muster That exonerates most of what
passes as neoliberalism
Instead of this vast array of settled
good practice, the article calls into
question two policies: unfettered
inter-national flows of hot money, and
exces-sively rapid efforts to reduce public
deficits None of this navel-gazing is
remotely new or innovative The IMFhas queried the value of internationalportfolio investment since the Asiancrisis almost two decades ago, while ahorses-for-courses approach to fiscaldeficits has been the global consensusfor nigh on a decade
It may appear easy to forgive and get the criticisms as the childish rheto-ric of the parts of the IMF which standaloof from the nitty gritty of helpingreal countries in terrible circum-stances But the attack on neoliberal-ism is far more dangerous than that Itgives succour to oppressive regimesaround the world which also positionthemselves as crusaders against neo-liberalism, subjugating their popula-tions with inefficient economic policyand extreme inequality using the fullpower of the state
for-Against this risk, what has the IMFachieved? Some raised eyebrows fromthose unaware of the fund’s work, a lot
of eye-rolling from the betterinformed, and not even the grudgingapproval of Naomi Klein on Twitter Inseeking to be trendy, the IMF insteadlooks as out of date as a middle-agedman wearing a baseball cap backwards
Worst of all, in seeking a public tions coup from relabelling existingpolicies, the fund has taken its eye offthe ball By far the most important glo-bal economic issue is the persistentdecline in productivity growth thatthreatens to undermine progress forall This does not get a mention
rela-The International Monetary Fund should stick to its knitting
For science, Brexit is
an experiment too far
A misplaced mea culpa
someone once said about Marmite Ihave heard the same cliché applied toIndia But it is untrue, whether youare talking about the salty black goothat Britons spread on their toast orthe world’s largest democracy
For Marmite, there must be peoplewho neither adore it nor loathe it butfind it rather so-so For India, thecliché is wrong in a different way Likemany friends here (Indian andforeign) we realise this is not aneither/or choice: we love it and hate itpassionately at the same time
So here — in my last column in thisslot before the end of a south Asiaposting — are four loves and fourhates for the four years we haveenjoyed and endured life in Delhi
Hate: Pollution I thought air
pollution in Hong Kong was bad when
we lived there a decade ago, but Delhihas been worse, more vile even thanBeijing for carcinogenic particles Forfive months last winter we barely sawblue sky through the pall of dust andsmoke generated by the burning ofwood, cattle dung, crop waste, coaland diesel in one of the world’s biggestmegacities (25m inhabitants andrising) Rivers and groundwater arepolluted too, but water filters workbetter than air filters
Love: Animals Paradoxically, India
is also a refuge for wildlife in spite ofcompetition for space from 1.3bnhumans It is not only the tame (theurban elephants, camels and cows) orthe clever (like the swooping kitesthat snatch burgers from the hands of
baseball spectators at the Americanschool) You can see Sarus cranes, theworld’s tallest birds, mincing alongnext to factories in Uttar Pradesh, orwatch hornbills and ibises from ourstudy window in New Delhi
Hate: Trolls In the internet age, it is
the fate of journalists (and historians,politicians and academics) who writeabout India to be deluged with onlineabuse questioning their sanity andobjectivity Most of the attacks are ill-informed and many seem to comefrom Hindu nationalists based in the
US and the Gulf It would be nice if thecritics read more than the headlinesand engaged in a reasoned debate
Love: Free speech In some ways,
India is the easiest country in theworld to work as a journalist AnIndian — whether soldier, politician orfarm labourer — is rarely lost forwords or reluctant to speak to thepress Most Indian business leaderseschew the spin-doctors andcorporate gobbledegook that maketalking to US chief executives sopainful Indians just discuss what isgoing on Long may it last
Hate: Bureaucracy Just two
examples First, babies born toforeigners in India must pay fines foroverstaying their (non-existent) entryvisas: true, I promise Second, ArvindSubramanian, the government’s chiefeconomic adviser, complainedrecently about the absurd multiplicity
of electricity prices in India In onestate, which he politely did not name,there was a special rate for mushroomand rabbit farms I looked it up, and it
is Andhra Pradesh, which has 89different prices, ranging from zero forsmall farmers to 11.58 rupees per unitfor advertisement hoardings, all listed
in a 39-page document and no doubtenforced by a large number of civilservants (The rate for rabbit farms isRs5.63) You can see why I admirethose who do business in India
Love: Flying Just over a decade ago,
you struggled through crowds of touts,fixers, agents and weeping families toget in and out of chaotic airports andhad to arrive hours in advance to besure of catching an internationalflight Now new airports have beenbuilt, new airlines launched and orderhas been restored New privateentrants such as IndiGo are as efficientand cheap as EasyJet in Europe
Hate: Bad roads, bad mobile phone
connections, bad plumbing,dangerous electric wiring and shoddybrickwork What happened to theMughals, with their waterways andfine brickwork? (See below.)
Love: Ancient civilisations The
remains of their rich art andarchitecture are everywhere fromOrissa to Karnataka, and — with theexception of Rajasthan and theMughals — surprisingly little knowneven among Indians
In sum, that most famous oftourism advertising slogans,
“Incredible India”, was perfectbecause it was true: India is incrediblyfrustrating — but also incrediblyrewarding
victor.mallet@ft.com
Four years
in incredible India: our hates and loves
New Delhi Notebook
by Victor Mallet
Sir, In Europe’s illustrious, butsometimes fractious, history, therehave been many pivotal moments
Right now, we are at another fork inthe road Since the start of this decade,Europe has been challenged —problems with the euro, terrorism,migration and now the consequences of
a potential Brexit As the debate onthese issues continues, the value of the
EU has been questioned
We, the European Round Table ofIndustrialists (ERT), believe the casefor Europe has never been stronger
Our organisation represents more than
50 European companies sustainingnearly 7m jobs Our continent hasbenefited immeasurably from our EU
Over the past 60 years, businesses haveflourished and families have generallybecome more prosperous thanks tocloser ties between people andinstitutions across Europe
The EU is now the world’s largesteconomy and trading block It accountsfor 16 per cent of the world’s importsand exports and has negotiated tradeagreements with numerous countriesworldwide This scale gives ustremendous bargaining power ininternational trade negotiations andthe ability to defend our jobs andindustries against external threats
Market liberalisation in areas such astelecoms, airlines and energy hasbrought greater choice, competitionand efficiency Travel by road, rail orair has become easier thanks to EUlegislation Collaboration on industrialand scientific research projects hasbeen facilitated by EU initiatives, whilepoorer regions have had their
economic prospects enhanced thanks
to secure our energy supply and tolower carbon emissions while ensuringthe continent remains competitive
Education and skills training needimprovement so that citizens cansucceed in the labour market Smallbusinesses need access to capital andhuman resource markets acrossborders and we must realise the fullpotential of digitisation and innovation
to create a true digital single market
This will enhance the competitiveness
of all European businesses creatingjobs and fuelling economic growth
An unravelling of the single marketand its rules for 28 countries wouldreduce our prosperity And, whilerespecting the decision of the people inthe UK, we believe a Europe without
the UK would be weaker, just as the UKitself would be weaker outside Europe
As leaders of some of the largestcompanies in Europe, we call forrenewed confidence in the EU as thefirst step to addressing our sharedchallenges Only a joint approach tocommon problems will achieve thechanges needed to improve the livingand working conditions of the people ofEurope, especially for young peopleand future generations
Europe without the UK would be weaker and less prosperous
Letters Email: letters.editor@ft.com or
Surrounded by two terrorist entitiescommitted to its destruction, a failedstate propped up by Russian militarymight on its northern border anddivisions of Isis on its southern border,the Israeli people may simply feel it issafer to have as its prime minister aformer special forces commando whocan forcibly deter those who wish todismember Israel
Israel has shown with Egypt andJordan that it is willing to give upterritory to true partners who acceptits right to exist, the precondition toany future Palestinian state
Martin Spector
London NW11, UK
Demagogues the answer
to what’s on our minds
Sir, Martin Wolf, in “How to defeatrightwing populism” (May 25), makesthe statement that demagogues do notgive answers They don’t have to Theyare the answer to what is on thepublic’s mind: unpunished crime,failing public schools, unemployment
— and no political party is doinganything about it
Mr Wolf then makes a comment that
at first glance sounds very intelligent —that populist candidates are unaware ofthe institutions upon which society isbased, and the extent to which thoseinstitutions are responsible for today’sprosperity That intelligent statement
is not what it seems It’s really fear ofdemocracy, of letting the masses votefor whomever they choose
David Parker
San Francisco, CA, US
Bradford was pioneer of cosmopolitan outlook
Sir, Various contributors to the FThave commented in congratulatoryfashion on the enlightenment of themetropolitan elite in its recent Londonmayoral election, some suggesting thatthis cosmopolitan outlook would notextend to the benighted provinces
Bradford had a Muslim mayoressfive years ago
To think Denmark, Norway orFinland provide more aid to Somaliathan the Saudis, Kuwaitis, or UAE ismind-boggling
A related thought: Turkey has taken
in about 2m refugees and displacedpersons from the Syrian civil wars,while the House of Saud has taken infew, if any, Syrian refugees
Perhaps Turkey’s assistance toSomalia is primarily a function of itsgeostrategic ambitions, but is there amoral or humanitarian aspect alsoworth noting?
David Tomsovic
Daly City, CA, US
Repel extremists in EU by reducing economic woes
Sir, Your point in “Voters need acredible alternative to populism”
(May 28) — that the only way to see offthe rise of extremists in Europe is toprovide effective policies to generateeconomic activity that offers hope tothose who feel the economic systemhas disadvantaged them — is crucial
However, your call for pressing onwith monetary stimulus will need to be
of the kind that generates work acrossthe whole of Europe, rather than — ashas happened — mostly inflating assetsheld by wealthier sections of society
A parallel fiscal stimulus shouldinvolve determined action to close thetax gap by cracking down on evasion
as well as avoidance, which couldgenerate £20bn or more in the UK andmaybe €200bn across Europe, to helpfund the rebuilding of the EU
At the same time the Green NewDeal group has outlined how such anapproach to fiscal and monetary policy,including “green infrastructure QE”
could achieve this and in so doing helpreduce economic insecurity continent-wide, which is one of the key recruitingsergeants for the rise of populism
Richard Murphy
Professor of Practice in International Political Economy, City University, London EC1, UK
Expendable world leaders have a short shelf life
Sir, World leaders travel around theworld in luxury, protected by an army
of security guards to get a familyphoto at the G7 Yet they are the mostexpendable people in the world
When they leave or are removedfrom office or pass into the next world,they are replaced within seconds Sowhy the fuss?
Allied forces, I don’t think we shouldapologise for what happened inHiroshima and Nagasaki War is hell onearth when our common humanitybreaks down into chaos, and decisionsmust be made that can have
devastating consequences
That said, we can only learn fromthe past The unprecedented use ofnuclear bombs in the second world wardemonstrated the terrifying power thathumans developed to destroy oneanother that has the potential to makethis unique life-supporting worldsterile via a nuclear winter
Who’s going to be the first politician
to seek to combine them: helicoptermoney to finance UBI? Step forwardDonald Trump?
The private sector is more like theold public sector — able to hide behindbureaucracy and spreadsheets withoutrisking jobs
Poor productivity may be aneconomic measure but it is apsychological phenomenon
Trang 13Tuesday 31 May 2016 ★ † FINANCIAL TIMES 13
Comment
(5-25 years) precisely so that these chases would be from non-banks Indoing so it guaranteed the success of itsprogramme
pur-The fundamental problem is that theECB and the BoJ are trying to implement
QE through the normal credit creationchannels of the banking system But thetraditional transmission channels arebroken — either because banks are risk-averse and do not wish to lend, orbecause households and firms are stillsignificantly leveraged and do not want
to borrow
In these circumstances, the policy ofrelying on ever lower interest rates can-not be assured of success, even if ratesare negative Given that the standardtransmission system for monetary pol-icy through the banking system is bro-ken, central banks need to circumventthe banks if they are to create new pur-chasing power, restore normal eco-nomic growth and return to 2 per centinflation and normal interest rates
The writer is chief economist at Invesco and
a member of the BoE’s shadow Monetary Policy Committee
its will be created, expanding the moneysupply
Of course, if firms or households aredeleveraging — repaying debt — the cen-tral bank may need to conduct evenlarger scale asset purchases to counterany reduction of deposits due to thedebt repayments
The second rule is that the centralbank should buy only long-term securi-ties This ensures that the central bank’sportfolio is not rapidly eroded by allow-ing a high proportion of its securities tomature too soon As a result the volume
of funds injected into the economy canremain stable for a long period of time
The BoJ has repeatedly broken boththese rules, while the ECB has mostlyviolated the first rule Under QE1 andQE2 the Fed purchased treasury securi-ties with maturities as short as two yearsinstead of solely longer-term debt and,consequently, from September 2011 ithad to conduct $667bn of what wascalled “Operation Twist” to unwind thismistake By contrast, when the Bank ofEngland announced its QE programme
in February 2009, it said explicitly that
it would buy gilts with longer maturities
since spending will not resume normal
or potential growth rates unless excessleverage is eliminated
Additionally, liquidity needs to bereinjected into these economies Or elsethey should be provided with additionalpurchasing power, but without adding
to leverage
There are two rules for central banks
to follow when designing a QE
pro-gramme The first is that the centralbank should only buy securities fromnon-banks The reason is that the pri-mary purpose of doing QE is — or should
be — to expand purchasing power If thecentral bank buys securities frombanks, there can be no assurance thatthe money supply will increase How-ever, if it buys securities from non-banks, this guarantees that new depos-
been deployed in recent years The QEoperations conducted by the Fed andthe BoE have largely been successful forthree reasons First, because they weretargeted at the purchase of securitiesfrom non-banks Second, because theytherefore increased the stock of money
or purchasing power held by firms andhouseholds directly And third becausethey were consistent with a reduction inprivate sector leverage
By contrast, the brand of QE mented by the BoJ and the ECB has hadmuch less success Again, there arethree main reasons for this First, theoperations of both central banks weretargeted largely at the purchase of secu-rities from banks As a result, they havenot materially increased the stock ofmoney or purchasing power held byfirms and households Nor have theyhelped to reduce private sector lever-age
imple-To restore economic growth and raiseinflation closer to the target of 2 per cent
in both Japan and the eurozone, makers need to achieve two sets ofresults They need to encourage therepair of private sector balance sheets
been conducting
quantita-tive easing — the buying of
financial assets by a central
bank — for just over three
years, while the European Central Bank
has been doing QE for a little more than
a year In neither case have the results
been satisfactory — despite interest
rates in both Europe and Japan being
driven down into negative territory
Why have these two central banks
achieved far less success than either the
US Federal Reserve or the Bank of
Eng-land? Fundamentally, the reason is that
interest rates are not a solution to the
problems of the Japanese and eurozone
economies
Among the major developed
econo-mies — the US, the eurozone, Japan and
the UK — two different types of QE have
flair for stylised lence, a Conservative
vio-MP told The SundayTimes that he longs tostab prime minister David Cameron in
the front, savour his expression, rotate
the blade and then withdraw it for
sub-sequent use on George Osborne, the
chancellor of the exchequer This is
presently the saner of Britain’s two great
political parties
Like a Twitter troll with an egg for a
profile picture, the parliamentarian’s
swagger did not extend to identifying
himself Other Tories pour their
pesti-lence in open view Andrew Bridgen MP
says his leader is “finished” after
cam-paigning too brusquely to keep Britain
in the EU Nadine Dorries, with the
grav-itas of someone who defied her partywhip to enter a reality television showonly to get voted off after 10 days, isunmoved by Mr Cameron’s democraticmandate Anything shy of a 60-40 win
in next month’s referendum should, shesays, end a premiership that votersrenewed only last year
Britain is not where history happensany more but our two flirtations withsecession — Scotland’s from the UK, theUK’s from the EU — pique the curiosity
of outsiders They must look at theintra-Tory venom and assume its seep-age into wider society If Scots were last-ingly politicised, and riven, by their ref-erendum, Britons as a whole might betoo The stakes are as large, the facts ascontested, the principals on each side asseethingly at odds as they were in Scot-land in 2014
And still we demur The notable ture of this referendum is its lack ofnotoriety With three weeks to go, pubsare not blazing with anticipation or ran-cour Friends and relatives are not fall-ing out Campaign events are unmarred
fea-by anything darker than cheeky les On the morning of May 30, only one
heck-referendum-related story made the 10most-read on the BBC news website, andthat was trumped by a crocodile attack
in Queensland, Australia
This is not indifference, as such Mostvoters, according to a recent survey byOpinium, rate the referendum above ageneral election in importance But theyknow the matter is theirs to settle Viru-lent emotion makes no sense to them
before June 23 or, I suspect, after,regardless of the result They will decideand move on, even if their governingparty cannot
A certain kind of educated man used to judge compatriots by whichside they would have taken at MarstonMoor, a patch of Yorkshire where parlia-mentarians defeated royalists in theEnglish civil war Nations have these
English-moments, when identities are definedand faultlines etched to last Ireland’sviolent disagreement with itself over theFree State Treaty in 1922 was one: thebelligerents spawned political partiesthat still dominate Scotland’s bloodlessbut testy referendum was another
Thatcherism, more a process than anevent, retains some of the same capacity
to energise and embitter
On this emotional scale, Europe fails
to score The country cannot be ingly divided by a vote that most peoplecould have lived without in the firstplace This is why Leavers, in the event
endur-of defeat, will have to abandon theirrecourse of a second referendum Even
if they could corral a parliamentarymajority for it — not a cinch, as mostTories just want this damned questionout of the way — voters would need avery good reason to go through the rig-marole again within a decade or two
Britain is not Scotland and cism is not nationalism There is hardlysufficient zeal out there to keep thiscampaign going There will not beenough for a re-run
Euroscepti-If Mr Cameron legislated to gift Leavers
a five percentage-point top-up on ever vote share they achieve nextmonth, they would deplore his refusal tomake it 10 The hatred some Tories feelfor the only winner they have had for ageneration, and the giver of their cov-eted referendum, beggars logic But it ishis burden Yes, the wreckers need onlynumber a dozen or so to disrupt the gov-ernance of the country But similar tox-ins coursed through the last Toryadministration in the 1990s, and Britainenjoyed a goldilocks economy regard-less Nations can succeed despite theirpolitics The Tories’ distemper is no ver-dict on this land of bottomless sanity It
what-is not our problem Our equilibrium willhold
In his dotage, Mr Cameron mayremember this referendum as thebeginning of the end of a premiershipthat should have lasted quite a bitlonger The rest of us will remember it asthe time when, obeying GK Chesterton,
“a few men talked of freedom, whileEngland talked of ale” That is, if weremember it at all
janan.ganesh@ft.com
The country cannot be enduringly divided by a vote that most people could have lived without
Successful central banks focus on expanding purchasing power
economies
is taking a treacherous turn.Two years after the militantSunni group declared itsbrutal caliphate, the US andits allies in Iraq and Syria have begun atwo-front offensive to dislodge the mili-tant group from its strongholds in theIraqi city of Falluja and Raqqa in Syria.But, while the campaign has madeprogress, the composition of the forcesleading the battles in the two Arab Sunnicities is intensifying sectarian and eth-nic tensions in the bitterly dividednations and beyond The danger is thatthe US-led action will, ultimately, helpIsis gain legitimacy as a defender of Sun-nis — even if it cedes territory
Heightened fears in Syria, Iraq andthe wider region about the offensive inFalluja and Raqqa bode ill for the long-term fight against the group With west-ern help channelled to militiasbeholden to the Shia regime in Iran andclose to Tehran’s allies in Damascus, thefight is widely seen in the region asnakedly sectarian
The US-backed offensive is the first ofits kind since the American-led anti-Isiscampaign began soon after the groupswept into Iraq America has longsought to avoid providing air support forShia and Kurdish militias to fight in twoSunni areas at once: when Baghdadlaunched the battle to retake the city ofTikrit from Isis in March last year,Washington refrained from providingair strikes in support of the estimated30,000 Shia fighters until the battlestalled three weeks later
The US is presenting the two
offen-sives as led by inclusive and nationalcoalitions In the region, however, sec-tarian polarisation is only growing Ara-bic media outlets — which tend to echoSunni political views — such as London-based al-Hayat newspaper, havefocused coverage of Falluja on reportsthat Major General Qassem Soleimani,the Iranian spymaster, was leading thebattle along with other militiasbeholden to Tehran Al-Araby pub-lished a cartoon depicting Americanhelicopters holding the people of Raqqahostage beside an image of an Isis mem-ber doing the same to a condemnedman
More significant is a report from backed anti-Isis activist organisation,Raqqa is Being Slaughtered Silently Itannounced last week that the fact thatthe battle in the city is being led by thePeople’s Protection Units (YPG) — withties to the Kurdistan Workers’ party, thearmed separatist group based in Turkey
US-— is pushing residents to join forces withIsis The YPG is seen as close to the Syr-ian regime and was allegedly engaged indisplacement of Arab families in north-ern Syria, which Amnesty Internationalsaid could amount to war crimes Thefact that a US-backed group is criticisingthe role of the Pentagon-backed YPGagainst a group that killed some of itscolleagues is remarkable
Such divisions offer Isis an nity to present itself as a custodian of theSunni — especially in Iraq, where it hasestablished itself as the only Sunni mili-tant group able to stand up to militiassupporting the Shia-dominated govern-ment The fear is that a similar scenariowill play out in Syria in the next fewyears; primarily in places such as Raqqa,where local resistance has been weak.The sectarian situation emerging inFalluja and Raqqa, and the responsesacross the region, is one the US has longsought to avoid It began training Sunniforces to retake cities such as Mosul andRaqqa, an effort that faded when forces
opportu-in Baghdad resisted a bill to establish anational guard including Sunni units.But with this campaign, backed bygroups abhorred by residents of the twocities, it seems to have privileged a tacti-cal victory against Isis over a strategicone
It looks likely to provide Isis with a gift
it has long wanted, especially in Syria:creating for ordinary people the percep-tion that their choice is between its ownjihadis and militias they see as invaders
The writer is a fellow at the Tahrir Institute for Middle East Policy in Washington and a co-author of ‘Isis: Inside the Army of Terror’
America’s Middle East allies could win friends for Isis
OPINION
Hassan Hassan
Relying on groups abhorred
by local residents, the US has privileged a tactical victory over a strategic one
Tory infighting abounds but nobody else cares
risen under Mr Xi, so the country’s eign policy has become more nationalis-tic and more willing to risk confronta-tion with the west and with China’sAsian neighbours Beijing’s increasinglytough assertion of its territorial andmaritime claims, epitomised by its
for-“island-building” in the South ChinaSea, has led to stand-offs with the USand Japanese navies These near-clashesmay serve a political purpose In hardereconomic times, the Communist partymay need new sources of legitimacy,and confrontation with Japan and the
US at sea is liable to stir patriotic port for the government
sup-The key to the Deng formula that ated modern China was the primacy ofeconomics Domestic politics and for-eign policy were constructed to createthe perfect environment for a Chineseeconomic miracle With Mr Xi, how-ever, political and foreign policy imper-atives frequently appear to trump eco-nomics That change in formula looksrisky for both China and the world
cre-gideon.rachman@ft.com
ment, with smooth transitions of ership managed by the party itself HuJintao, Mr Xi’s colourless predecessor,epitomised this system He neverencouraged a cult of personality, servedtwo terms in office, and then left power
lead-Mr Xi has broken with this model He
is now widely said to be the most ful leader of China since Mao A syco-phantic official media is encouraged, lit-erally, to sing his praises (The mostnoted ditty is called “Uncle Xi LovesMama Peng”, a saccharine reference tothe president’s wife, Peng Liyuan.) Atthe same time, Mr Xi has launched acrackdown on corruption that hasresulted in hundreds of thousands ofconvictions, terrifying much of China’sbusiness and political elite The result isfevered speculation in Beijing — includ-ing rumours of purges, attempted coupsand assassination attempts Many pun-dits believe that Mr Xi is now deter-mined to serve more than two terms inoffice — a development that would over-turn the model of collective leadership
power-At the same time as economic andpolitical tensions within China have
But now growth of 6-7 per cent would beregarded as a good result
A healthy economy is crucial to nal stability The Communist party stillresolutely rejects any move towardsdemocratic elections as unsuitable forChina Instead, the country’s leadershave relied on rapid economic growth togive the political system a “performancelegitimacy”, which party theorists haveargued is far deeper than the mandateendowed by a democratic election But afaltering economy — or, worse, a finan-cial crisis — could well undermine theparty’s legitimacy
inter-When it comes to politics, in the Mao era the Communist party hassought a middle path between dictator-ship and democracy The idea was toembrace a collective style of govern-
post-and cautious approach to the world thatbecame colloquially known in the west
as “hide and bide”, after Deng’s famousadvice to his colleagues to “hide yourcapacities, bide your time”
Under Mr Xi, who assumed the ership of the Chinese Communist partytowards the end of 2012, all three keyingredients of the Deng formula havechanged In politics, China has movedback towards a model based around astrongman leader — Mr Xi himself Ineconomics, the years of double-digitgrowth are over and China is gropingtowards a new model, driven more bydomestic consumption than exports
lead-And in international affairs, the Xi erahas seen a move away from hide andbide towards a foreign policy that chal-lenges US dominance of the Asia-Pacificregion
The three big policy shifts have ent origins In economics, the old model
differ-of growth based on exports, high-rates
of investment and low wages could not
go on forever The sheer size of the nese economy, combined with risingcosts in China and slower growth in thewest, made change inevitable But theshift to a new model is perilous In theaftermath of the 2008 financial crisis,China launched an unsustainablesplurge of credit and investment thatcould yet culminate in a financial crisis
Chi-Even if that unpleasant fate isavoided, China still has to get used tolower rates of growth The party leader-ship used to encourage the idea thatChina had to grow at 8 per cent a year tomaintain social and political stability
dra-matic at the moment that
China can look relatively
staid and stable by
compari-son But that impression is
deceptive Xi Jinping is taking his
coun-try in radical and risky new directions
If the president’s new policies
suc-ceed, then the Xi era will be
remem-bered for the achievement of his
often-stated goal of the “great rejuvenation” of
the Chinese nation But if Mr Xi’s
experi-ments go wrong, then his legacy is likely
to be political turmoil, economic
stagna-tion and internastagna-tional confrontastagna-tion
What Mr Xi has done is essentially to
abandon the formula that has driven
China’s rise over the past 30 years That
formula was created by Deng Xiaoping,
after he came to power in late 1978, and
then refined by his successors It
con-sisted of three key ingredients —
politi-cal, economic and international
In economics, Deng and his
succes-sors emphasised exports, investment
and the quest for double-digit annual
growth In politics, China moved away
from the charismatic and dictatorial
model created by Mao Zedong and
towards a collective leadership And in
foreign affairs, China adopted a modest
Trang 14R aif Kuhirt’s mobile phone
buzzes with news: some of
his refugees have gone to
Berlin City Hall to protest
about the catering at his
shelter He rolls his eyes
“It’s always the same 10-15 people
who complain,” he says “Most of the
others are grateful they have a roof over
their heads.”
Fielding such calls is now part of Mr
Kuhirt’s daily routine His company, Die
Akzente-Sozial, runs three refugee
shel-ters in Berlin: the converted gyms house
530 people from as far afield as
Afghani-stan and Eritrea
Mr Kuhirt says he is a big fan of
Chan-cellor Angela Merkel’s open-door
refu-gee policy “It’s become my business,” he
says “I live from it, and so do all my
employees.”
The migrant crisis is the greatest
chal-lenge Germany has faced since
reunifi-cation Last year, more than a million
migrants entered the country, placing
an unprecedented strain on social
serv-ices and on local authorities tasked with
housing, feeding and integrating them
into German society
But for some, the crisis has been a
boon The bill for looking after
Ger-many’s refugees came to €20bn last
year, and much of that money is being
paid to private companies and
individu-als Purveyors of bedding and tents are
doing a roaring trade, as are caterers,
and construction companies and
related trades, building and servicing
houses for the new arrivals
The sudden influx has also profited
Germany’s propertied classes Owners
of warehouses, hangars, hotels, B & Bs
and hostels have quickly converted
them into shelters, as municipalities
across the country scramble to house
the huddled masses pitching up on their
doorstep
The crisis has also spawned a whole
new subspecies of entrepreneur — the
shelter manager Mr Kuhirt is one of
hundreds of businessmen who have
won contracts to run hostels Berlin’s
city government pays Die
Akzente-Sozial €25 per refugee per day, which
works out at nearly €5m a year — a
size-able revenue stream for a small
enter-prise
Yet it has its sights on a much bigger
prize Mr Kuhirt is bidding for contracts
to run the modular housing complexes
and container villages now springing up
across Germany, as refugees are
gradu-ally moved out of their ad hoc shelters
“From the start it was clear this could
turn into a serious business,” he says
“The only question was whether it was
just shortlived or something that had
real long-term prospects.”
Mr Kuhirt is a relatively small player
There are also big operators, such as
European Homecare, which houses
some 20,000 asylum-seekers in more
than 100 shelters across Germany The
company’s revenues increased from
€17m in 2013 to €100m in 2015
“We are the Aldi of the shelter
opera-tors,” says Klaus Kocks, a spokesperson
of new goals have to wade throughpsychomagnotheric slime to get there
Ghost structures and habits areparticularly persistent at establishedcompanies Whoever takes over atUniCredit will find some skeletons: theItalian banking group, which juststarted a search for a new chiefexecutive, goes back nearly sixcenturies and so, probably, do some ofthe ways it works But newer groupsalso need ghostbusters Twitter, whichcontinues to tinker with its hierarchyand misfiring, is a good example of acompany still spooked by the spiritthat first enlivened it Exorcists shouldalways be on standby at start-ups,where behaviour that seemed fresh inthe first phase of growth often reeks ofrecklessness by the second or thirdround of funding
Two big problems stand in the way ofghostfinders-general As leaders of theorganisation, they were often thechampions of the type of behaviourthat now holds it back “We’re askingthem to change the things that gotthem there in the first place,” saysJonathan Trevor of Oxford’s SạdBusiness School
The second related problem is thatoutmoded habits are often the sameones that knitted the old organisationtogether These informal frameworksare sometimes referred to as “truces” —
uneasy coalitions between feudingfactions, based on embedded routines
End the truce and you end the fragilepeace
“Habits become institutionalised: aset of routines, procedures and ruleswhich define us and give us identity,”
Sir Anthony Salz wrote in his 2013report into how Barclays’ businesspractices went bad “Everyone defendstheir identity.”
You do not have to look far to detectphantoms In the newspaper business,for all our headline devotion todigitalisation, we cling to the old jargon(sections, pages), defer to old titles,and show a near-pagan devotion to theold print day There is no real reasonwhy, as a columnist, I should be at mydesk as the first edition print deadlinenears, but here I almost always am
Pressing technological change makes
it even more urgent to know how toend the haunting A pre-internetepisode from Citigroup’s history showshow When John Reed, then chiefexecutive of the banking group, sought
to tackle a crisis in commercial realestate that took the company to thebrink of collapse, he needed severalgoes to make the changes that saved it
Despite the depth of the problem,mere exhortation did not work He had
to break the structure — by getting rid
of the three executives who oversawfiefdoms outside his control — anddestroy ingrained bad habits
To cut costs, for instance, hescrapped bonuses, but also forbadestaff from using cover sheets on faxes(this was the early 1990s, remember),told them to take taxis not limousines,
and started charging for canteen meals
The signal was clear As he put it in aprivate memo: “Much of this waste ishabit A style issue of ‘how we havegrown to run the place’ We needthe courage to change our ways andembrace them.”
Mr Reed opened his privatecorrespondence to Sarah Kaplan ofToronto’s Rotman management schoolfor a recent study She says anotherimportant way to kill off zombie habits
is to adjust internal incentives
The amount people are paid sendsone signal At Barclays, the Salz reviewfound that “pay contributed
significantly to a sense among a few[investment bankers] that they weresomehow unaffected by the ordinaryrules” More important, though, is tochange the stimuli that affectbehaviour At Citi, Prof Kaplan writes,
a new system of monthly meetings ofthe CEO, the line managers and theirteams “created acute incentives” toincrease sales and cut costs
As Prof Trevor has written, whetherthe strategy, purpose and structure ofcompanies are aligned often makes thedifference between a good organisationand a bad one Expunging phantasms isessential, but not enough Leaders alsoneed to make new truces, lest the deadhand of past behaviour strangles newways of working
andrew.hill@ft.com Twitter: @andrewtghill The writer is the author of a new book, Leadership in the Headlines: Insider Insights into How Leaders Lead.
Outmoded habits are often the same ones that knitted the old company together
an active ingredient ofantifreeze The haul back torespectability has been along one, but the country isbecoming known once morefor its excellent wines
There are few betterplaces to enjoy a glass incentral Vienna than the bar
of Zum Schwarzen Kameel, ashort walk from theimposing Hofburg palacecomplex
It is a Vienna institution,dating back to 1618, when itopened as a shop sellingexotic foods and spices,hence its evocative name,
“At the Black Camel” Its artnouveau look is more recent,
following a 1901 makeover.The bar at the frontbustles with a mixture ofsuits, tourists, and regularsenjoying wine, Illy coffeefrom Trieste and classicViennese open sandwichesmade to recipes devised 50years ago by the currentowner’s mother Heartierdishes are also available.Most of the bar is open,with drinkers and dinerssharing high counters,making for a convivialatmosphere, though the fewsmall booths are best suited
to more intimatediscussions It is locatedclose to the offices ofseveral of the internationalorganisations that cluster inVienna, as well as
Parliament and the stockexchange
Andrew MacDowall
Great place to meet
Zum Schwarzen Kameel
Where Bognergasse 5, 1010 Vienna WiFi Yes / Plug sockets: No (phones can be charged at the counter) Espresso €2.40 PrivacyAAEEE
Poor sleep has beenattracting a lot of attentionlately Not only does it affectyour cognitive performance
at work but chronicinsomnia has been linked insome studies to type 2diabetes and can affect yourperformance in endurancesports such as cycling
While just about everysports watch and wearablecan measure your basicsleep duration by recordingarm movements, innovativetechnology is beingproduced that makes iteasier to figure out whatyour specific sleep problemsare and help you get a goodnight’s rest Here are some
of the best
ResMed S+ This device sits
on your nightstand andrecords light, temperatureand sound to help pinpointwhether an overheatedbedroom or a snoringpartner is waking you It alsoprompts you to write aboutdifficult events from yourday to help reduce stressand plays sounds that syncwith your breathing, helpingyou drift off
I was surprised by thedetail that goes into theresulting sleep report, whichcan be printed and taken to
a doctor — and particularly
by the number of times Iwake during the nightwithout being aware of it
Withings Aura This
intelligent bedside clock,designed to look a bit like anold steamship funnel,connects to a long padplaced under the mattress
to measure sleep patterns
At night it bathes you in redlight and plays soothingsounds or your own Spotifyplaylist to help you drift off(“Stairway to Heaven” is notrecommended)
It rouses you with bluelight and gentle music whenyou are in a light sleepphase, making the wakingprocess less jarring
Night-time restlessnessand sleeplessness can oftenstem from underlying
anxiety or stress, which nowearable device can yeteliminate But there are acouple of tech products thatcan help and may be worthtrying:
Headspace.com This
smartphone app (paid bysubscription, but there is afree 10-day trial) is abeginner’s guide tomindfulness meditation.After the explanatoryopening sessions, there arespecial practices to helpreduce anxiety and improvesleep While you could findthe same information in abook, hearing Headspacefounder Andy Puddicombe’sthorough explanations canreally help still a racingmind
Fisher-Wallace Stimulator
For hardcore insomniacs,this is a more expensive,drug-free way to try toaddress any anxiety anddepression that may bekeeping you awake Thedevice uses cranial-electricalstimulation, a tiny currentthat passes between twoelectrodes that you place onyour head twice a day
It looks ridiculous whileyou wear it and takes abouttwo weeks to start having aneffect, but this FDA-cleareddevice is based on Russianresearch into “electrosleep”.There have been severalresearch studies showingthat the current is safe andeffective for insomnia If youhave regular insomnia, thismay be worth trying
Acoustic Sheep SleepPhones This cloth
band fits snugly around yourhead and contains two tinyspeakers connected byBluetooth to yoursmartphone or music player.Put your head on the pillowwithout the discomfort ofungainly headphones, andlet Ralph Vaughan Williams’
“Serenade to Music” (or
“Stairway to Heaven” if youmust) help you to nod off
fitexecutive@ft.com
The fit executive
Tech products that help you get a good night’s sleep
But some politicians think cial companies should not be operatinghostels, a job best left to charities andnon-profit organisations such as the RedCross
commer-Fabio Reinhardt, a member of Berlin’sparliamentary assembly from the alter-native Pirate Party, says the city govern-ment has dished out contracts to “prop-erty speculators who have no experi-ence of handling refugees”
In the summer of 2015, the city ernment began seeking out propertydevelopers with large empty buildingsand handed them contracts to operatethem as emergency shelters
gov-Big Berlin companies like PeWoBe,which already had experience housingrefugees from the Yugoslav wars of theearly 1990s and ethnic Germanmigrants from the former Soviet Union,quickly stepped in
But the contracts have come underintense scrutiny in recent months:
many of them were awarded withoutpublic tenders Berlin’s social affairsministry, known as LaGeSo, said it was
“inadvisable” to carry out tenders for
“emergency accommodation”: the mainpriority was ensuring people had a roofover their heads
That excuse has failed to convincecritics A recent report by the BerlinAudit Office, an official watchdog, intoLaGeSo described the way it handledcontracts for refugee accommodation as
“unlawful” “Shelters are put into tion before the contractual negotiationsare concluded and the price for accom-modation has been agreed,” it said
opera-Deals were often clinched with a shake, rather than a written contract
hand-Earlier this year one of LaGeSo’s cials was arrested on suspicion of taking
offi-bribes from a security company seekingcontracts to guard refugee shelters Dur-ing searches at the official’s flat, policeseized a car and €51,000 in cash
Meanwhile, questions have also beenraised about LaGeSo payments to pri-vate landlords to house asylum-seekers
A recent investigation by ZDF, the man TV channel, found the city waspaying one owner €5,200 a month for athree-room flat occupied by a Syrianfamily, in an area where the average rentwas €1,000 Meanwhile, one hotelierwas receiving €200 a night for a room
Ger-occupied by a family of five The normaltourist room rate was €75 a night
Mr Kuhirt’s career in the shelter agement business began last summerwhen he received a call from LaGeSo
man-Officials said they had requisitioned agym in one of Berlin’s central districtsand asked if he would take it on Beforethe day was out they had offered him asecond one He says he still has no offi-cial contract with the city
Within four hours, he and his teamhad converted the first gym into emer-gency accommodation, helped by anarmy of local volunteers, and the firstresidents had moved in Within days,security personnel had been hired and amanagement team installed
Conditions are spartan: the place feelslike a refugee encampment, with mainlyyoung men lying on bunk beds sepa-rated by improvised screens coveredwith sheets “It’s still just a gym, not adorm or a hostel,” Mr Kuhirt admits
“There’s little privacy: people are neveralone.” He tries to keep the noise leveldown at night by switching off the WiFi
Social workers and counsellors are onhand to deal with those residents suffer-ing from the after-effects of war andcivil strife Mr Kuhirt recently watched
a group of children at the gym playingwith clay: one of them made a small din-ghy, packed with people “I got goosebumps,” he says
Some critics say anyone trying toprofit from a humanitarian crisis isimmoral It’s an argument Mr Kuhirtrejects “No one goes into this line ofwork to make loads of money,” he says
“Margins are very tight.”
But this is an industry with a securefuture “In the next 5-10 years there arebound to be more refugee inflows,” hesays “There are always crises in theworld, so this business will always be indemand.”
Migrants bring in profitable new era for shelter providers
Guy Chazan meets the
entrepreneurs turning
Germany’s refugee crisis
into a lucrative business
opportunity
Crisis createsdemand, saysRaif Kuhirt,pictured heretalking torefugees in one
of the threeshelters he runs
in Berlin
Jan Zappner
Juergen Wowra is one of manybusinessmen for whom the refugeecrisis has created opportunities
His small company Paranet hasmade huge inflatable air domessince 1997, mainly used as logisticswarehouses, or to cover open-airswimming pools and tennis courts
But in 2013 the company wasapproached by the Berlin citygovernment to build a refuge forhomeless people during anunusually cold winter The followingyear Berlin ordered an emergencyshelter for refugees Soon, orderscame in from across Germany
The company has so far built 35domes for more than 10,000refugees Prices range from
€180,000 to €2m: caretakers,security, catering, cleaning,bedding, chairs and tables, lightingand power are all provided byParanet Mr Wowra says Paranetrevenues tripled to €6.2m in 2015compared with the previous year,and are expected to more thantriple this year, to €22m
Emergency cover
Germany’s migrants
€5m
Estimated revenue stream for the company, which is a relatively small player in the market