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Germany's Ph.D. Mania

Wall Street Journal (Opinion) - Mon, 02/11/2013 - 09:15
By Raymond Zhong Another resignation illustrates the darker consequences of the German obsession with doctorates

Sequester Scare-mongering

Wall Street Journal (Opinion) - Mon, 02/11/2013 - 09:15
By Stephen Moore Liberals insist that a 5% cut in domestic spending would be catastrophic.

Western tax avoidance hinders African development | Chris Jordan

The Guardian's Poverty Matters - Mon, 02/11/2013 - 09:12

Associated British Foods has spirited millions away from its sugar operations in Zambia, where two-thirds live in poverty

The litany of major multinational companies accused of tax avoidance has grown, with Associated British Foods – owners of brands ranging from Silver Spoon and Ryvita to Primark – added to the list including Vodafone, Starbucks, Barclays and Boots.

The one big difference is that this time ActionAid is not accusing the company of finding "clever" ways to shrink their British tax bills but those owed in Zambia, where two in three people live below the poverty line and 45% of children are malnourished.

The financial engineering performed by Associated British Food's Zambian sugar operations follow an all-too familiar pattern of tax liability reduction. Pre-tax profits of $123m generated since 2007 have been whisked away through the tax havens of Ireland, Mauritius, the Netherlands and Jersey, depriving Zambia of some $17.7m. That's enough to put 48,000 additional Zambian children in school a year.

Associated British Foods has responded with John Bason, ABF's chief financial officer, arguing: "I've looked really closely at this, and the payments made by the sugar business [to Ireland and Mauritius] are all for services provided and it is at cost." But it's odd then that the Irish accounts show profits of 26% on these huge "management fees". It's also not accidental that these fees are going to Ireland, which allows the company to exploit an abusive tax treaty preventing Zambia applying the normal 20% withholding tax levy on these transactions.

On top of these fairly standard tax avoidance schemes, the company also won a court case against the Zambian government, enabling it to exploit a tax break originally designed to support domestic farmers. This saw its tax rate tumble from 35% to just 10%, costing a further $9.3m of revenue. We estimate Zambia has lost $27m in total – a huge sum for one of the poorest countries in the world.

The sad thing is that African nations (just like the UK) desperately need the jobs and investment that big business, such as Associated British Foods, can provide. Yet the positive impact companies bring is massively undermined by systematic tax avoidance, which ultimately means fewer teachers and doctors can be employed, stunting development overall.

Like the independent British coffee shops and booksellers outraged by the lack of a level playing field when faced with the likes of Starbucks and Amazon, domestic Zambian businesses also suffer. ActionAid met market traders like Caroline Muchanga, who in some years has paid more business tax in Zambia – in absolute terms – than the giant multinational she lives next to, despite the fact that her children go to bed hungry at night.

While we believe that companies have a responsibility to shun aggressive and artificial tax practices, ultimately it's the rules of the game that have to change. Permissive international corporate tax rules were built for a bygone era and are simply not fit for purpose in today's globalised economy.

Leaders from India, South Africa, Argentina, Senegal and indeed Zambia have been calling for systemic change to fix a broken system and there's certainly been no shortage of handwringing rhetoric from UK politicians; from George Osborne telling us that tax avoidance was "morally repugnant", to David Cameron imploring big business to "wake up and smell the coffee" on the issue. Now it's time for the politicians to put their money where their mouths are.

Securing the visionary international agreements we need won't be easy, but there are signs that big breakthroughs are on the horizon. The US and EU have recently tabled legislation making extractive industries much more transparent about their financial contributions, though of course this will have no impact on a company like Associated British Foods. The US is twisting the arm of tax havens to eliminate the secrecy that enables tax avoidance and evasion to flourish unchecked.

This week, the G20 finance ministers will discuss new proposals on how to make transient multinationals pay their fair share, with Britain, France and Germany raising expectations of a breakthrough.

Cameron has already (and admirably) stuck his neck out by making tax and transparency priority issues as chair of the G8 this year. There are even rumours that he'll lead the way by forcing the 50% of tax havens with close constitutional links to the UK to break their culture of secrecy.

While these highwire political processes might seem a world away from Muchanga's market stall in Zambia, this year we have a golden opportunity to give her children a better future. It won't happen without a fight, so we need to keep the pressure up on our political leaders to deliver a fairer tax system for us all.

Chris Jordan
guardian.co.uk © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

ECB member warns against trying to weaken euro

Boston Globe (latest world news) - Mon, 02/11/2013 - 09:11
FRANKFURT, Germany (AP) — A member of the European Central Bank's governing council has warned that any government attempts to push the euro lower could backfire.

Vatican: Health problems not why pope is resigning

Boston Globe (latest world news) - Mon, 02/11/2013 - 09:11
LONDON (AP) — When he became pope at age 78, Benedict XVI was already the oldest pontiff elected in nearly 300 years. He's now 85, and in recent years he has slowed down significantly, cutting back his foreign travel and limiting his audiences.

Aid agencies face violence and arrests in South Sudan

AlertNet (News Desk) - Mon, 02/11/2013 - 09:04
Country head of the U.N. Office for the Coordination of Humanitarian Affairs says number of incidents hampering the work of aid agencies has jumped almost 50 percent last year

Using Aritificial Intelligence (And A Little Scolding) To Reduce Energy Use

Fast Company's Co.Exist - Mon, 02/11/2013 - 09:00

Turn your thermostat down, Dave. A new program in England looks at your energy use and then offers you suggestions on how to reduce it to save money (and emissions).

Houses and other dwellings account for nearly a third of all the energy used in the United Kingdom (in the U.S. it’s a bit lower). That takes a toll on the climate and on people’s wallets. What’s worse is that much of that energy is wasted because residents don’t see an immediate connection between the thermostat, for example, and the utility bill.

Nigel Goddard, a professor at the University of Edinburgh’s School of Informatics, is trying to solve that problem using cutting-edge techniques from a branch of artificial intelligence called “machine learning.”

In the multi-year IDEAL project, launching in 2013, Goddard and his colleagues will outfit hundreds of British homes with relatively inexpensive sensors that monitor temperature, humidity, and light levels, as well as gas and electricity use, and wirelessly report their readings every minute. Using machine learning techniques, Goddard and his team will be able to analyze that noisy data to infer what people are actually doing--cooking or taking a shower, for example.

Then they’ll use another cutting-edge technology--natural language synthesis--to generate automatic text messages that give people feedback about their energy use. A text message might read, “Last week you spent £10 on hot water for showers, if you reduced your average shower time from 15 minutes to 12 minutes you could save £100 per year.” Over time, they can tweak the kinds of messages they send to make them as effective as possible.

How much energy will people end up saving with this kind of feedback? Goddard expects the results to vary based on a home’s income level, among other factors, but says that “in the best groups I would estimate 20%, possibly a bit more--but its a wild guess.”

The money saved with an energy reduction of 20% could pay for the roughly $800 sensor set within as little as two or three years. And that’s what makes this project so interesting. If it works, it could scale quickly. “It could be offered by utilities or energy service companies, perhaps they install the kit for free and take a percentage of savings,” says Goddard.

I, for one, welcome our new energy-conscious robot overlords.

Using Artificial Intelligence (And A Little Scolding) To Reduce Energy Use

Fast Company - Mon, 02/11/2013 - 09:00

Turn your thermostat down, Dave. A new program in England looks at your energy use and then offers you suggestions on how to reduce it to save money (and emissions).

Houses and other dwellings account for nearly a third of all the energy used in the United Kingdom (in the U.S. it’s a bit lower). That takes a toll on the climate and on people’s wallets. What’s worse is that much of that energy is wasted because residents don’t see an immediate connection between the thermostat, for example, and the utility bill.

Nigel Goddard, a professor at the University of Edinburgh’s School of Informatics, is trying to solve that problem using cutting-edge techniques from a branch of artificial intelligence called “machine learning.”

Read Full Story

Lurpak’s Got A Perfect Message For Cold Winter Days

Fast Company - Mon, 02/11/2013 - 09:00

You don’t win friends (or build civilizations) with salad.

"Mankind wasn’t built on just baby leaf salad."

Thus speaks Rutger Hauer in the latest lip-smacking celebration of food from Lurpak. As we’ve noted here, repeatedly, the Euro butter brand has an inimitable way of using gorgeously, lovingly shot scenes of food and food prep to make us not only want to eat, but to cook.

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The Appraisal: Paying Top Dollar for Condos, and Leaving Them Empty

New York Times (Front Page) - Mon, 02/11/2013 - 09:00
The higher up you go in price in the New York City market, the more owners who spend most of their time elsewhere, leaving expensive buildings mostly dark and lonesome.

Christians surprised at pope's decision to retire

Boston Globe (latest world news) - Mon, 02/11/2013 - 08:56
KRAKOW, Poland (AP) — Shock, sadness and declarations of faith met Pope Benedict XVI's announcement Monday that he would retire Feb. 28. Here's a look at reaction from around the world:

Building Resilience Against Vulnerability

Accion - Center for Financial Inclusion - Mon, 02/11/2013 - 08:55

> Posted by Larry Reed, Director, Microcredit Summit Campaign

On February 5, the Microcredit Summit Campaign released Vulnerability: The State of the Microcredit Summit Campaign Report, 2013 by announcing that in 2011, 13 million fewer of the world’s poorest families received access to microcredit and other financial services than in 2010. This is the first time since 1998, when the Campaign began tracking this data, that the total number of clients and the number of poorest families reached have declined. We found in our data that the total number of clients fell from 205 million to 195 million and the sub-set of families living in extreme poverty, defined as less than $1.25 a day, fell from 137 million to 124 million. (Visit the report website to learn more.)

I presented the report at a launch event at Busboys and Poets in Washington, D.C., and Susy Cheston (Senior Advisor at the Center for Financial Inclusion at Accion) moderated a lively discussion with my co-panelists Wendy Abt (Deputy Assistant Administrator, USAID), David Roodman (Senior Fellow, Center for Global Development), and Alexia Latortue (Deputy CEO, CGAP). Not surprisingly, the most salient exchange of the panel arose with David in the role of provocateur.

Challenging the Campaign, he contrasted simple but powerful messages that communicate well to the mass public—“microcredit can help people lift themselves out of poverty”—to more nuanced messages that better communicate reality but are harder to condense into a soundbite. Many of us are trying to figure out how to convey the nuanced message that “a range of financial services, when combined with other important development services, may provide tools that people can use to move away from poverty.” David asked whether, after seeing the results of unchecked growth in Andhra Pradesh, the Campaign wanted to rethink its goal-setting role.

Wendy spoke up in favor of facing difficult realities—even when this caused problems in communicating to the public. In her experience, asking the hard questions has led to a much richer set of answers, and then to real progress on the problems we seek to address. She said that this is the approach that USAID is now taking as it examines the results its programs achieve over time.

My own response to David’s question was that the Campaign has been shifting priorities from an emphasis on total numbers (our first goal of reaching 175 million clients) to outcomes (our second goal of helping 100 million clients and their families lift themselves out of severe poverty). We find that those microfinance providers that track their clients’ poverty levels over time soon develop a robust set of products and services that help clients address the vulnerabilities they face, and we highlight some of these in the report.

David prodded one more time. He noted our report’s discussion of the promise of mobile technology to reduce the costs of financial transactions for the poor, as well as our coverage of Fonkoze in Haiti and Bandhan in India, two of the programs in the CGAP-Ford Graduation Program research on working with the ultra poor. He posed these two examples as alternative ways of reaching the goals of the Campaign and thought he detected a subtle bias in the report in favor of the graduation programs. He argued in favor of mobile technology being the true heir to microfinance and the means by which we realize the vision of microfinance’s founders. (David recently wrote a blog post on the report, here.)

Alexia quickly jumped in to challenge what she saw as a completely false dichotomy. Graduation programs and mobile technology are simply two very different things that cannot be usefully compared. She thought that if governments were to take and scale up graduation programs, spending more up front than they are presently with social protection programs, maybe some of the most difficult to reach 5-8 percent of the population would actually graduate from extreme poverty and no longer need permanent government transfer payments. At the same time, mobile phones could help lower the costs of these programs if people could, for example, save using the mobile phone. There is no reason that we cannot not use both methods together to accomplish our goals.

The conversation served as a reminder of where we stand now as an industry: acknowledging the limits and dangers of growing too far and too fast with traditional products but anticipating breakthroughs with new technologies and targeted products that help those in poverty to build resilience against the vulnerabilities they face.

The Microcredit Summit Campaign will continue this dialogue about resiliency with a webinar February 27, 2013 on vulnerability and social capital, organized with the Sustainable Microenterprise and Development Program, a professional training program at the University of New Hampshire. Click here to learn more about the webinar, or contact Sabina Rogers (rogers@microcreditsummit.org).

Larry Reed is the director of the Microcredit Summit Campaign. He has worked for more than 25 years in designing, supporting and leading activities and organizations that empower poor people to transform their lives and their communities. For most of that time Reed worked with Opportunity International, including five years as their Africa Regional Director and eight years as the first CEO of the Opportunity International Network. Reed has taught at the Boulder Institute of Microfinance for 15 years, served as the chair of the SEEP Network, and consulted with industry-wide initiatives like the Smart Campaign for Client Protection and MicroFinance Transparency.

Image credit: Microcredit Summit Campaign

Have you read?

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Who Needs Financial Education?

Filed under: Center for Financial Inclusion, Client Focus, Events, Financial Inclusion, Microfinance Tagged: Alexia Latortue, Bandhan, Center for Global Development, CGAP, CGAP-Ford Graduation Program, David Roodman, Fonkoze, Haiti, India, Microcredit, Microcredit Summit Campaign, Microfinance, Mobile, Susy Cheston, USAID, Wendy Abt

Romania: Slaughterhouses did not commit fraud

Boston Globe (latest world news) - Mon, 02/11/2013 - 08:53
BUCHAREST, Romania (AP) — Two Romanian plants believed to be the source of horsemeat mislabeled as beef in supermarkets across Europe declared it properly and any fraud was committed somewhere else down the line, officials said Monday.

Egypt protests on anniversary of Mubarak ouster

Boston Globe (latest world news) - Mon, 02/11/2013 - 08:52
CAIRO (AP) — Masked men briefly blocked trains at a central Cairo subway station Monday as Egyptians commemorated the second anniversary of autocrat Hosni Mubarak's ouster with angry protests directed at his elected successor.

EU CO2 fix failure may hit UN climate aid plan - negotiators

AlertNet (News Desk) - Mon, 02/11/2013 - 08:50
Hopes are fading that carbon markets could raise large amounts of money to help poor nations deal with climate change

East Africa: Tanzania, Kenya Ports Move to Cut Congestion

All Africa (Business) - Mon, 02/11/2013 - 08:49
[EA Business]Dar es Salaam -The Tanzania Ports Authority (TPA) and Kenya Ports Authority (KPA) are weighing a partnership that will address congestion at their principal ports, as well as to foster clearing of cargos and speed up the East African region's economies.

Benedict XVI and the Perks of Being an Ex-Pope

Newsweek (World News) - Mon, 02/11/2013 - 08:46
With his early exit, Benedict may salvage an uncertain legacy.

Matthew Barney Creates A Skateboard That Doubles As A Pencil

Fast Company - Mon, 02/11/2013 - 08:45

Barney’s 19th Drawing Restraint was tested out by the legendary Lance Mountain last fall.

Matthew Barney and Lance Mountain walk into a skatepark.

It sounds like the setup to a joke, but it’s actually a very real scenario that took place last fall at Ride It Sculpture Park in Detroit. Skateboard legend Mountain was in Detroit to be the first person to ride a graphite-tipped skateboard that Barney had donated to the local skate park, the 19th iteration of Drawing Restraint, a series he’s worked on for 25 years.

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East Africa: Region Urged to Ease Monetary Policies

All Africa (Business) - Mon, 02/11/2013 - 08:42
[EA Business]Kampala -A World Bank report has warned the region on monetary policies saying they would cause the region to grow at its pre-crisis average of five percent during the 2013-15 periods.


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