American homeowners could have recently had $5.4 billion more in their pockets. However, they don’t because they failed to refinance their mortgages when they should have, according to a new study published in the Journal of Financial Economics.

The study, coauthored by BYU economics professor Jaren Pope, found that when interest rates dropped, 20 percent of homeowners who could have benefited from refinancing didn’t. In effect, they instead opted to pay thousands of dollars more than necessary over the life of the loan.

“There’s a potential problem when one out of five homeowners is paying more than they should,” Pope said. “Buying a house initially is a big financial decision. But it’s also financially a big deal to refinance when it’s optimal to do so.”

The researchers obtained a nationally-representative sample of 1 million mortgages from December 2010. This data set included essential information on the loans, like interest rates and payment history, which allowed them to make reasonable conclusions about which homeowners should and shouldn’t refinance to determine that 20 percent of homeowners who should have refinanced in 2010 didn’t.

Their model also considered other factors that might affect the decision, like the impact of closing costs, uncertainty about future interest rates and likelihood of moving to a new home. Even with these conservative assumptions, the median household stood to save $1,920 per year by refinancing.

But the research didn’t finish there. Interest rates continued to drop in the following years, so the authors reexamined the same loan data in 2012. They found that at this point, 40 percent of the original 20 percent who chose not to refinance in 2010 still hadn’t refinanced two years later.

“The question we had to ask at this point was why,” Pope stated. “Why aren’t people taking advantage of the thousands of dollars they could be saving?”

To answer this question, Pope and the researchers teamed up with a nonprofit group in Chicago to offer homeowners the chance to refinance and make the process as easy as possible. The nonprofit sent three waves of letters to qualifying homeowners, offering a pre-approved refinance with help along the way and zero up-front costs and help along the way.

More than 84 percent of people didn’t respond to the letters.

Results from a survey of homeowners who received the nonprofit’s letters suggested that a quarter of the recipients didn’t even open them. For the people who did open the letters, a third intended to move forward and refinance, but never got around to it.

“Through the nonprofit, we offered homeowners the best-case scenario for refinancing,” Pope said. “But there seems to be a whole host of behaviors like inattention and procrastination that are preventing people from taking the time now to receive long-term benefits.”

In the initial study, they found that the homeowners who failed to refinance tended to be less educated and less wealthy — the very people who could benefit most from saving.

“It’s not that people with less education don’t want to or know how to refinance, it just seems that refinancing isn’t the top priority when getting by is,” Pope said. “If you’re lower-income and you’re just struggling to make ends meet, you have even less time to pay attention to your mail.”

Despite the missed savings in 2010 and 2012, homeowners haven’t missed their chance to reap the savings benefits of refinancing — rates are still low.

“A very simple and conservative approach to deciding when to refinance would be to go ahead and refinance any time you can get a better interest rate for a ‘no cost’ refinance where the mortgage lender pays all closing costs,” Pope said. “Of course in general, there may be other factors to consider, like the offered interest rate when closing costs are not included and the amount of time left on the existing loan’s term that can influence the optimal timing for a refinance. When you learn that interest rates have come down, a couple of phone calls or internet searches may help to determine if a refinance would help put extra money in your pocket each month.”

Engineers from the University of Luxembourg are working together with scientists from the WSL Institute for Snow and Avalanche Research SLF in Switzerland to better analyse mechanical properties of snow.

The project has the goal to develop a computer model that can help solving typical snow-related engineering problems. The model could, for example, be used to anticipate avalanches, to determine the load on buildings caused by snow or calculate the traction of vehicles on snow-covered surfaces by predicting the behaviour of snow.

After having studied various flood scenarios, developed an innovative mathematical method to simulate the flow of debris and predicted its mechanical impact on buildings and structures, Bernhard Peters, professor of Thermo- and Fluiddynamics and head of the LuXDEM research team at the Faculty of Science, Technology and Communication (FSTC), has extended his research activities to snow simulations.

Prof. Peters with his research team are now developing a model that calculates the properties and behaviour of snow masses under high and low strain rates based on the structure of microscopic snow particles.

“Such a model has several advantages compared to traditional snow models. First, our model can directly factor in microstructural information. Second, it includes contacts and bonding between the snow grains. Third, it can explicitly account for the large displacements and rearrangement of the snow grains during deformation. Hence, this particle model explicitly includes all the relevant physical micro-scale processes”, explained Bernhard Peters.

In order to validate this new model, Professor Peters involved field experts from one of the world-renowned institutes in snow research, namely the WSL Institute for Snow and Avalanche Research SLF, based in Davos Dorf, Switzerland.

“The project combines complementary expertise of the two involved research groups with Luxembourg being an expert in discrete element modelling and Switzerland in the tomographic investigation and experimental measurement of snow characteristics”, added Prof. Peters.

The bi-national project was officially launched at a kick-off meeting on 8 December 2016 and is funded by the Fond National de la Recherche Luxembourg (FNR) and the Swiss National Science Foundation (SNSF) for a period of 3 years.

A new app helps drivers decide if switching from a petrol-driven car to an electric car is a viable solution for them – and which vehicle model would be best suited to their individual requirements. It was developed by engineers at Ruhr-Universität Bochum under the auspices of Prof Dr Constantinos Sourkounis.

Using the smartphone app, drivers can record their typical routes while, for instance, using their petrol-driven car. Based on the gathered data, the program generates a list of vehicle models that would meet the driver’s requirements, for example cars with sufficient range. Information pertaining to cost saving can also be provided.

The multilingual app for the smartphone operating system Android is available for download at elektromobilitaet.rub.de. A limited version is free of charge; the complete version costs 1.50 euros. The complete version, moreover, will be supplied on request to representatives of the media for a testing period of 20 days.

Optional individual configuration

Philip Dost developed the app together with Master’s student Christoph Degner at the Institute for Power Systems Technology and Power Mechatronics headed by Constantinos Sourkounis. “The app has been designed to enable both interested parties and sceptics to figure out if an electric vehicle or a hybrid car would work for them,” says Philip Dost, who was in charge of the project. “Moreover, users could also use it to find out if an e-car sharing scheme in their neighbourhood might be sufficient to meet their requirements.”

The app records GPS data and acceleration while driving. Users can then decide which routes are to be included in the analysis: for example only the way to work, but not the weekend trip with the family, where a different car might be used. They start the program when they set off and stop it once they have arrived at their destination. They can also indicate the locations of charging stations along the route. Other requirements, such as the number of potential passengers or luggage capacity, can likewise be specified. Users have also the option to state if they intend to operate the vehicle in cold weather or just in mild weather.

Sortable list

Subsequently, users select the data from the recorded database that are to be entered into the analysis. As a result, they receive a list of vehicles most suitable for handling the assessed routes. That list contains not just electric vehicles, but also plug-in hybrids and range extenders that switch over to petrol once the battery has run out. It can be sorted according to different criteria, including running costs or purchase price.

If required, the app provides statistics for each suitable vehicle model. A chart visualises, for example, the potential energy consumption of the selected electric vehicle on the respective routes. Thus, users can see how much buffer they would have before the battery runs out.

Calculating cost advantages

The app also estimates consumption costs compared to the vehicle currently in use. In order to achieve this goal, users have to enter energy and petrol prices as well as their current car’s fuel consumption. Based on this information, the app calculates how much lower or higher the cost generated by an electric car would be on the same routes.

The program accesses a databank at the Institute for Power Systems Technology and Power Mechatronics in Bochum. The researchers update this database routinely, for example by adding vehicles recently released to the market or by removing models that are no longer available. “The app includes vehicles that are no longer manufactured as long as they are still available for purchase in the second-hand market,” explains Dost. “They are labelled accordingly.”

Also available as web application

People who do not own an Android smartphone or cannot record trips while using a car can access a simplified version of the service online. There, users can enter typical route data to generate information similar to those supplied by the app. Programmed by Rania Kontopoulou as part of an institute project, the web application is likewise available free of charge at elektromobilitaet.rub.de.

Both analysis tools, i.e. the web application and the smartphone app, were developed in the course of the “Evaluation” Project, in which Philipp Spichartz was likewise involved. The team from the Institute for Power Systems Technology and Power Mechatronics implemented the project without any third-party funds. The idea originated in the course of a previous project dealing with the suitability of electromobility for daily use.

As people get older, they experience changes in their foot morphology. If they do not change their shoe size along with these transformations, older people – most of whom choose the wrong shoes – suffer, among other things, anxiety, apathy, loss of balance and falls, according to a study by the University of A Coruña.

In 2015, a research team led by the University of A Coruña conducted a study with people with a mean age of 80 years. In it, they analyzed whether the changes to foot morphology that occur in elderly individuals, and their tolerance for pain, led to them using the wrong shoes. They concluded that the majority (83%) did not use the correct size and that, on occasions, they should have been using a different size for each foot.

As Daniel López López, a scientist at the University of A Coruña who led this study, tells SINC: “In this stage of life there are changes in foot morphology involving increased width and length, as well as changes in pain tolerance, linked to age, and the loss of muscle mass and fatty tissue on the feet.”

A new study led by López has for the first time analyzed the consequences of this poor shoe choice on the health of elderly individuals.

“Because of people’s lifestyles at this age, they can use shoes that are harmful to their feet. This, combined with the appearance of chronic diseases such as obesity, vascular diseases, diabetes or rheumatoid arthritis, causes a worrying increase in foot problems in elderly people of between 71% and 87%. This means having to seek medical and podiatric attention more frequently, as it affects their functional capacity and quality of life,” the scientist explained. The study is published in the Revista da Associação Médica Brasileira (the Brazilian Medical Association’s journal).

Decreased independence and wellbeing

The participants in this research project were volunteers from the Podiatry University Clinic at the University of A Coruña with a mean age of 75 years.

Their results demonstrate that elderly people who use the wrong shoes have a lower quality of life in all areas related to pain, foot function, footwear, food health, general health, physical activity, social capacity and vitality.

The most common disorders are foot bone deformities, bunions, toenail malformations, plantar keratosis and flat feet. “This often leads to chronic pain, infections, limited mobility when walking, anxiety, apathy, social disturbances, changes to pressure distribution in feet related to loss of balance and falls, which as a result negatively impact upon health, independence and well-being,” López said.

These individuals should use proper footwear, in other words generally wide-fit shoes, adjustable using velcro or straps, rubber soles to prevent slipping and falling and, in turn, reduce the impact on joints and pressure when walking.

“Additionally, regular visits and monitoring on the part of a podiatrist helps to prevent, control and reduce the appearance of foot diseases and deformities, increase autonomy and, in summary, improve people’s quality of life,” López said.

The Trump administration announced Monday its support for an additional 54 billion dollars in spending for military and national security programs in fiscal year 2018 and a 30 billion dollar bump for such spending in fiscal year 2017. Meanwhile, 54 billion dollars in spending decreases in other areas in fiscal year 2018 are being put forward as an offset.

The story the White House is promoting is that, because of the offsetting cuts, the 54 billion dollars in additional spending will not increase United States government spending in the first fiscal year of Donald Trump’s presidency over the amount of Obama administration spending. This story is likely fiction, not reality.

You can count on Trump to determinedly stand by his desired military and national security spending goals, as well as his spending goals for other areas where he has pledged expansive US government actions, such as infrastructure and law and order. But, there seems to be little reason for confidence that Trump, who sees himself as a great dealmaker, won’t deal away much of his proposed cuts and even agree to various new increases in spending to ensure that his preferred additional spending receives congressional approval.

It will likely take significant dealmaking to push through Congress as large of a military spending increase as Trump proposes, even with Republican majorities in the House of Representatives and Senate. For some perspective on what $54 billion in additional military spending means, Alex Emmons notes at The Intercept that the “increase alone is roughly the size of the entire annual military budget of the United Kingdom, the fifth-largest spending country, and it’s more than 80 percent of Russia’s entire military budget in 2015.” Expect even “pro-military conservatives” in congress to jump at the opportunity to toss some money for their own pet projects into the spending pot once the legislative bargaining is underway.

Interviewed Tuesday at Fox News, Trump indicated that, despite the rhetoric coming from the White House, he is looking elsewhere than government spending cuts to pay for his desired increase in military spending. Asked where he will find the money to pay for the increase, Trump said that at least some of the money “is going to come from a revved up economy.” Trump elaborates:

I mean, you look at the kind of numbers we’re doing, we were probably [gross domestic product (GDP)] of a little more than one percent. And, if I can get that up to three or maybe more, we have a whole different ballgame — it’s a whole different ballgame. And that’s what we’re looking to do.

There you have it. Trump knows that the additional military spending will cause overall spending to increase, and he is looking to increased economic growth in America to create extra tax payments to the US government to pay for the spending increase. First, it is important to note that this funding explanation is a very different story than the prediction of no net increase in spending that accompanied the 54 billion dollars announcement. Second, this funding explanation means an increase in tax payments overall to the US government. Third, this funding explanation is hitched to achieving nearly a tripling or more of GDP. Suppose that does not occur. Suppose GDP does not budge much, or suppose GDP decreases. This budgeting depends on faith, not reason.

While the proposed 54 billion dollars in additional military spending is a very large sum, it is significantly less than the ten percent increase of US military spending that it is often described as in the media. US military spending includes much more than the money appropriated by Congress to the Department of Defense. As College of William & Mary Professor and Ron Paul Institute Academic Board Member Lawrence Wilkerson explained in a Monday the Real News Network interview, there is “really, a 1.1 or [1.2] trillion dollar national security budget, when you throw in nuclear weapons, the Department of Energy, the [Department of Veterans Affairs], and all the rest of the security budget in there.” Wilkerson continues:

It’s just ridiculous. We have a bigger national security budget than the rest of the world combined. It’s absurd.

As I mentioned in a December 31 interview at KFAR radio in Fairbanks, Alaska, we have been through such spending dealmaking before — when Ronald Reagan was president in the 1980s. I predicted that, similar to what happened then, the result this time will be a “compromise” of “increasing spending across-the-board.”

Sheldon L. Richman related in a 1988 Ludwig von Mises Institute article that spending during the Reagan administration rose 60 percent in nominal terms and rose more in relation to “national income” than during the preceding Carter and Ford administrations. This occurred in part because President Reagan, in order to secure the spending he sought for programs including the military, was willing to accept spending increases in areas where he said he preferred spending decreases. For example, Richman notes that, during Reagan’s presidency, spending on the Department of Education more than doubled despite Reagan’s support for abolishing the department.

Of course, many people will complain that the Trump administration’s proposed balancing of spending increases and cuts leaves spending too high, as there are many more places where US government spending should be reduced than Trump will endorse.

Indeed, Ron Paul has often argued that military and national security spending are among the areas where large spending reductions are in order. In support of this argument, the libertarian communicator and former presidential candidate points to the difference between military spending and defense spending. Military spending, Paul explained in a November editorial, includes “money spent each year not to defend the United States, but to enrich the military-industrial complex, benefit special interests, regime-change countries overseas, maintain a global US military empire, and provide defense to favored allies.” Beyond the death and destruction overseas, as well as the blowback in America, that such spending can induce, Paul notes in the editorial that the spending contributes to the threat of “economic collapse” in America.

In contrast to military spending, there is actual defense spending that would cost much less in terms of dollars and avoid the additional costs of lives lost and property destroyed in offensive military actions. Adopting a defense budget, instead of a military budget, would also seem to be in line with Trump’s campaign slogan of putting “America First” — a slogan that was employed decades earlier by opponents of sending the US military to war overseas.

Yet, there is little indication that the Trump administration has any intention of moving toward a foreign policy centered on nonintervention. The Trump administration has not begun any large-scale reduction of the US military presence in Afghanistan, the Middle East, Africa, or elsewhere. Neither has the Trump administration backed off from Trump’s support for taking a more adversarial position toward Iran. Even in one area where many people had hope for reduced tension — US relations with Russia — the Trump administration is continuing the Obama administration’s confrontation policy via the deployment of US troops near Russia.

The Trump administration seems devout in its support for increasing military spending. If this goal cannot be accomplished easily along with the adopting of balancing spending cuts in other areas, expect the bargaining to begin. Expect also that any significant effort by the administration to achieve the no net increase in spending goal will vanish.

This article was published by RonPaul Institute.

By Emanuel L. Paparella, Ph.D.*

When I was in college in the 60s I took a required course in American Government. It had chapters on Federalism, the Constitution, Checks and Balances, the Three Equal Branches of Government, the demarcation, separation and balancing of power.

As I studied those traditional institutions of the American polity called the United States, so different in many respects from those of other countries and therefore so exemplary to other democracies, I took it for granted that in the future they would remain part of its identity as a nation. Sadly, I am no longer confident that such is and will continue to be the case. Those institutions seem outdated now. What we have around today are “alternate facts.”

What I found intriguing in the formation of this unique form of government, was that the greatest power, taxation, spending, decisions on war, confirmation of members of the President’s Cabinet and justices of the Supreme Court was not located in the White House, the executive branch, but in Congress. Yes, the new nation was a republic, but most importantly, it was also a democracy. The American people, choose who does the governing.

In other words, a parliamentary system wherein legislative and executive powers were joined, had been definitely rejected. Ultimately it is the people, and not the parties, that rule.

All of the above might still have been largely true in the 60s, but one wonders now if it’s still accurate. It is apparent by the fanfare with which a pompous egomaniacal president signs his plethora of executive orders, that the presidency is a centrifuge sucking power from Congress and the sovereign states constituting the confederacy. Those executive orders and regulations have all the semblance of law, but it is only a semblance.

To some extent this state of affairs also exists in the Supreme Court which has held that on most policy questions, statute trumps fiat. The implication seems to be that Congress ought to subordinate its constitutional duties to political concerns.

Congress has steadily abandoned its constitutional responsibilities and its ability to serve as a check on the executive. Consequently, rather than a horizontal structure as intended by the founding fathers, we have ended up with a vertical pyramid with the President sitting on top.

The problem today is that on both sides of the fence Republicans and Democrats in Congress think of themselves not as a separate branch of government, but as messengers of their political parties.

Congress dropped the ball, so to speak, when it attempted to reassert its authority on the declaration of wars, which, as the Constitution prescribes, only Congress can initiate. It tried to mitigate presidential overreach when in 1973 via the War Powers Act they provided that Congress could step in in a presidentially initiated conflict within 60 days of its inception. It is doubtful that any Congress would interrupt a war and abandon troops engaged abroad. In effect Congress abdicated its function of people’s representative by leaving presidents free to initiate conflicts.

Moreover, Congress, who holds the power of the purse, now allows presidents to first submit their proposed federal budgets before even beginning serious discussions about spending decisions.

The judiciary is till theoretically and constitutionally separate from the other two branches, but the fact is that both Republicans and Democrats vies the federal courts, including the Supreme Court, not as an arbiter, but as a branch of the legislature. What seems to be uppermost on those who have to approve nominees is how he/she will rule on controversial political questions. There now in place a litmus test for any potential court nominee. The question is not whether or not the nominee is qualified to function judicially, but whether or not he is a liberal or a conservative. A Supreme Court nominee is viewed as another vote in the Senate.

So, what do we have today of the separation of powers? Basically this: the separation is no longer between the three constitutionally created branches of government but between a branch which consists of the president and his supporters in Congress and on the federal bench, and a branch made up of the opposition party, opposition to the president, those who oppose him in Congress and their co-partisans on the bench. It is beginning to look like a war between fiercely competitive political clubs.

In his Leviathan, Hobbes declares that one of the functions of governments is that of preventing abuses of the weak by the powerful of this world. Machiavelli makes a similar point. What the US founding fathers point out, however, via the Declaration of Independence and the Constitution is that governments too need to be prevented from committing abuses; hence the necessary divisions of authority between the states and central government, and between the branches of the federal government.

The question arises: are we teaching today’s students the same system of government taught in the 60s, the one conceived by the founding fathers? Or, is it a failed system no longer corresponding to the present reality? If that is the case, ought we not be making them aware of that unfortunate fact, at the risk of teaching them an alternate reality with alternate facts?

About the author:
Professor Paparella has earned a Ph.D. in Italian Humanism, with a dissertation on the philosopher of history Giambattista Vico, from Yale University. He is a scholar interested in current relevant philosophical, political and cultural issues; the author of numerous essays and books on the EU cultural identity among which A New Europe in search of its Soul, and Europa: An Idea and a Journey. Presently he teaches philosophy and humanities at Barry University, Miami, Florida. He is a prolific writer and has written hundreds of essays for both traditional academic and on-line magazines among which Metanexus and Ovi. One of his current works in progress is a book dealing with the issue of cultural identity within the phenomenon of “the neo-immigrant” exhibited by an international global economy strong on positivism and utilitarianism and weak on humanism and ideals.

Source:
This article was published by Modern Diplomacy.

By Nick Cunningham

U.S. oil inventories are at record levels, but there are a few glimmers of hope that the glut could be starting to subside.

Storing crude oil for sale at a later date is no longer profitable, as the futures curve has flattened out in recent weeks, depriving traders of a strategy that has served them well over the past few years. The market “contango,” in which front-month oil contracts trade at a discount to oil futures six months or a year out, has all but vanished. The differential must be large enough to cover the cost of storage, and for many time spreads that is no longer the case. After three years of a steep contango, storing oil simply to take advantage of the time spreads is increasingly uneconomical.

One of the more expensive forms of storage is floating on tankers at sea, and because of the narrowing contango, floating storage is unprofitable today. Reuters reports that traders are beginning to unload crude from floating storage along the Gulf Coast. “Right now, traders aren’t incentivized (to store),” Sandy Fielden, director of oil and products research at Morningstar, told Reuters in an interview. “It won’t all stampede out of the gate, but inventory levels will come down. What will happen is that some of it will go to refineries, but a fair amount will be exported too.”

Just as the rapid rise of floating storage in 2015 and 2016 was a sign of the deepening global supply imbalance, draining tankers of stored oil is an early sign that the supply glut is receding.

So far, it is only the most expensive storage facilities that are seeing drawdowns – the U.S. on the whole has seen crude stocks swell to record highs. But oil analysts argue that the surge in crude inventories is a symptom of stepped up imports booked at the end of 2016, when OPEC members pumped out huge volumes of crude just ahead of implementation of their deal to cut production. After a few weeks of transit time, the extra supply started showing up in U.S. storage data in January and February. In other words, the stock builds could be a temporary anomaly.

More recently, the time spreads for Brent futures also indicate increasing tightness in the market. John Kemp of Reuters notes that the spread between futures between April and May has sharply narrowed this month, meaning that the market is betting on a supply deficit as we move into the second quarter. The spreads for May-June and June-July are even smaller, trading at a few cents per barrel. This is a complicated way of saying that there isn’t a way to make money by buying oil, paying for storage, and selling it at a later date.

In a separate report, Reuters notes that inventories are also starting to drawdown in Asia, adding further evidence that the glut is not as bad as feared. As OPEC has throttled back on production, Asia is starting to see the impact. Reuters says that unusually large drawdowns took place across key oil hubs in Asia – 6.8 million barrels of oil were withdrawn from tanker storage off of Malaysia’s coast while Singapore saw a 4.1 million barrel decline and Indonesia’s storage fell by 1.2 million barrels.

“Dancing contango is now not a profitable thing to do, so we’ve sold out,” an oil trading manager told Reuters. The trader no longer stores oil on tankers because of the disappearing contango.

The details of the contango and the oil futures market may seem complex and arcane, but the shift in time spreads is exactly what OPEC has been targeting with its supply cut. By cutting near-term supply, OPEC has succeeded in changing the economics of oil trading, forcing inventories to draw down. That could cause a short-term supply problem as oil is unloaded from storage, but in the long run OPEC needs to drain that excess supply from storage tanks around the world in order to spark higher prices.

Traders are more and more confident that the oil market will experience tighter conditions as we move into the second quarter, a bet that is reflected in both the time spreads and the exceptional buildup in bullish positions on crude oil. The oil price rally is not without its risks – very notable risks that have been covered in previous articles – but for now, the futures market is offering investors and traders some reasons for bullishness.

Original article: http://oilprice.com/Energy/Energy-General/Next-Oil-Rally-Futures-Say-Market-is-Tightening.html

One reason public policy favors employer-based health benefits instead of individually owned health insurance is that policymakers believe it equalizes access to health care among workers of all income levels. Insurers usually demand 75 percent of workers be covered, which leads to benefit design that attracts almost all workers to be covered.

Employers do this by charging the same premium for all workers but having workers pay only a small share of the premium through payroll deductions. Most coverage is paid by the firm. Last year, the average total premium for a single worker in an employer-based plan was $6,435, but the worker paid only $1,129 directly while the employer paid $5,306.

Although this suppresses workers’ wages, workers cannot go to their employers and demand money instead of the employers’ share of premium. The tax code also encourages this practice, by exempting employer-based benefits from taxable income.

Does this equalize access to care? No, according to new research:

When demographics and other characteristics were controlled for, employees in the lowest-wage group had half the usage of preventive care (19 percent versus 38 percent), nearly twice the hospital admission rate (31 individuals per 1,000 versus 17 per 1,000), more than four times the rate of avoidable admissions (4.3 individuals per 1,000 versus 0.9 per 1,000), and more than three times the rate of emergency department visits (370 individuals per 1,000 versus 120 per 1,000) relative to top-wage-group earners.

(Bruce W. Sherman, et al., “Health Care Use and Spending Patterns Vary by Wage Level in Employer-Sponsored Plans,” Health Affairs, vol. 26, no. 2 (February 2017): 250-257.)

The reasons for these differences are not fully explained. Nevertheless, this research suggests employer-based benefits are not a good equalizer of access to health care, and the tax code’s prejudice in favor of those benefits and against individual health insurance should be revisited.

This article was published at The Beacon.

By Kevin E. Schmiesing*

When the colony of Louisiana became part of the United States in 1803, the mother superior of the Ursuline nuns in New Orleans wrote to President Thomas Jefferson, expressing concern over the security of their property, which consisted mainly of their school for girls. Jefferson replied:

The principles of the constitution and government of the United states are a sure guarantee to you that [your property] will be preserved to you sacred and inviolate, and that your institution will be permitted to govern itself according to its own voluntary rules, without interference from the civil authority…Be assured it will meet all the protection which my office can give it.

Contrast this episode with another image, two hundred years later. The Little Sisters of the Poor stand on the steps of the Supreme Court, party to a lawsuit against their own government. Like the Ursulines, they are in the business of running charitable institutions, in this case homes for the indigent elderly and dying. Their object, to use Jefferson’s words, is precisely to “govern themselves according to their own voluntary rules, without interference from the civil authority.” But the government, which Jefferson had pledged to be the protector of the sisters’ liberty, has now become the chief threat to it.

What had changed? I believe the answer has something to do with the connection between religious and economic liberty.

Religious freedom and economic freedom are, to borrow the words of James Madison, “equally the gift of nature.” Madison was not referring specifically to religious freedom and economic freedom when he wrote them, but he was making an argument similar to the one I’m making here.

The “Memorial and Remonstrance against Religious Assessments” was Madison’s intervention in a 1785 debate in Virginia concerning a bill in the General Assembly that would implement a tax to support ministers. Madison argued that “‘the equal right of every citizen to the free exercise of his Religion according to the dictates of conscience’ is held by the same tenure with all our other rights. If we recur to its origin, it is equally the gift of nature; … Either then, we must say, that the Will of the Legislature … may sweep away all our fundamental rights; or, that they are bound to leave this particular right untouched and sacred.”

What Madison recognized and articulated at the dawn of this nation’s history, was that the various freedoms—for which Americans had fought and that Jefferson had insisted in his declaration were “endowed by their creator”—were woven together in a seamless quilt of justice. To pull on one thread was to threaten to unravel the whole fabric.

Human beings, by virtue of being human, are bearers of rights. There has been and continues to be disagreement about the source of those rights, but where there has been consensus—at least throughout most of our history—is that the source is not government itself. Government is the protector but not the creator of rights.

This recognition, once granted, naturally extends to every dimension of human experience and activity. If we believe coercion in economic affairs to be wrong, we are more likely to believe that coercion in religious affairs is also wrong, and vice versa. Madison himself emphasized the intertwining of such rights when he proposed that the rights of conscience were themselves a kind of property.

A somewhat different but closely related reason for the link between these two liberties is that both reflect at base a commitment to the limits of state power. Where, for example, a right to seek employment in whatever field an individual chooses is recognized, it is implicitly held at the same time that government does not possess the power to determine one’s profession. By the same token, where the right of a congregation to build a church or a mosque or a synagogue is recognized, it is implicitly understood that government does not possess the power to regulate religious practice by preventing the construction of places of worship.

In this way, religious liberty and economic liberty are both corollaries of the principle of limited government. Limited government in this sense does not mean libertarianism or even “small-government” conservatism. It means simply that there is a clear distinction between the state and society—that there are entities and institutions that exist prior to, independent of, or beyond the purview of the state. The state is not the sole or even primary source of guidance, meaning, or fulfillment. In other words, the principle of limited government stands in opposition to the concept of the totalitarian state.

The prohibition against government infringement on free exercise in the First Amendment was intended to protect not merely private religious activity but also public religious expression. Here religious freedom engages with yet another fundamental freedom—assembly or association. It is in their institutional manifestations that churches and other religious bodies gain the heft necessary to serve as a counterweight to the state.

Religious institutions have historically played a central role as alternative centers of authority and thus as bulwarks against tyranny. It is no accident that despots seeking totalitarian power always seek to bring a culture’s religious institutions under their thumbs. This targeting of churches in particular is due to the fact that they represent an especially dangerous type of alternative authority. The prospect of human allegiance to a nonhuman creator undermines the very foundations of despotic power.

This brings us back to the Little Sisters of the Poor and the 2010 Affordable Care Act. Whether you believe the ACA is good policy or not, it is indisputably the case that the legislation extended government action in the health care field and that this involved, at least in some respects, a restriction of economic liberty. There emerged mandates for employers to provide health insurance, for individuals to purchase insurance, and for insurance plans to cover certain treatments and procedures. This, quite predictably, opened up a religious freedom can of worms.

For the field of health care is rife with moral and religious issues. Questions related to sexuality and reproduction—birth control, abortion, reproductive technologies, gender identity and sexual orientation therapies and treatments—are some of the most controversial, neuralgic issues in contemporary American culture and politics. By becoming deeply involved in health care, government must necessarily begin taking sides in these disputes, and thus government policy begins impinging on the religious freedom of millions of health care institutions, medical professionals, businesses, and individual consumers.

The inescapable conclusion is that restrictions on economic liberty naturally entail restrictions on religious liberty—or at the very least aggravate the tensions inherent in a religiously pluralistic society. Economic statism has negative consequences for religious freedom. Advocates of the market and champions of religious liberty alike would thus do well to defend both aspects of liberty, for they are both “equally the gift of nature.”

This article is excerpted from lectures Schmiesing delivered in February at Jacksonville State University in Alabama and at Thomas More College in Kentucky.

About the author:
*Kevin Schmiesing, Ph.D., is a research fellow at the Acton Institute.  He is a frequent writer on Catholic social thought and economics, is the author of American Catholic Intellectuals, 1895-1955 (Edwin Mellen Press, 2002), and is most recently the author of Within the Market Strife: American Catholic Economic Thought from Rerum Novarum to Vatican II (Lexington Books, 2004).

Source:
This article was published by the Acton Institute

By Karl-Friedrich Israel*

Members of the European political and media establishment seemed to be sure that the 45th president of the United States would be Hillary Clinton, or at least they were desperately hoping so. The days after the election one could hear clamor of indignation from top journalists and politicians alike. It almost felt as if the European project had lost shoulder to shoulder with Clinton, now that America, Europe’s most powerful ally, would be ruled by an “inhuman right-wing populist,” an outspoken critic of the European Union, and a sympathizer of the UK Independence Party. And after all he says “America first.” For the European establishment, this is an outrageous position to hold for an American president.

General secretary of the ruling Socialist Party in France, Jean-Christophe Cambadélis, has compared Trump to the Front National’s top candidate Marine Le Pen and noted that the French Left knew full well about the challenges ahead. French prime minister Manuel Valls emphasized that Europe needs to close its ranks, take responsibility and respond to the events on the other side of the Atlantic Ocean, adding that he does not believe in “the triumph of simplicity and demagoguery.”

German minister of foreign affairs Frank-Walter Steinmeier who called Trump a “preacher of hate” during the election campaign stated shortly after the outcome was certain that “American foreign policy will now become less predictable,” but that Germany “should not sit mesmerized like the rabbits before the snake.” Germany “should remain self-confident and needs to preserve its culture of public and political discourse.” But who knows to what kind of cultivated discourse he was actually referring?

Indeed, Donald Trump was compared to Adolf Hitler in German television news at one point in his campaign when he had already far exceeded the expectations of most pundits. But, hardly anyone could imagine him becoming the next US president. On the very evening of November 9 when the unthinkable was taking shape, the consortium of public broadcasters in Germany (ARD) presented a survey according to which only 4 percent of the German electorate would have voted for Trump. One wonders whether this representative survey was conducted exclusively among the employees of
the consortium.

When the Austrian presidential candidate and populist Norbert Hofer lost to Alexander Van der Bellen in early December, the EU establishment had its first moment of relief since the Brexit vote in the United Kingdom last June. “Hofer has hoped for the Trump effect in vain” ARD’s news anchor declared somewhat triumphantly at the evening of the election.

However, at the same time the Italian people voted against President Matteo Renzi’s proposal to change the Italian constitution, which led to his resignation and potentially a chance for the Eurosceptic Five Star Movement around comedian Beppe Grillo to form the new national government after early elections. This means that the three largest countries of the Eurozone and the EU (UK excluded), Germany, France and Italy, will hold national elections within the next year. The Italian daily La Stampa wrote that the referendum “tells the same story as Brexit and Trump.”

Hence, it is pretty obvious that almost all political events and ongoing developments in Europe are now interpreted in light of Trump’s victory. There is no question that Trump already has had an impact on European politics regarding strategy and rhetoric.

Looming Economic Realities in Europe

The most important issues, after the currency and debt crisis has mysteriously vanished from the scene for a time, is immigration, the stabilization of the Middle East, and how to react to millions of people coming into Europe.

Trump has such a significance for the political regime of the EU, among other things, because he was elected while openly advocating positions not expected to be capable of winning a majority, either in the US, and most certainly not in Europe. It runs completely against the position that the US government under Bush and Obama has taken, that Clinton sought to continue, and that the political leadership of the EU still wholeheartedly advocates and that is embedded in a broader political program. It is a program that mainstream media is vigorously promoting by emphasizing the benefits of open borders, diversity and multiculturalism, the importance of humanitarian assistance, as well as an official responsibility of the West to improve living conditions in the developing nations of Africa and Asia. That the latter so regularly turns into the very opposite in the form of aggressive military interventions is deliberately hushed up. Trump’s anti-interventionist positions in foreign policy have, against all odds, successfully challenged the globalist line of approach.

After an initial period in which Trump and his supporters were arrogantly ridiculed, a good dose of European superiority complex, vis-à-vis the US, was breaking through, and the general tenor has changed. In an act of self-defense, European political and media elites have desperately tried to make a bogeyman out of Trump and the movement behind him as they saw the broader implications it might have.

Trump was admittedly courting some of the slogans used against him, but most of them are just hysterical exaggerations or allegations. And, while the European establishment claims a position on the moral high-ground, even the most promising aspect of Trump’s advocated isolationism from a humanitarian viewpoint — withdrawal from foreign military interventions — is turned against him. It is argued that Trump will abandon Europe and that European countries will have to substantially increase their own military budgets in the future.

The fact that the aggressive foreign policy of the West under the leadership of the US over the past decades has triggered the destabilization of the Middle East and Northern Africa in the first place, and hence reinforced the immigration crisis that Europe is facing right now, is not critically highlighted at all.

Trump Will Be an Excuse for More Centralization

The EU establishment has obviously itself contributed to the problems it now tries to exploit in order to further centralize the political power structure of Europe. Trump will serve as a scapegoat that left Europe alone in the midst of an international conflict and humanitarian crisis. This narrative was spread before Trump had been in office for a single day, and it will be used as a justification for more intrusive EU policies if the peoples of Europe let it happen. However, chances are that the national governments all over Europe will face ever stronger opposition in the near future, if they are not directly replaced. Unfortunately, these opposition movements are not pushing in the right direction in every respect. But, all our problems will not be solved with next round of national elections anyway. They are much more fundamental and ideological. They are of a long-term nature.

About the author:
*Karl-Friedrich Israel is a lecturer at the University of Angers; a PhD candidate studying with Jörg Guido Hülsmann at the University of Angers; and a 2016 Mises Fellow.

Source:
This article was published by the MISES Institute

It is already clearly apparent, as many predicted, that Donald Trump’s election as president of the United States would signal the start of what might be the final monumental assault on much of what is good in our world. Whatever our collective gains to date to create a world in which peace, social justice and environmental sustainability ultimately prevail for all of Earth’s inhabitants, we stand to lose it all in the catastrophic sequence of events that Trump is now initiating with those who share his delusional worldview.

Starting with the appointment to his administration of individuals, such as Steve Bannon, Rex Tillerson and Scott Pruitt, who share his warped view of the world, and continuing with the policy decisions he is now implementing via executive orders, Trump threatens our biosphere with ecological catastrophe (through climate/environment-destroying decisions and perhaps through nuclear war) – see ‘US election: Climate scientists react to Donald Trump’s victory’ https://www.carbonbrief.org/us-election-climate-scientists-react-donald-trumps-victory and ‘It is two and a half minutes to midnight: 2017 Doomsday Clock Statement’ http://thebulletin.org/sites/default/files/Final%202017%20Clock%20Statement.pdf as well as ‘Trump pledges “greatest military build-up in American history”‘ http://www.presstv.ir/Detail/2017/02/24/511926/Trump-delivers-speech-at-CPAC – exacerbates military violence in existing war zones – see ‘Obama Killed a 16-Year-Old American in Yemen. Trump Just Killed His 8-Year-Old Sister’ https://theintercept.com/2017/01/30/obama-killed-a-16-year-old-american-in-yemen-trump-just-killed-his-8-year-old-sister/ – increases regional geopolitical tensions in ways that inflame the possibility of political unrest and military violence in new theatres – see ‘Worried Over Trump, China Tries to Catch up With U.S. Navy’ http://europe.newsweek.com/china-navy-budget-increase-trump-unpredictability-560985?rm=eu – supports violent and repressive regimes against those who struggle for liberation – see ‘The Middle East “peace process” was a myth. Donald Trump ended it’ https://www.theguardian.com/commentisfree/2017/feb/18/the-middle-east-peace-process-myth-donald-trump-ended-it – and is generally implementing decisions that reverse progressive outcomes from years of peace, social justice and environmental struggles. See, for example, ‘Trump’s Immigration Crackdown Is Likely to Bring a Flood of Lawsuits’ https://www.bloomberg.com/politics/articles/2017-02-22/trump-s-immigration-crackdown-likely-to-bring-lawsuit-flood and ‘One of Donald Trump’s first moves in the White House strips women of abortion rights’ http://www.news.com.au/lifestyle/health/health-problems/one-of-donald-trumps-first-moves-in-the-white-house-strips-women-of-abortion-rights/news-story/0b958833c3356ad3a00b785a6bfc21ef as well as ‘President Trump Breaks a Promise on Transgender Rights’. https://www.nytimes.com/2017/02/23/opinion/president-trump-breaks-a-promise-on-transgender-rights.html

Moreover, Trump, and those like him, further criminalize our right to dissent. See ‘North Dakota Senate passes bills criminalizing Dakota Access Pipeline protests’. http://www.wsws.org/en/articles/2017/02/21/dapl-f21.html

Why does Trump ignore overwhelming scientific evidence (for example, in relation to the climate) and want to ‘lock out’ people who are desperate to improve their lives? Why does he want to prepare for and threaten more war and even nuclear war?

Is Donald Trump sane?

According to Dr John D. Gartner, a practising psychotherapist who taught psychiatric residents at Johns Hopkins University Medical School, ‘Donald Trump is dangerously mentally ill and temperamentally incapable of being president’. See ‘Temperament Tantrum: Some say President Donald Trump’s personality isn’t just flawed, it’s dangerous’. http://www.usnews.com/news/the-report/articles/2017-01-27/does-donald-trumps-personality-make-him-dangerous?src=usn_tw

Moreover, Chris Hedges argues, Trump is dangerously violent. See ‘Trump Will Crush Dissent With Even Greater Violence and Savagery’. https://www.youtube.com/watch?v=-GU0JD7eKhY

But why is Trump ‘dangerously mentally ill’ and violent?

For the same reason that any person, whether in the Trump administration or not, ends up in this state: it is an outcome of the ‘visible’, ‘invisible’ and ‘utterly invisible’ violence that they suffered during childhood and which unconsciously determines virtually everything they now do. In brief, Trump is utterly terrified and full of self-hatred but projects this as terror and hatred of women, migrants, Muslims… and this makes him behave insanely. For a brief explanation, see ‘The Global Elite is Insane’. http://www.countercurrents.org/burrowes050214.htm For a more comprehensive explanation of why many human beings are violent, see ‘Why Violence?’ http://tinyurl.com/whyviolence and ‘Fearless Psychology and Fearful Psychology: Principles and Practice’. http://anitamckone.wordpress.com/articles-2/fearless-and-fearful-psychology/

So what are we to do? Well, if you are inclined to resist the diabolical actions of Donald Trump (and his insane and violent equivalents in the United States and other countries around the world), I invite you to respond powerfully. This includes maintaining a large measure of empathy for the emotionally damaged individual who is now president of the US (and his many equivalents). It also includes recognizing that this individual and his equivalents are the current ‘face’ of a global system of violence and exploitation built on many long-standing structures that we must systematically dismantle.

Here are some options for resisting and rebuilding, depending on your circumstances.

If you wish to strike at the core of human violence, consider modifying your treatment of children in accordance with the suggestions in the article ‘My Promise to Children’. https://nonviolentstrategy.wordpress.com/strategywheel/constructive-program/my-promise-to-children/

If you wish to simultaneously tackle all military, climate and environmental threats to human existence while rebuilding human societies in ways that enhance individual empowerment and community self-reliance, consider joining those participating in ‘The Flame Tree Project to Save Life on Earth’. http://tinyurl.com/flametree

If you wish to resist particular elite initiatives that threaten peace, justice and environmental sustainability, consider planning, organizing and implementing nonviolent strategies to do so. But I wish to emphasize the word ‘strategies’. There is no point taking piecemeal measures or organizing one-off events, no matter how big, to express your concern. If you don’t plan, organize and act strategically, you will have wasted your time and effort on something that has no impact. Remember 15 February 2003? Up to thirty million people in over 600 cities around the world participated in rallies against the war on Iraq in what some labeled ‘the largest protest event in human history’. Did it stop the war?

So if you are inclined to respond powerfully by planning a nonviolent strategy for your campaign, you might be interested in the Nonviolent Strategy Wheel and other strategic thinking on this website – Nonviolent Campaign Strategy https://nonviolentstrategy.wordpress.com/ – or the parallel one: Nonviolent Defense/Liberation Strategy. https://nonviolentliberationstrategy.wordpress.com/

And if you wish to join the worldwide movement to end violence in all of its forms, you might also be interested in signing the online pledge of ‘The People’s Charter to Create a Nonviolent World’. http://thepeoplesnonviolencecharter.wordpress.com

Donald Trump has formidable institutional power at his disposal and he and his officials will use it to inflict enormous damage on us and our world in the months ahead.

What most people do not realize is that we have vastly greater power at our disposal to stop him and the elite and their institutions he represents. But we need to deploy our power strategically if we are to put this world on a renewed trajectory to peace, justice and sustainability.

The hunger with which US officials pursue copyright or general intellectual property violations is insatiably manic. The degree of that hunger is expressed by the now suspended, and most likely defunct Trans-Pacific Partnership, an attempt to further globalise the policing of IP laws in favour of corporate and copyright control.

Then come the vigilantes and those singing different, discordant tunes suggesting another alternative. One such figure was Kim Dotcom, founder of Megaupload and on the US Department of Justice wanted list for some years, along with company co-founders Mathias Ortmann, Bram van der Kolk and Finn Batato.

His case is doing the torturous rounds in New Zealand, where the German-born defendant remains based, still seeing whether he can elude US authorities on the subject of inventive alleged violations.  It has become one of the largest criminal copyright cases in history, beginning after Dotcom’s dramatic arrest in 2012 at his New Zealand mansion at the hands of dozens of agents, both NZ and US, along with two helicopters.

The New Zealand court decided at the start of this week that the 2015 decision of the lower court favouring the extradition of Kim Dotcom and his co-defendants be upheld.  Justice Murray Gilbert of the High Court seemed rather tricky with his reasoning.  For one, he admitted “that online communication of copyright protected works to the public is not a criminal offence in New Zealand under s. 131 of the Copyright Act.”

Dotcom and his legal team would have felt rather thrilled with that. The prosecution plank had collapsed.  Case closed.  Except, of course, that it hadn’t.  Justice Gilbert proceeded to assume a mighty pulpit and preach despite the absence of a NZ copyright offence in this case.

Much of this lay in the prosecutorial effort to expand the range of offences, a tactic the Dotcom team termed “massaging”.  In widening the net, acts amounting to internet piracy were suggested, including racketeering, money laundering, to name but a few charges additional to the issue of copyright infringement.  Many coalesced around the issue of conspiracy, a favourite, catch-all provision US prosecutors have loved to employ.

The Crimes Act, in other words, had loomed into judicial consideration with its full force, its “general criminal law fraud provisions” doing their bit to undermine the case of the appellants, despite Dotcom’s assertion that this was purely a copyright matter.  Read along with s. 101B of the Extradition Act itself, the judge agreed “that the appellants are eligible for extradition on all counts for which their surrender is sought.”

That wilful infringement supposedly committed by Dotcom did something devastating to the copyright holder: deprive it “of something to which it may be entitled.”  (The amount alleged is staggering: $500 million worth.  Dotcom is alleged to have netted $175 million in criminal proceeds.)  It followed that the alleged conduct on count 2 constituted “the offence of conspiracy to defraud in terms of art II.16.”

Article II, paragraph 16 of the extradition treaty between the US and NZ outlines the grounds for extradition: “Obtaining property, money or valuable securities by false pretences or by conspiracy to defraud the public or any person by deceit or falsehood or other fraudulent means, whether such deceit or falsehood or any fraudulent means would or would not amount to a false pretense.”[1]

Digital activists have a brat element to them, an impetuousness that follows the crooked over the straight. They are often necessary boons excavating to find deficiencies in existing systems, rather than spotty criminals to be potted.

In Dotcom’s case, a cloud storage provider is being prosecuted, an aspect that has grave implications in the broader internet domain.  For one, it suggests a self-policing dimension to the operations of such an enterprise. Dotcom’s claims there, rather reasonably, are that policing the behaviour of 50 million daily users of a site is hardly credible, though efforts were made to detect copyright infringements. For all that, the US DOJ would still claim that there was a mere “veneer of legality” to such operations.[2]

As Dotcom’s barrister, Ron Mansfield, said after Justice Gilbert had down his judgment, “The High Court has accepted that Parliament made a clear and deliberate decision not to criminalise this type of alleged conduct by internet service providers, making them not responsible for the acts of their users.”[3]

Dotcom’s legal counsel, Ira Rothken, put it such last year: “The second you put a cloud storage site on the Internet, whether it’s Google or Megaupload, there’s going to be good users and bad users.  There’s going to be folks who are going to infringe, there are going to be folks who are saving wedding photos and using that for fair use.” [4]

But the legal assessment of Dotcom’s case suggests that prosecuting authorities will be favoured, and that powerful corporate demands expressed through state intermediaries and lobbies, will continue to have their day. Any effort to battle this case out in a US setting is most likely, as Rothken asserts, going to take place on an “unfair playing ground”.[5]  Next stop: the NZ Court of Appeal.

Notes:
[1] https://www.documentcloud.org/documents/1501886-extraditionusnz.html

[2] https://www.justice.gov/usao-edva/release-victim-notification

[3] http://www.scoop.co.nz/stories/PO1702/S00226/dotcom-legal-team-on-high-court-judgment.htm

[4] http://www.cnbc.com/2016/08/29/megaupload-founder-kim-dotcom-wouldnt-get-a-fair-trial-in-us-lawyer-says-as-extradition-appeal-hearing-starts-in-new-zealand.html

[5] http://www.cnbc.com/2016/08/29/megaupload-founder-kim-dotcom-wouldnt-get-a-fair-trial-in-us-lawyer-says-as-extradition-appeal-hearing-starts-in-new-zealand.html

By Yasar Yakis*

Turkish-Iranian relations are experiencing new turbulence as Turkish President Recep Tayyip Erdogan said on Feb. 14 that Tehran is promoting “Parthian (Persian) nationalism.” Turkish Foreign Minister Mevlut Cavusoglu followed suit by referring to Iran’s sectarian policies in the region. Foreign Ministry spokesman Huseyin Muftuoglu elaborated further, saying Iranian accusations are “neither acceptable nor comprehensible.”

Iran responded with a statement by Foreign Minister Javad Zarif, who accused Turkey of lacking gratitude. “Our friends in the Turkish government accuse Iran of following a sectarian policy,” he said. Referring to the July 15 failed coup attempt in Turkey, “don’t they remember that we spent a sleepless night for their government that is not Shiite?”

Iranian Foreign Ministry spokesman Bahram Qassemi went a step further: “There are limits. We hope such statements are not made again. If our Turkish friends continue with this attitude, we will not remain silent.” Iran summoned Turkey’s ambassador in Tehran for an explanation.

Turbulence in the two countries’ relations is not new, and this will not be the last time. Each time, a modus vivendi was ultimately found. It is worth remembering that the border between Turkey and Iran is one of the oldest international boundaries. It was delineated by the Qasr-i Shirin Treaty of 1639, and has not changed an inch in almost 380 years. This is an indication of the stability of their relations.

An unfortunate coincidence is that this friction is taking place at a time when the two countries could together make valuable contributions to solving several regional problems, the most salient being the Syrian and Iraqi crises.

In Iraq, the fight against Daesh continues unabated in Mosul. Turkey and Iran could help Iraq get rid of this scourge if the Iraqi authorities invite them to do so. The help to be extended by a neighboring country is a more sensitive issue, because the refraction point between assistance and interference is not always easy to determine.

In Syria, Turkey and Iran have several converging interests. One of them is the preservation of Syria’s territorial integrity. If the country disintegrates, it may take a long time for the region to stabilize again. Turkey and Iran could contribute a lot to the preservation of Syria’s territorial integrity if they unite their efforts.

Another area of convergent interests is the Kurdish aspiration to establish an autonomous region in northern Syria. This aspiration is supported by the superpowers Russia and the US, though they also support Syria’s territorial integrity.

Turkey will be more directly affected by it because it will be surrounded from the south by a Kurdish belt. Syrian Kurds emphatically declare they only seek autonomy, not independence. But if Syria disintegrates, they are almost ready to proclaim independence. Turkey is opposed to the establishment of a Kurdish state that will surround it from the south. Iran also opposes this, but they cannot cooperate to abort it if they do not stop mutual recriminations.

The establishment of such a zone in Syria will encourage Turkey’s Kurds to try to do the same. This would be detrimental to Iranian interests as well because after Iraqi, Syrian and Turkish Kurds, it will be Iranian Kurds’ turn to do the same.

Since Syria can be expected to favor the preservation of its own territorial integrity, Turkey, Iran and Syria will have converging interests. Ankara may not be prepared to cooperate with Damascus presently, but the convergence of interests will remain to be explored when the circumstances are suitable.

Turkey and Iran are important trade partners. They have not been able to mobilize the full potential for cooperation so far because of economic sanctions on Iran. Turkey receives around 10 billion cubic meters of natural gas from its neighbor. If the Pars II oil reserves are fully developed, Turkey may cooperate with Iran to construct a pipeline to export gas from these rich reserves to Europe.

The biggest danger in the Middle East is further sectarianization of the conflict. Turkey and Iran (together with Saudi Arabia) could play an important role to avoid that.

*Yasar Yakis is a former foreign minister of Turkey and founding member of the ruling AK Party.

By Dr. S.Chandrasekharan

On 21st February, after a marathon Cabinet Meeting, Prime Minister Dahal announced that the Local Body Elections will be held in May 14 in one go. The elections were last held in 1997.

The urgency to announce the elections soon despite the objections from the Madhesi Groups, was a Supreme Court Directive that said that elections to all the three tiers of the government should be held as mandated by the Constitution before January 21, 2018. There were suggestions particularly from the opposition UML to go for the provincial and federal elections and skip the local body elections altogether.

The UML is obviously in a hurry as they feel that the present time is ripe as they are still riding high on a nationalist agenda and for standing up to India after the “blockade.” While it is true that K.P. Oli and his followers are popular, it cannot be presumed right now that at the time of federal elections this popularity would turn into votes.

As expected, the Madhesi Groups are up in arms. They had maintained that the constitutional amendments should be gone through before the local body elections could be thought of. The problem is that the Constitutional amendment bill in the parliament is unlikely to get two thirds majority of the members unless the UML relents which it will not. K.P. Oli made a tongue in cheek comment that the local body elections can be gone through if the Madhesi Groups accept the result of the voting of the amendment bill in the parliament!

It is not that PM Dahal did not try to negotiate with the Madhesi groups. He had many meetings and the last one was on 19th February. But the Madhesi groups are adamant.

One of the top leaders of the Madhesi Group- Mrigendra Kumar Singh Yadav, declared that

To hold the local body elections despite the objection of the Madhesi Groups is to keep the Madhesis always under the thumb of the three major parties.
It is too premature to hold the elections when the issues relating to federalism and sharing of power between the centre and the provinces are yet to be settled.
It is not proper to conduct elections with an “unjustifiable” low number of local bodies in the Madhesi districts.

The SSFN and NSN ( Sanghiya Samajbadi Forum of Nepal and Naya Shakthi Nepal) of Upendra Yadav and Dr. Baburam Bhattarai while opposing the polls said that the LLRC report that had recommended 719 local bodies is “incomplete, unscientific and biased.” They also said that the local body elections come under the State’s jurisdiction under the constitution and therefore cannot be held before the provincial polls.

The LLRC had recommended 719 units for the local body elections and this has been done after a detailed study. The LLRC chairman Balananda Paudel who is busy closing the commission had said that the LLRC cannot make any changes in the report anymore. The task force that had examined the report had said that perhaps some additions could be made to the eight districts of Province No. 2. No number is being mentioned, but the intention appears to have another 25 units and it is within the jurisdiction of the government to increase the numbers suitably.

There is no doubt that time is running out and the local body elections will have to be gone through soon to pave the way for the provincial and federal elections. A tentative date in November is being thought of, for the provincial elections. But no one appears to be ready. The Constituency Delimitation Commission has not even been formed to fix the 165 constituencies at the federal level. Without federal constituencies, provincial level seats cannot be allocated.

It has been pointed out by many in the media that failure to hold elections to all the levels of the government within the mandated period will lead to a constitutional crisis. In a larger context this failure would threaten the very stability of the political structure and the future of the Constitution.

The Madhesi Groups should reconsider their inflexible position and realise that with present total opposition of the UML no amendment to the constitution is possible. They were the ones along with the Maoists who pushed for federalism. The Government has also activated the Federal Commission to ensure the rights of Madhesis, Tharus and indigenous communities. The Terai has suffered enough over the last two years due to regular agitations. It is time to think of alternatives to achieve their goals and let the local body elections be gone through with additional units recommended by the Task Force on the LLRC Report.

It is also true that the UML and its leader K.P.Oli have been very adamant and nasty to the Madhesis. If they continue with this kind of attitude towards the Madheis, I suspect many more C.K. Rauts seeking secession will emerge. It is time for them also to review their position.

An interesting suggestion has been made to amend Article 274 of Nepal’s Constitution in line with Article 3 of the Indian Constitution. Perhaps this can be examined.

It is time both for the Madhesi Groups and the UML who have considerable following in the Terai to move on rather than sticking to rigid positions.

Japan’s Imperial system, the only of its kind in the world, has been in news since the current Emperor Akihito announced in a live television broadcast in August 2016 his desire to abdicate from his throne as he was less confident than before to discharge his national duties owing to failing health. In his message the Emperor had felt “worried that it may become difficult for me to carry out my duties as the symbol of the state with my whole beings as I have done until now”. This presented itself with a new situation for the government as the Imperial House Law that governs the Imperial family does not have any provision for abdication. Currently, death is the only path to succession. At present, only posthumous succession is allowed under the 1947 Imperial House Law.

For the Japanese people, the institution of the Emperor is sacred and there is an element of divinity attached to it. After the War, the Constitution has limited the role of the Emperor and the royal family’s cultural role has been curtailed. Before the War, Emperor Hirohito was considered as divine, as next to God, but during the Allied Occupation, Emperor Hirohito issued a rescript renouncing the idea that he was a living God.

The current Heisei era commenced after Emperor Akihito succeeded when his father Emperor Hirohito died in 1989, ending his long reign of 64 years of the Showa era and ushering the new Heisei era. The decision to name the current reign as Heisei, which means ‘achieving peace’, was appropriate as Japan was keen to bury its militaristic past and keen to be known as a peace-loving nation. The fundamental aim of the reign was to heal the wounds wrought by war waged in the name of his father, Emperor Hirohito. Article 9 of the Constitution has also provided the legal back-up to Japan’s self-defined goal of promoting peace in the world and never again to wage war. In the 29 years of reign, the current Emperor has remained as the country’s unifying force and conducted his role with dignity.

If the Emperor relinquishes his throne while alive, it would be the first such case since Emperor Kokaku did so some 200 years ago. The immediate concern for the government is to finalise the name of the new era as the reigns of all previous Emperors are given the name of an era during the years their reigns are in force. If the Emperor indeed abdicates, which seems to be the case as the government can do nothing if the Emperor is firm, that would put an end to the current Heisei era, introduced in 1989 following the death of his father Hirohito (posthumously called Emperor Showa) and usher in a new gengo, the Japanese term for an era name, for the first time in about 30 years.

Japan has a unique way to identify a year. Though the practice originated in ancient China, historians say that Japan is the only country that adheres to such a practice, though the common international practice is to use and follow the Western calendar. Gengo has no year zero. For example, when the current Emperor’s reign began in 1989, it is called Heisei 1 and not Heisei 0. Therefore the year 2017 correspond to Heisei 29.

The naming of an era is a serious matter for the government. Each gengo is believed to represent an ideal of an era and in principle consists of two auspicious kanji, including hei (peace), ei (eternal), ten (heaven) and an (safety). In Japan’s imperial history, the first era started in 645 under the name Taika and subsequent 247 era names including up to Heisei. If Emperor Akihito abdicates, the name of the new Emperor’s reign would be the 248th.

The naming of an era is important for Japanese ethos, though plenty of changes have to be made in important records, such as official IDs, driver’s licenses, health insurances cards, bank books and so on when a new era commences. Japanese people take pride in explaining their identity by emphasising which era they were born.

As per the old version of the Imperial House Law before and during the War, the Emperor was the ultimate authority to determine the name of a new era upon his accession. This changed during the Allied Occupation and was stripped of its legal status. But debates to enshrine this into law resumed when Emperor Hirohito’s impending death loomed large and finally acquired a new legal status in the 1970s. Following an opinion poll by the Cabinet office that revealed 87.5 per cent of the public using gengo in their daily lives paved the way for the Diet to pass a law in 1979 authorising the Cabinet to designate eras. This Era Name Law stipulates the name of an era can only be updated in tandem with a change in the Imperial Throne. The Era Name Law thus transferred the power to name a new era from an Emperor to the Cabinet.

So, when Emperor died on 7 January 1989, then Chief Cabinet Secretary Keizo Obuchi announced in an emergency news conference within hours of the Emperor’s demise the start of the Heisei Era, effective the following day. It appears the government had already considered several names by consulting experts and chairpersons of the two chambers of the Diet and chosen the name of the new era.

Since the surprise announcement by the current Emperor Akihito in August 2016 expressing his desire to abdicate, the government probably is already with the name of the New Era but unlikely to reveal. Though the government normally is expected to go through the legal processes to choose the new name of a new era in the event of impending death of the living Emperor, public discussion is taboo. This situation could change this time as the Emperor himself has expressed desire to abdicate. So, discussion on the name of a New Era could be acceptable this time.

There are speculations that this time the government is unlikely to solicit public discussion to decide new Imperial Era Name should Emperor Akihito relinquishes the throne. In the present situation, the succession from Emperor Akihito to his son, Crown Prince Naruhito, could take place at a predetermined date because the government plans to announce the new era name at least several months before the Emperor’s envisioned abdication.

The Abe government is reportedly seeking to pass special legislation in the Diet that would allow the Emperor to pass on the Chrysanthemum Throne without dying, a move that will bring the Heisei Era to an end. An idea to change the era name on the first day of 2019 has been floated. Currently, death is the only path to succession because the Imperial House Law lacks a provision for abdication. If Emperor abdicates, it would be Japan’s first since Emperor Kokaku did so some 200 years ago in 1817. Then current law prohibiting abdication is based upon concerns enshrined in 19th century Japanese law that saw such a move as threatening the nation’s stability.

A start of a new era with both a new Emperor and abdicated Emperor would have dramatic influence in the society. Computer programmers and engineers shall have significant workload to rework on their systems. Developing smartphone apps and websites would mean a lot of work adjusting the systems. Revisions to every contents concerned would be a laborious task for programmers. But if the abdication is announced much in advance, there would be less possibility of chaos as good amount of time would be available to make the readjustments wherever needed such as on drivers’ licences and bank books.

Domestic debate

Abdicatation debate is a delicate issue in Japan and open discussion is taboo. The Abe government ought to seek consensus over legislation between the ruling and opposition parties for the Emperor’s abdication. The leaders of ruling parties and opposition are seeking consensus over the legislation, based on the fact that Article 1 of the Constitution stipulates that the Emperor’s status derives from “the will of the people”. In its points of discussion, the panel discussed the advantages and the disadvantages of two proposals: institutionalizing abdication in principle or allowing only the current Emperor to do so.

There are several opinions on the proposed bill. Conflict has arisen over whether to create a special measures law to enable abdication only for the current Emperor or to institutionalise abdication by revising the Imperial House Law. Both the ruling Liberal Democratic Party and its coalition partner Komeito are on the same page to build consensus between the ruling and opposition parties based on the government’s plan. The opposition Nippon Ishin no Kai is also in favour of consensus-building. However, the Democratic Party, the Japanese Communist Party and the Social Democratic Party call for institutionalising abdication by revising the Imperil House Law.

The issue of creating female branches of the Imperial family also had cropped up sometimes ago when the Crown Princess delivered a baby girl. The discussion was buried soon enough as no strong advocacy emerged to such an idea.

When Prime Minister Abe formed a panel led by Takashi Imai, honorary chairman of the Keidanren business lobby to consider the matter, eight experts supported the idea of abdication, citing the Emperor’s own wishes and public opinion polls showing widespread support for letting Emperor Akihito step down. The conservative experts opposed abdication, preferring regency or have another imperial family member stand in for the emperor in his official duties in case Emperor Akihito is unable. The government is weighing the option of a one-time exception for Emperor Akihito. Some, however, want a permanent solution to the problem. However, many opposition parties consider a one-time provision for abdication to be a hasty response and therefore call for a comprehensive reform of the Imperial system. The opposition feels that a predetermined goal of granting an exception for the current emperor alone is not appropriate.

The point in contention was how to define the “will of the people and the situation at the time” to make abdication legally possible. It was argued that if abdication is institutionalised, it “could allow those in power at the time to arbitrarily interpret and apply required conditions [for abdication], as well as use [their decisions] as a basis for justifying themselves.” As it transpires, not all political parties are on the same page on abdication.

The panel considered three categories of duties that the Emperor performs: mandatory ceremonies stipulated by the Constitution, non-mandatory public duties performed based on an emperor’s own will, and private duties of an emperor, such as Shinto ceremonies and academic studies. The current Emperor has truly served as the symbol of the state and unity of the people by keeping his role limited to public duties, including attending numerous ceremonies with foreign dignitaries and visits across the country, including those in disaster-hit areas. Though some conservatives argue that Emperor Akihito can have his non-mandatory public duties greatly reduced, and a regent can be installed to perform the ceremonies stipulated by the Constitution, such proposal does not find any support and is likely to be rejected.

It is not easy to remove all confusions related to the abdication issue. Defining general conditions of an Imperial retirement owing to “advanced age”, as is the case in Emperor Akihito, could vary depending on an emperor’s health condition and ever-extending life spans in Japan. So the argument goes in favour of one-off legislation for the current Emperor than exercising the option for permanent reform applicable to all future Emperors. This would, it is argued, eliminate any “arbitrary abdication” that might be forced by a certain political group.

Amid all these confusion, it appears that the Emperor would get his hinted wish. Though the Emperor and the Imperial family do not have any direct role in the affairs of the State, it is seen not beyond a kind of symbol and decoration. On its part, the Emperor has made efforts to humanize his office and earned affection of the people.

The accession to the throne by present Crown Prince Naruhito if Emperor Akihito abdicates would mean adding another national holiday on the new Emperor’s Birthday. The government then shall struggle to work what would be the status of the abdicated Emperor. Currently, 23 December, the birthday of Emperor Akihito, is designated a national holiday. Even Emperor Hirohito’s birth day on 29 April still remains a holiday in what is known as Showa Day. Japan shall be facing plenty of confusions in the coming time in case Emperor Akihito abdicates. Traditionally, the title would be joko, meaning “retired emperor” but it could be problematic as the former emperor’s role could clash with the successor. Other experts argue, it would be more appropriate to call zen tenno or moto tenno, meaning “former” or “previous” emperor, respectively.

It is not easy to remove all confusions related to the abdication issue. Defining general conditions of an Imperial retirement owing to “advanced age”, as is the case in Emperor Akihito, could vary depending on an emperor’s health condition and ever-extending life spans in Japan. So the argument goes in favour of one-off legislation for the current Emperor than exercising the option for permanent reform applicable to all future Emperors. This would, it is argued, eliminate any “arbitrary abdication” that might be forced by a certain political group.

Female Succession?

Should this occasion be used to explore if a female line of succession to the Imperial throne be introduced? Currently, the accession is limited to males descended from the male Imperial line. The argument is based on the premise that if Prince Hisahito, the son of Prince and Princess Akishino (Crown Prince Naruhito’s’s younger brother) does not have a male child, there would be nobody to accede to the throne. So, there are many uncertainties regarding the future of the Imperial family. Currently, only three Imperial members have the right of succession to the Imperial throne. Prince Hisahito is the only one from the generation of the Emperor’s grandchildren.

When Junichiro Koizumi was Prime Minister, in 2005 this issue was debated intensely and the question of having females and their descendants be granted the right to ascend the throne was discussed. The birth of Prince Hisahito on 6 September 2006 stalled the proposal from moving further. The issue of female Imperial branches came to the table for discussion in view of the decrease in Imperil family member. Prince Hisahito, now 11 years old, is third in line of succession after his uncle and father. For the present, the question of female Imperial branches, who currently not eligible and also lose their Imperial status through marriages are not relevant to the succession issue but could re-emerge in the future when situation might change. The Cabinet then would be grappling with the legality of such a situation.

The writer is ICCR India Chair Visiting Professor at Reitaku University, Japan. Views expressed are the author’s own and do not represent either that of the ICCR or Government of India.

By Nick Cunningham

The oil majors reported poor earnings for the fourth quarter of last year, but many oil executives struck an optimistic tone about the road ahead. Oil prices have stabilized and the cost cutting measures implemented over the past three years should allow companies to turn a profit even though crude trades for about half of what it did back in 2014.

The collapse of oil prices forced the majors to slash spending on exploration, cut employees, defer projects, and look for efficiencies. That allowed them to successfully lower their breakeven price for oil projects. However, some of that could be temporary, with oilfield services companies now demanding higher prices for equipment and drilling jobs, in some cases upping prices by as much as 20 percent. The result could be an uptick in the cost of producing oil for the first time in a few years. Rystad Energy estimated the average shale project could see costs rise by $1.60 per barrel, rising to $36.50.

That does not seem like the end of the world. After all, those breakeven prices are still dramatically lower than what they were back in 2014. In fact, Reuters put together a series of charts depicting the fall in costs for shale production in different parts of the United States. Every major shale basin – the Eagle Ford, the Bakken, the Niobrara, and the Midland and Delaware basins in the Permian – have seen breakeven prices fall by as much as half since 2013. The slight uptick in costs expected in 2017 is a rounding error compared to the reductions over the past half-decade.

But that is just for shale drilling. The oil majors produce most of their oil outside of the shale patch, with much of their output coming from longer-lived projects in deepwater, for example. To be sure, some of the largest oil companies have made some progress in cutting costs over the past few years, but a new report casts doubt on the industry’s track record.

According to new research from Apex Consulting Ltd., the oil majors are still spending more to develop a barrel of oil equivalent than they were before the downturn in prices – in fact, much more. Apex put together a proprietary index that measures cost pressure for the “supermajors” – ExxonMobil, Royal Dutch Shell, Chevron, Eni, Total and ConocoPhillips. Dubbed the “Supermajors’ Cost Index,” Apex concludes that the supermajors spent 66 percent more on development costs in 2015 than they did in 2011, despite the widely-touted “efficiency gains” implemented during the worst of the market slump. It is important to note that this measures “development costs,” and not exploration or operational costs.

However, performances varied by company. Eni, for example, saw its development costs decline by 32 percent between 2011 and 2015, a notable achievement. Chevron and ExxonMobil also posted efficiency gains, although more modest figures than Eni. Chevron’s costs fell 6 percent and Exxon’s were down 5 percent over the five-year period.

At the other end of the spectrum is Royal Dutch Shell, which saw development costs quadruple. ConocoPhillips and BP fared only slightly better, with costs roughly doubling over the timeframe. As a whole, the development costs for the group of “supermajors” rose 66 percent to $18.39 per barrel.

After the collapse of oil prices in 2014, the cost index did decline. Oil producers squeezed their suppliers, streamlined operations, and improved drilling techniques. But costs still stood 66 percent higher than in 2011.

The index points to underlying structural increases in development costs for the broader industry.

At $18 per barrel, the cost figure would seem rather low. But it is important to note that this is just for “development costs,” which represent just over half of a company’s total cost. That figure excludes the cost of exploration as well as funding ongoing operations. So the “breakeven price” so often quoted in the media is actually quite a bit higher. BP, for example, recently admitted that its finances will not breakeven unless oil trades at roughly $60 per barrel.

The supermajors are in a tricky position. They are trying to cut back on spending in order to fix their finances and pay down the massive pile of debt that they have accumulated in the past few years. However, their reserves will decline if they fail to replace them. Exxon, for example, only replaced 67 percent of the oil it produced in 2015.

Moreover, as Apex Consulting notes, oilfield services might demand higher prices in the future as drilling activity picks up. Right now, offshore rigs are still underutilized, meaning that price inflation has yet to kick in.

In other words, the decline in costs post-2014 are, at least in part, cyclical. Costs will rise again as activity picks up unless oil producers work with their suppliers to address the underlying structural costs of oil production.

Original article: http://oilprice.com/Energy/Energy-General/Oil-Majors-Costs-Have-Risen-66-Since-2011.html

It appears Lithuania expects major changes in the near future. Lithuanian Foreign Minister Linas Linkevičius was on an official visit to the United States of America from February 20-24, 2017. During the visit he said that Lithuania seeks the permanent presence of United States troops in its territory.

“We have requested stationing of military forces in our country on a more permanent basis – not only rotational but also more permanent,” the minister told BNS in the telephone interview from Washington D.C.

Linas Linkevicius’ call for the permanent presence of United States troops in Lithuania territory can be regarded as forthcoming constitutional changes. The matter is, under Articles 137 of the Lithuanian constitution (http://konstitucija.lt/lt/konstitucija/137-straipsnis/) there may not be any weapons of mass destruction and foreign military bases on the territory of the Republic of Lithuania.

The unlikely words of the Lithuanian high ranking official demonstrate only his personal point of view. It is improbable also that he asked for permanent foreign military presence in the country without coordination with the President and the Government.

But do they have the right to act against the Constitution? As it is well-known the Government is only the executive branch and might not violate the Constitution and decide for Lithuanian people. The more so, locals are not happy at all about foreign soldiers, who often behave themselves without any respect to citizens.

Such an issue as foreign troops deployment on a permanent basis is at least an issue for public discussion and then the amendments to the Constitution should be adopted by Seimas. The third step is a new law execution by the Government and people.

Under another article of the Constitution (Article 25), the citizens shall have the right to receive, according to the procedure established by law, any information concerning them that is held by State institutions. The Minister of Foreign affairs also violates the Lithuanians’ right of receiving information. It seems as if the decision had been made before Linkevičius announced the request was in the US. Lithuanians learned about it only from media resources ex post facto.

If Mr. Linkevičius was authorized by the Government to seek the permanent presence of United States’ troops in the territory of Lithuania it means that national authorities do not respect the citizens of their country and feel themselves omnipotent.

It is clear that if such an agreement between the United States and Lithuania is signed it will for sure cause a negative reaction from Moscow, and will lead to an even greater confrontation. This issue is even more than questionable, because may cause two basically different consequences. On one hand it can be the indicator of NATO’s strong capability to defend its members, and on the other – it can force Russia to further increase its military strength. It is the so-called vicious cycle. A chain of events in which the Russian response to Lithuania can aggravate the existing threat of an open confrontation.

Defence and security are obviously the main tasks of Lithuanian politics, but the Law is the Law, not empty words. To obey the Law, and to respect the rights guaranteed by the Constitution are the main responsibilities of the Lithuanian legislative branch. I do not want that Lithuania should go down in history as the country that provoked a war due to lack of political wisdom.

Adomas Abromaitis is a Lithuanian expatriate living in the United Kingdom.

Since the beginning of this decade the ‘Bangladesh Development Model’ (BDM) has been drawing attention for achieving remarkable success in reducing poverty and accelerating economic growth, pulling the country from a lower-income to a lower-middle-income country.

Also the recent visits of the Chinese President Xi Jingping and the World Bank Group President Jim Yong Kim provide more acceptability and legitimacy to the developmental initiatives, macroeconomic successes, and multilateral stances of the current government of Bangladesh. The state’s policies and strategies to accelerate developmental sustainability followed by three consecutive plans i.e. ‘Vision 2021’ — establishing Bangladesh as a middle income country –, ‘Vision 2030’ — achieving zero poverty rate –, ‘Vision 2041’ — constructing a sustainable economic order as a developed economy — are shaping the faces of BDM.

The eradication of poverty initiating gradual transformation towards socio-economic sustainability is occurring due to women empowerment, gender equality in education, investment in human capital, microcredit, reducing maternal and child mortality rate, modern sanitation, increasing life expectancy, expanding RMG and private sector, demographic dividend in terms of human resources, and increasing agricultural production etc. However, the vision of sustainability based on growth and equity depends on how Bangladesh is going to manage its developmental challenges-retaining economic growth, inequality, mal-governance and corruption, geo-economic balances and strategies, qualitative development in health and education, environmental and infrastructural sustainability, diversification of economy, energy security and communication- in the near future.

Bangladesh: Journey from Poverty to Development

Bangladesh emerged from the ashes of a gory War of Independence in 1971 as the world’s second poorest nation. The war almost completely destroyed the physical infrastructure of the country. Also the long history of deprivation and inequality during the British and Pakistan periods inherited a vulnerable economic order for Bangladesh. Immediately after the independence the first government faced multifaceted challenges- including famine, natural disasters, corruption, nepotism, fragmented law and order, etc.- which U.S. presidential security adviser Henry Kissinger dubbed as a “basket case” assuming a gray future for Bangladeshi economy.

Throughout the 1970s, Bangladesh’s average GDP growth was 1.5 percent mainly because of three reasons: 1) war 2) massive nationalization and losing spree in all public enterprises and 3) policy switch toward denationalization. Capitalizing land and labor Bangladesh became able to manage its economic turmoil and since the 1980s, Bangladesh’s decade-wise average growth shifted roughly one percentage point higher, starting from 3.5 percent to reach 6.5 percent in the 2010s (Paul, 2016). The latest World Bank report, entitled ‘Poverty and Shared Prosperity 2016: Taking on Inequality’ shows that 18.5 percent of the population of Bangladesh was poor in 2010 compared with 44.2 percent in 1991. This achievement means that 20.5 million Bangladeshis escaped from poverty between 1991 and 2010.

Broadly we can divide the phases of Bangladesh’s economic history in the following way: a) 1970s-trasitional economic order shifting from extreme poverty to the securities for basic needs; b) 1980s-journey towards industrialization and foreign direct investment; c) 1990s-era of privatization and economic liberalization; d) 2000s-constructing a basis for economic growth or pre-takeoff phase; e) 2010-onwards: journey towards consolidating economic growth into sustainable development.

However, the economic growth of Bangladesh since 1972-2015 can be represented through the following graph:

Analyzing Bangladesh Developmental Model (BDM)

The Bangladesh Development Model (BDM) is moving towards an age of economic sustainability from a state of poverty to enduring development based on the rising economic growth. The miracle of BDM can be analyzed within an integrative paradigm where the contributions and progresses of both public and private sectors are equally important. The policies of adoption, adaptation, adjustment, implementation, gender equality, microfinance, FDI, and others play a key role in eradicating extreme poverty. After independence almost 80 percent people lived under the poverty line; which was 56.7 percent in 1991 reaching 12.9 percent now. From 2000 onwards, the economy has been growing consistently at 6 percent per year on average. The economy expanded 7.11 percent last fiscal year 2015-16 which is higher than the estimated growth 7.05 percent, according to Bangladesh Bureau of Statistics.

However, the drivers which are constructing the BDM, pulling the country from poverty to development, based on growth include:

Human Capital: Human capital is the major driver of poverty alleviation leading towards sustainable development. Now the working human capital constitutes almost three times greater amount from the 1980s and 1990s due to qualitative changes in human demography. Also the recent demographic size of working women grows twice time from 1990. There are 78.6 million people in the workforce, including all sectors like garments, agriculture, manufacturing and the service sectors.

The number of workers in the RMG sector alone is 4.4 million at present. Between 2003 and 2013, women’s employment rose from 7 million to 17 million. Some 4 million women, mostly from poor rural areas, work in the RMG sector. The average age of most of the workers is below 40. Nearly 17.1 million people are involved in fish production, while animal farming has created job opportunities for around 6.5 million people (The World Bank, 2016: 9). Both qualitative and quantitative progresses are occurring in human capital development due to increasing enrollment, gender equity and quality in education, training, profession, projects; reducing infant mortality and fertility rates; reducing birthrate following national family planning strategies since 1980s (Birthrate- 1971: 6.9%, Now: 2.3%).

Agriculture: Agriculture has played a key role in reducing Bangladesh’s poverty from 48.9% in 2000 to 31.5% by 2010 with over 87% of rural people part of their some income from agricultural activities. Irrigation, high-yielding crop varieties, more efficient markets, and mechanization, enabled by policy reforms and investments in agriculture research, human capital, and roads have driven growth. Over 87 percent rural people derive at least some income from agriculture.

Source: The World Bank, Dynamics of rural growth in Bangladesh: sustaining poverty reduction, 2016

However, two thirds of rural households rely on both farm and non-farm incomes. The production of rice has increased three times in the last three decades initiating around 50 percent reduction of extreme poverty. Also the other agro-sectors like fish production, livestock products, poultry production, and so on are contributing to greater development of Bangladesh.

Industry: Bangladesh has achieved a tremendous growth rate in its industrial production. The economy comprises of a number of small and medium enterprises that make up for 25 percent of the nation’s GDP. In FY2009-10, the rate of growth of the share of industrial sector in GDP was 6.49 percent, while in FY2010-11, FY2011-12 and FY2012-13, the rate became 8.20 percent, 8.90 percent and 8.99 percent respectively. Industrial growth is estimated at 10.1 percent in FY2016, driven by growth in large and medium scale manufacturing and construction. Overall imports for the industrial sector grew about 6.5 percent in dollar terms, mainly due to import of capital machinery which grew by 14.1 percent. Power plants, Padma Bridge construction, flyovers and balancing, modernization, rehabilitation and expansion of industrial units, garments and textiles in particular, spurred capital machinery imports (World Bank, 2016: 10).

Increasing Purchasing Power Parity (PPP): In October 2015, the international poverty line was updated from $1.25 a day at 2005 PPPs to $1.90 a day at 2011 PPPs for most countries. Bangladesh was one of five countries which retained the $1.25 poverty line to calculate international extreme poverty rates, as the switch to the $1.90 line resulted in a significant change in the estimated poverty rate, warranting further analysis. The revised series of poverty rates are found to be significantly lower, such that the divergence between the number of extreme poor based on the national Lower Poverty Line (LPL) and the international extreme poverty line has nearly disappeared (World Bank, 2016: 1-2).

Export: In fiscal 1984-85, Bangladesh’s garment export was $0.12 billion and in fiscal 2015-16, the country’s clothing export was $28.09 billion. Notably the RMG sector produces around 81 percent export-oriented income alone. The export of garments can be singled out in this context. Total export as a proportion of GDP rose from 7.5 percent in fiscal year 1993-94 to 20.7 percent in fiscal year 2012-13 and the share of garments in total exports in the respective years rose from less than 45 percent to well over 80 percent. This industry contributes to poverty alleviation not merely by creating income-earning opportunities for the poor, but also by delaying marriages and reducing the family size of poor households.

Investment: A significant rise in public investment led to an increase in total investment in relation to GDP from 28.9 percent in FY15 to 29.4 percent in FY16. The increase in public investment is attributable to the government’ expenditure on infrastructure projects.

Unlike domestic private investment, FDI increased significantly (9.27 percent) from $1.8 billion in FY15 to $2 billion in FY16 due to an improvement in reinvestment in existing companies. FDI inflows in Bangladesh were directed mainly to manufacturing, trade and commerce related activities. “Foreign investment is split into three categories: equity, reinvestment of earnings and intra-company loan. Last fiscal year, equity capital or new investment declined 4.35 percent from a year earlier to $505 million. However, reinvestment of earnings edged up 1 percent to $1.15 billion. Intra-company loans more than doubled year-on-year to $344 million during the period (The Daily Star, October 24, 2016).”

Remittances and Reserves of Foreign Currency: Remittance, third largest sector of the country’s economy, makes a large portion of the country’s foreign currency reserves and a significant portion of it comes from workers living in GCC countries. Almost 8 million Bangladeshis are working in more than 150 countries now. Remittances help reduce poverty by increasing consumption as well as savings by poor households. Here again Bangladesh has made remarkable strides. During the period of 1990 to 2010, remittances grew by a compounded annual growth rate of 13.2 percent. In absolute terms, the amount of remittance was $761 million in the fiscal year 1989-90; it rose to $14,461 million in 2012-13. The growth was uninterruptedly positive in every single year during this entire period.

Despite significant overflow of migrant workers in both FY15 and FY16 remittances fell in FY16. The current decade is experiencing a dramatic rise in terms of foreign currency reserves exceeding $30 billion (till September, 2016: $31.3859 billion).

Social Security Paradigm: Social security programmes in Bangladesh are administered through numerous agencies, including many arms of Government, non-Governmental organizations, and international bi-lateral and multi-lateral partners in the following areas: Old-Age Allowance Scheme (3.15 million old aged people are getting this allowance), Allowance Scheme for Widowed and Distressed women (1.15 million), Rural Maintenance Program (RMP), Rural Infrastructure Development Program (RIDP), Test Relief (TR), Gratuitous Relief (GR), Vulnerable Group Feeding (VGF), Vulnerable Group Development (VGD) enjoying 10 million people now, Food Security Enhancement Initiative (FSEI), Programs for Acid Burnt Women and the Physically Handicapped, Funds to assist victims of natural disasters, Honorarium scheme for insolvent freedom fighters, Funds for retraining/reemployment of voluntarily retired or retrenched workers, and so on. In 2008 the social safety net program covered 13 percent of poor households, which has increased 25 percent in 2015. Also the current government designed some effective social security programs- ‘One House One Farm’ project, National Social Security Strategy 2015, Household Database project, National Urban Health Strategy 2014, Seventh Five Year Plan- in order to ensure greater social security based on social justice, equity, inclusiveness, and rule of law.

Developmental Visions: The Perspective Plan provides the road map for accelerated growth and lays down broad approaches for eradication of poverty, inequality, and human deprivation. Specific strategies and the task of implementation will be articulated through the two five-year plans: Sixth Five Year Plan (2011-2015) and the Seventh Five Year Plan (2016-2020). The expectation is that by 2021, the war against poverty will have been won, the country will have crossed the middle income threshold, with the basic needs of the population ensured. Along with higher per capita income, Vision 2021 lays down a development scenario where citizens will have a higher standard of living, will be better educated, will face better social justice, will have a more equitable socio-economic environment, and the sustainability of development will be ensured through better protection from climate change and natural disasters. The associated political environment will be based on democratic principles with emphasis on human rights, freedom of expression, rule of law, equality of citizens irrespective of race, religion and creed, and equality of opportunities. The development priorities also include ensuring effective governance and sound institutions but creating a caring society; addressing globalization and regional cooperation; providing energy security for development and welfare; building a sound infrastructure and managing the urban challenge; mitigating the impacts of climate change; and promoting innovation in a knowledge-based society along with the vision of ‘Digital Bangladesh’ based on information and communication technological development and integration.

Also the government has given top priority to the ten fast-track mega projects estimating total cost of $43.60 billion, an amount more than $2.3 billion has been set aside from the national budget of 2016-17 specifically for their speedy implementation. These projects are Padma bridge project, Padma bridge rail connection, Deep seaport at Sonadia, Payra deep sea port, Metro Rail project in Dhaka, 2400 MW Ruppur Nuclear Power Plant, 1320 MW Rampal Thermal Power Plant, 1200 MW Matarbari Coal-Fired Power Plant, Cox’s Bazar rail road and LNG gas terminal for importing liquid gas. These projects would reshape the country’s economic outlook, improve communication and accelerate GDP growth.

Source: The Financial Express, June 3, 2016

Indeed, the country is visualizing the ‘Vision 2030’ in order to initiate a sustainable developmental order achieving zero poverty rate and ‘Vision 2041’ to merge its sectorial developmental initiatives and socio-economic diversification for constructing the ‘Golden Bengal’ based on holistic sustainability.

Developmental Challenges of Sustainability

Retaining Growth: The major developmental challenge for Bangladesh is that how the country is going to manage its rising growth rate. According to the growth model of W. W. Rostow, the BDM holds its position in the ‘take off’ stage; because the country is observing huge progress in industrialization and trading economics along with a decaying agricultural order. But it is going to face enormous challenges to achieve a matured economic order and the age of high mass consumption because achieving 8 percent to 10 percent is not an easy task by diversifying and distributing the projected growth equally. The weak recycling policies of growth and resources within the monetary and fiscal affairs, and limited usage of efficient and expert human resources for sectorial development are the Achilles heel for a sustainable economic order.

Distribution of Growth: Most of the global economies including Bangladesh are facing huge challenges regarding just distribution of growth causing microeconomic inequality but having booming macroeconomic success. Even our industrial, RMG and service sectors are expanding and contributing a lot in the consecutive GDP growth though income gap and purchasing power parity among the socio-economic classes are increasing with the same pace. In the RMG sector the owners and shareholders are earning and contributing a lot but the salary level and livelihood style of the workers remain very low as before. Socio-economic, politico-cultural and technological gaps between urban and rural society are widening day by day. Bangladesh might not be a sustainable economy if she is not going to strategize her distribution of growth based on justice and equity.

Diversification of Economy: Diversification of economy could play a pivotal role in the structural transformation of the economy from producing low value-added products to high value-added products. However, strategies and policies for economic and export diversification lack clear guidelines as regards to implementation. In case of export diversification, it has been a matter of serious concern that though there are significant incentives provided to the export sector in Bangladesh, there is formidable difficulty in actually accessing such incentives and they helped little in diversifying the export basket. Furthermore, though the latest industrial policy identifies a number of high priority and priority sectors for economic diversification, there are several policy-induced and supply-side constraints that have constricted the development of these sectors.

Unless and until these policy-induced and supply-side constraints are addressed, the agenda for further productive economic diversification will remain unfulfilled. Major supply side constraints include poor physical infrastructure, inefficiencies at ports and related internal road transportation, lack of investment fund and working capital, high interest rate, shortage of skilled workers, technological bottlenecks, lack of entrepreneurial and management skills, and very high invisible costs of doing business.

Environmental Sustainability: Bangladesh is one of the most vulnerable countries that is facing immense challenges due to climate change. Its geophysical position coupled with highly dense population, limited resources and dependence to nature makes Bangladesh a hazard-prone country with many subsequent catastrophic events like irregular rainfall patterns, floods, flash floods, cyclones, saline intrusion, drought, sea level rise, tidal surge and water logging. Increasing temperature will affect agriculture production threatening the hard earned food security the country now enjoys.

Increasing sea level may permanently submerge large tract of flat coastal land forcing large scale migration. A 45 cm rise in sea level will not only affect the vast coastal ecosystem and hamper agriculture and food production, it has the potential to dislocate about 38 million people from 20 coastal districts. The poor are the most affected by the climate extremes and have very little capacity to cope with the risks. The country has gained considerable experience and repute in management of disasters over the years, and this would be a key challenge for sustainable development in Bangladesh.

Energy Security: Energy is one of the primary drivers of economic growth and sustainable development. Lack of coverage and quality of energy supply is one of the key barriers to development of both industry and agriculture sector. In order to meet the present and future challenges, power and gas facilities should be expanded and alternative sources of power should be developed.

Accountability, transparency and modernization in the management of the power and gas sector need to be ensured. Illegal electricity connections have to be severed and system loss has to be minimized.

As a strategy for sustainable development of energy sector development of renewable energy, which is less polluting, will be emphasized (National Sustainable Development Strategy 2010-21, General Economics Division, Planning Commission of the Government of the People’s Republic of Bangladesh, p. 28).

Mal-governance and Corruption: Now mal-governance and corruption have become major issues in political and economic significance in developing countries like Bangladesh undermining the state institutions, norms of democracy, ethical values, and justice and jeopardizes sustainable development and the rule of law. As the core focus of BDM is to accelerate infrastructural development rapidly, the possibilities of mal-governance and corruption within the administrative organs and developmental partnerships could be major threats for Bangladesh’s developmental dream.

Merging Development with Democracy: In broader sense sustainable order highly depends on how the state is going to merge its developmental activities with democratic norms and values. Theoretically ‘sustainable development’ is perceived to bring holistic change encompassing economic, social and political aspects in order to merge development with democracy and ecology. But Bangladesh’s present stance of ‘more development and less democracy’ is going to construct an unequal order between economy and politics. If the state is not going to merge development with democracy then the macroeconomic unequal distribution might cause urban-rural, rich-poor and private-public contribution, allocation and consumption gaps.

Geo-economics and Balancing Priorities for Bangladesh: The greatest developmental dilemma is that how Bangladesh is going to balance its geo-economic priorities in the near future. Because the global great powers- the USA, China, India, Japan, Russia and others- are trying to invest and cooperate in the infrastructure, transport, railway, power development, port construction and energy based projects for fulfilling their geopolitical and strategic ambitions. The recent politics regarding deep sea port construction in Sonadia, Payra and Matarbari has also created a global power rivalry where China’s ‘One Belt One Road’, USA’s ‘Asia Pivot’, India’s ‘Cotton Route’ and Japan’s ‘Strategic Posture’- centering the Bay of Bengal narrowly and the Indian Oceanic trade routes and strategic maritime locations broadly- have created a decision making dilemma for Bangladesh in order to initiate strategic cooperation with any of these powers.

The recent visit of the Chinese president Xi Jingping capitalizing the shift of Sino-Bangladesh relations from ‘economic partnership’ to ‘strategic partnership’ provides Bangladesh more importance in the geopolitical power projection paradigm. In India’s ‘South Asian Order’, Bangladesh is the most pivotal player and regional-bilateral development partner initiating Indian diplomatic psyche to involve any kind of political, social, cultural, ethnic, economic venture with Bangladesh. Also the recent ‘Brexit’ dilemma reduced 5% export (FY 2015-16) loosing almost $90 million because Britain is the third largest global sources of Bangladeshi RMG exports along with a huge labor market.

Conclusion

Since the beginning as a nation-state from 1971 Bangladesh has been tackling its socio-economic challenges in remarkable ways. It has overcome meager resources to make the most of its strong cultural and intellectual tradition and a national will to build a prosperous nation following Independence.

Economic liberalization in Bangladesh has achieved tremendous progress in terms reducing extreme poverty, changing its agro-based economy into industry and service-based order, achieving some shining successes in MDGs and journey towards sustainable development, and using its geo-economic as well as geo-strategic strengths. But Bangladesh’s sustainable developmental dream highly depends on how the state is going to visualize its challenges of developmental sustainability.

If the state follows the pathway of economic development only without ensuring linear political, social and cultural development then the visions of sustainable development will be a far cry. In a nutshell, Bangladesh Development Model has already achieved huge successes in pulling the country from poverty to developmental pathway; but the future sustainable developmental projection clearly depends on a greater integration and consensus among economic, political, social, cultural, ecological, central-local, developmental partners, NGOs and civil society actors.

*Abu Sufian Shamrat is a Researcher in Bangladesh who writes on contemporary issues. He can be reached at: shamrat08du@yahoo.com

Punjab has been declared as the overall best state in the country by India Today news magazine for the third conjunctive year. While this is positive new, critics note there is another side of the picture  that suggests destruction is fast engulfing this land of “five waters”

“It is a Water-Chaos in the Punjab,” according to Dr Gursharan Singh Kainth, Director of Amritsar based Guru Arjan Dev Institute of Development Studies.

Kainth was speaking as a panelist at a workshop on Water Governance and Water Diplomacy organized by South Asian University New Delhi in collaboration with World Wide Funds for Nature (WWF India) and CITP New Delhi at Chandigarh on February 27 and 28, 2017 to highlight critical water governance issues in the Majha region of the Punjab state.

There is a need for new crop management policies, added Dr Kainth. There should be a policy for both crop planning and management at micro level for each agro-climatic zone. According to Dr Kainth, this should be done keeping in mind the availability of water in the hydrological basins. Also the marketing strategy for produce of each crop should be planned so that farmers are assured of maximum returns from the produce – seeds should also be made available for the planned crops, again keeping in view the overall availability of water.

Many actions would be required to be taken both within and among the basins states to avert the crisis. Supply and demand management aspects have to be analyzed for an effective strategy and to provide a set of concrete solutions. These include adoption of techniques for augmenting water availability such as water conservation and pollution prevention, improving water use efficiency recycling and revise of drainage water. Adopting more intensive water saving technologies, changing crop patterns etc would reduce the demand on water.

Hundreds of women farmers in rural Karnataka, India have been able to improve their lifestyle, both in terms of health and finance simply by using a measured amount of water in their cultivation, which has brought down pest attacks on their fields and thereby have stopped their dependence on pesticides.

This has happened with the intervention of SAMUHA, a Karnataka based organization working on various sustainable and development related issues, under a SAMUHA-Hindustan Unilever Foundation (HUF) project.

With a measured use of water in the agricultural fields, incidences of pest attacks have decreased and has paved the way towards Non-Pesticide Management (NPM) farming.

“After we stopped using pesticides in the agricultural fields, we received health benefits, as incidences of illness dropped sharply,” said Savithremma, a 26-year-old woman farmer from the Mustoor village in Gangavathi taluk of Karnataka.

Elaborating, she said that they used to apply the synthetic fertilizer Phorate in their agriculture fields —and used to apply 2 times in their 2 acres of cultivable land, and applied 5-10 kgs per acre.

She said that this used to cause health problems such as headaches and fever.

“Also since I and many like me used to work in the agricultural fields after chemical fertilizers are applied, ulcers used to be formed on our toes and used to cause a lot of problems,” she said.

However now that problem has disappeared, and she said she doesn’t have to go to doctors anymore, meaning she has been able to cut down on her medical expenses.

“Earlier I had to spend almost Rs. 1500 or so on doctors consultation fees and medicines in a season, but now that money is saved. This is a big relief for us,” she said.

She also said that after shifting to NPM farming, another benefit has been for the domesticated cattle belonging to the farmers.

“We are now able to feed the grass and weed from our fields directly to our cattle as those now no longer contain chemicals,” she added.

Women farmers such as Savithremma started benefiting in this way, after SAMUHA under the HUF project started to make farmers aware about NPM farming, and how to use of lesser water in agriculture to ensure that their cultivation were not attacked by pests.

SAMUHA, under the project, is running the Field Irrigation Channel program to ensure the efficient management of water, non-pesticide management in paddy crops.

Officials of SAMUHA have pointed out that this project has ensured several benefits for the farmers and one area has been regarding the improvement in the health of the women farmers and laborers.

SS Ghanti, a senior official of SAMUHA, said that earlier pesticides were mostly applied to get rid of the pests –Brown Plant Hopper (BPH), Stem borer, Leaf folder and Case worms.

“These pests have already come down to a great extent by using less and measured amount of water, and for this the farmers don’t need to use pesticides. Slowly many are starting to give up pesticide use and shift to NPM farming,” said Ghanti.

Another women farmer, Hanumanthi has also managed to reap similar benefits. A farmer from the Mundaragi village, Hanumanthi said that she also used to face a lot of health problems after working in the field as chemical fertilizers were used.

However after the concept of NPM farming started 5 years ago, life has changed for her.

She also works for other farmers on a daily wage basis.

“Earlier I and the other women farmers used to face problems including respiratory diseases, burning sensation, giddiness, and we had to rush to doctors very often. However that has changed now, we no longer have to visit doctors for these problem—which used to arise as a result of use of synthetic fertilizers,” she said.

Hanumanthi, who lost her husband over 10 years ago and is bringing up her two children on her own, was always worried about not being able to save enough.

“Now after turning to NPM farming—I don’t fall ill and so I don’t lose out on wages, and apart from that I am able to save over Rs 1500 per season, which I earlier used for medical expenses. Besides this now I am able to save more than Rs. 4000 a season as I don’t use chemical pesticides anymore,” she said.

“I am able to save additional over Rs. 5000 a year now,” she added.

Hanumanthi said that now she is getting a two way benefit—both in terms of health and wealth.

*Amarjyoti Borah is a journalist based in India and writes on issue of environment, climate change, agriculture and sustainable development.