Welcome to rascott.com
This is a
personal site that reflects my interests in news,
current affairs, aviation and travel.
email me:
robert@rascott.com
Home Up
Now In Dubai:
Scott
Consulting
Photo Albums
My photographs have been moved off this site and are now stored on Picasa. They
were simply taking up too much space on my web host.
Please use
this link to see my list of photo albums.
Some
Useful links:
Information:
World Time
Clock
Exchange Rates
Journalism:
ForeignPolicy
Nationsonline.org
Project Syndicate
Amnesty International
Reporters w/o borders
The Guardian
BBC World News
CNN Asia
Bangkok Post
Daylife.com - news
Gulf News
Arabian Business
World News
WSJ - Asia
SCMP
Good causes:
Sister
Joan - Bangkok
Regional Info:
BKK Magazine
HK Magazine
In
Singapore Magazine
TimeOut Dubai
Back in the UK:
Newton Ferrers
And for fun:
Lin Ping live panda tv
EarthCam
History
BBC Archive
National Media
Museum
The British Library
Imperial War Museum
There are many other links on my
AOB blog page.
| |
Qantas and Emirates launch their alliance
31 March 2013
Pictures of the Sydney flypast are here.
Qantas and
Emirates marked the official launch of their partnership today with two
A380s flying in tandem over the Sydney Harbour Bridge.
The planes flew over the bridge at about 1,500 feet (450 metres).
The planning was
complex and included seeking approval from safety regulators in both
Australia and the United Arab Emirates."
Pilots from both airlines completed dozens of special simulator training
sessions since January.
The aircraft took off from Sydney airport early Sunday, flying north along
the coast, then south and slightly out to sea, before turning and cruising
over the city, passing the Opera House and flying over the Harbour Bridge.
Qantas says that it has moved its hub for European flights from Singapore to
Dubai, ending a decades-long partnership with British Airways on the London
route.
But it is not
really a Qantas hub. Two planes a day fly from Australia to Dubai and
continue to London. What the alliance does offer is one stop travel via
Dubai to multiple points in the Middle East, Europe and Africa; but this
will be a Qantas codeshare using Emirates hardware and crews.
The impact
has been significant already. Qantas says bookings for trips to Europe have
gone up six-fold.
The tie up should be worth about $90 million a year before tax to Qantas, as
it fills more seats on combined flights to Europe, New Zealand and Southeast
Asia and drops the unprofitable Frankfurt service, according to an analyst
at Goldman Sachs.
The upside for Emirates is the increased passenger flow to its worldwide
network.
The airlines describe this as a seismic shift for the industry. It is not.
It is a recognition of the strength of the middle east carriers and their
geographical hubs.
And despite all
the rumours running around the Dubai HQ of Emirates it is just two airplanes
a day from Australia. And no, there will not be QF staff on EK flights or
vice versa.
Dubai Gears Up
For Next, More Modest Boom
30 March 2013
Reuters
Four kilometres off the coast of Dubai, more than 200 tiny, man-made islands
bake under the sun. Built five years ago, they were to be one of the
emirate’s most spectacular projects, an archipelago of resorts and luxury
housing laid out in the shape of a world map.
Apart from a few facilities such as a villa and a beach club, the islands
are empty. After creating them at a cost of hundreds of millions of dollars,
state-owned property firm Nakheel sold about 70 per cent of the land. But
most of the buyers have lacked the cash or the will to go ahead with
development plans.
A little over three years after a corporate debt crisis drove it to the
brink of default, Dubai is still littered with relics of the disaster, in
the form of unfinished real estate projects and battered balance sheets.
But it is laying the groundwork for another economic boom, based on its role
as a tourism and business hub for the surrounding region, and a haven for
money from India, China and fast-growing countries in Africa.
The next boom is likely to be more gradual, partly because financing will
not be as cheap and plentiful as it was during the excesses of the last
decade. Growth will depend more directly on services that Dubai provides,
rather than on the ability of its real estate market to suck up money.
But in some ways, the next boom could rival the last one, boosting Dubai’s
population about 50 per cent by the end of this decade and pushing it deeper
into a range of industries, from food processing to diamond trading.
Florence Eid, chief executive of London-based research and advisory firm
Arabia Monitor, said some aspects of Dubai, such as its role as a relatively
safe financial centre, were set back by the crisis and shown to be weaker
than assumed.
“But some have actually been strengthened in the last few years, including
its role as an operating base for businessmen from around the region and as
a centre for entrepot trade, which it has enjoyed since the pearl fishing
and spice trading days of the Arabian Gulf,” she said.
“The economy now appears to be embarking on another wave of growth during
which it will serve similar functions as Hong Kong and Singapore in Asia,
supporting and profiting from growth in industry and trade in a large region
surrounding it.”
Dubai’s expansion plans are striking in that they are being announced while
the emirate is still many years away from working through the debt pile it
accumulated during last decade’s boom and bust.
Standard Chartered estimates $48 billion of bonds and loans will mature
between 2014 and 2016, including about $10 billion of restructured debt at
state-owned Dubai World and Nakheel. Some of this debt might have to be
restructured a second time, the bank said in a research report.
In December, Moody’s Investors Service downgraded its credit ratings of
three Dubai banks, including the largest, Emirates NBD. It cited concern
about problem loans and said it was prepared to cut the ratings further.
But Dubai’s ruler, Sheikh Mohammed bin Rashid al-Maktoum, signalled a push
for growth in November, announcing plans for a huge tourism and retail
development including the world’s largest shopping mall, over 100 hotels,
and a park 30 per cent bigger than London’s Hyde Park.
Since then a string of state-owned and private firms have said they are
reviving projects mothballed during the crash or launching new ones. Plans
even include more man-made islands: last month state-backed Meraas Holding
said it would spend $1.6 billion to build an island housing the world’s
largest ferris wheel, just a few kilometres from Nakheel’s archipelago.
Hotel industry consultancy STR Global estimates, based on its contacts with
companies in the industry, that Dubai hoteliers plan to add 19,000 new hotel
rooms in the next few years – almost a third of the current number of about
63,000.
The government’s central projection is for the population to rise above 3
million people by 2020 from just over 2 million at present. Under an
“aggressive” growth scenario, the population could be near 4 million by the
end of the decade, it estimates.
Since fewer than 20 per cent of Dubai’s population are local citizens – the
vast majority are expatriate workers – such growth would mean an influx of
hundreds of thousands of people.
Construction work to accommodate them would require billions of dollars of
fresh financing that may be hard to obtain in the wake of the global
financial crisis. If growth does accelerate, it could produce the same kind
of boom-and-bust cycle that plagued Dubai a few years ago.
“There are certainly legitimate questions to be asked about investment risk
in Dubai, given the wild swings in the property market and the boom period’s
long record of broken promises, which extend to the highest levels,” said
Jim Krane, author of the book “City of Gold: Dubai and the Dream of
Capitalism”.
But there are grounds to think Dubai’s ambitions are feasible – or at least
a large part of them. One of the emirate’s advantages is its geographical
location, which lets it serve as an air transport hub between Asia, Europe
and Africa; Dubai overtook Hong Kong to become the world’s third-busiest
airport for international passenger traffic last year.
Double-digit annual increases in this traffic, which hit 58 million
passengers last year, are helping Dubai attract growing numbers of tourists
and investors. About a fifth of passengers leave the airport and come into
the city; local industries are lobbying the government to raise this ratio
with changes to visa arrangements and other steps.
“The way Dubai has worked in the past few years, they’ll create enough
demand generators to make sure they have customers for the new hotel rooms,”
said Naureen Ahmed, manager of analysis at STR Global.
Taxes in Dubai are lower than in many European and Asian cities. This helped
boost foreign direct investment flows into the emirate by 17 per cent last
year – a rapid rate during a period of global economic weakness.
The more difficult financing environment since the global crisis could also
benefit Dubai in a way, by preventing the wild investment that characterised
the last boom.
With loans harder to obtain, real estate developers are likely to be forced
to build their projects in stages, ensuring each stage is viable before
moving to the next one.
This may mean some of the projects announced in the last several months are
delayed for many years, or never built at all – but the overall effect could
be to support Dubai’s growth by making the economy more stable.
Loic Pelichet, assistant vice president for research at regional investment
firm NBK Capital, said one factor in Dubai’s investment decisions would be
whether its bid to host the World Expo 2020 is successful. A decision on
which country will host the fair is expected this year; local officials have
estimated the event could draw 25 million visitors to Dubai.
Iyad Malas, chief executive of local shopping mall and hotel operator Majid
Al Futtaim, said Dubai’s development would depend on two things: tourist
numbers and population growth.
At some point, growth in the air travel industry will slow, affecting the
whole economy through the retail and hospitality industries. But the emirate
is not close to reaching that point, so its ambitions are reasonable, Malas
said.
“You have to have a vision that is ambitious. If I set the target high and I
hit 75 percent of it, I’m happy. If I set it low and achieve it year after
year, I will never have strong growth.”
Thailand's spoiled rice
30 March 2013
Reuters
Thailand is set to
sell 500,000 metric tons of rice on world markets at a loss as it scrambles
to offload a record stockpile deteriorating in warehouses filled with grain
bought under a government program.
The two-year-old policy of paying farmers more for rice than it is worth on
international markets is straining the country’s finances, has cost Thailand
its spot as world’s top exporter of the grain and has provoked concern at
the World Trade Organization.
Although officials publicly deny that the politically sensitive effort is in
a crisis, the government is looking at measures to stem ballooning losses
that so far are estimated at $6 billion.
A Thai official also said this month that the government might cut the price
it pays to a level closer to the value of rice in international markets,
prompting an angry response from farmers. Bangkok may also stop buying
lower-quality strains of the crop.
Rival producers like India and Vietnam, which have stepped into the vacuum
caused by the exit of Thai exporters from the market, are watching closely
in case Thailand dumps millions of tons of rice onto well-supplied world
markets, causing prices to slump.
In questions brought before a World Trade Organization committee this week,
the United States again challenged Thailand to explain how it planned to
dispose of the rice.
Government stockpiles are estimated at a record 17 million metric tons of
milled rice, nearly twice what Thailand used to export each year before the
program was implemented two years ago.
An unraveling would be politically costly for Prime Minister Yingluck
Shinawatra, given that the program helped her win millions of rural votes
when she was elected in 2011.
Farmers say payments have been delayed, with the state bank running the
program complaining that it has received only a fraction of the funds
needed.
“The government might have run out of money. I’ve had to wait for two
months,” said Prasert Chamsopa, 66, a farmer in the rice-growing province of
Suphan Buri who had sold 35 tons from his paddy to the government.
According to the agricultural cooperative in the province, which is north of
Bangkok, more than 1,000 farmers have experienced similar problems and were
getting ready to stage coordinated protests with farmers in other provinces.
That leaves the government in a bind: It is committed to buying yet more
rice, which it has no room to store and which it is unable to sell without
suffering a huge loss.
One grade of Thai rice was offered at $545 per metric ton this week, down
from $570 early this year but still above offers for the same grade from
India of as much as $450 per ton and from Vietnam of about $400 a ton.
A Commerce Ministry official said that Thailand planned to release as much
as 500,000 metric tons from older crops onto the market by April, and that
the sale would be based on market prices.
“We accept that some of the rice is from the previous crop, which is quite
old and the quality is not very good, so it’s impossible to ask for very
high prices,” said Thikumporn Nartworathus, deputy director of the foreign
trade department of the Commerce Ministry, adding that it would be sold via
a tender or government-to-government deals.
Traders and industry officials say the government will suffer big losses if
it sells now with plentiful supplies available from India and Vietnam and
with the baht hitting a 16-year high this month, making Thai rice more
expensive in dollar terms.
The intervention program, criticized by academics, economists and the
International Monetary Fund, is coming under increasing global scrutiny.
At the WTO’s agriculture committee meeting this week, Washington asked
Thailand to say whether stocks were being exported or used domestically.
In questions seen by Reuters, the U.S. delegation said Thailand had
previously said that data on the program, including figures on rice exports,
were on government Web sites, but that the data had been discontinued.
A potential trade
complaint is unlikely until Thailand responds formally, but Australia,
Canada and the United States urged Bangkok to reply promptly. The European
Union also said that it was concerned and that Bangkok needed to say clearly
how it would release stocks.
The Thai government is paying 15,000 baht, or $513, per metric ton, so
export prices are as much as a third higher than those for equivalent grades
from India or Vietnam. That explains why, for the first time in three
decades, Thailand was not the world’s biggest rice exporter in 2012.
In early March, the Thai Commerce Ministry tested the waters by suggesting
that the government could stop paying the high price for rice.
The reaction in the countryside was immediate and angry. The Thai Farmers
Association threatened to take thousands of farmers to Bangkok to protest.
The Commerce Ministry said the government might also consider no longer
buying 18 varieties of fast-growing rice of lower quality, which farmers
have used to squeeze in more crops to cash in on the intervention program.
The government is running short of properly equipped warehouses, and even if
the rice is stored in good conditions, its quality could start deteriorating
after a year or two.
Commerce Minister Boonsong Teriyapirom said in October that 7.3 million
metric tons had been sold in government-to-government deals, but the foreign
countries he named have not confirmed that, and exporters have seen no port
activity to back it up.
Samarendu Mohanty, a senior economist at the International Rice Research
Institute, based in Manila, said that while rice consumption in 2013 should
remain strong, global rice prices would fall if Thailand unloaded its
stocks.
Kiattisak Kalayasirivat of Novel Agritrade warned that prices could drop by
$20 to $30 per metric ton if Thailand sold stocks, although demand from
Africa or China would probably provide support.
Industry officials say something will have to give.
“The government can’t go on with this scheme, and it needs to adjust things,
otherwise it could mean a collapse of our fiscal stability, affecting each
and every taxpayer,” said Vichai Sriprasert, honorary president of the Thai
Rice Exporters Association.
The rebirth of Don Muang
28 March 2013
Bizarre.
The Airport of Thailand public company has announced that it will allow all
airlines to use Don Muang international airport again.
This is the
airport that was closed in 2008 when the new Suvarnabhumi airport was
opened.
First it was Close
down DM
Then it was open
DM to budget airlines
Now it is open DM
to anyone including international Airlines.
The decision was made by the airport company's board of directors, and will
have to be approved by the Cabinet, as 70 per cent of the company's shares
are still owned by the government.
The company has revealed that airlines in the One World group, led by Hong
Kong-based Cathay Pacific airway, has expressed interest in using Don Muang
airport.
The airlines group also suggested that Don Muang airport be expanded to
allow for giant Airbus A380 aircrafts to land and take off from there. Now
that would be a sight. A trip to the golf course would be so much more
entertaining that watching a few AirAsia A320s.
Don Muang airport is currently operating as an airport for budget airlines.
The decision will turn it into a full-service airport.
Bangkok's main international airport, Suvarnabhumi, has the capacity of 45
million passengers per year. Now it is handling over 51 million passengers
per year.
The Airport of Thailand expects Don Muang airport to ease the crowding
problem at Suvarnabhumi while the country's number one airport is being
expanded to allow it to handle 60 million passengers by 2017.
Of course what
they should have done is expand Suvarnabhumi to three runways and at least
70 million passenger capacity. The problem was that the new airport opened
with only a fraction more capacity than the old airport that it replaced.
Qantas Emirates
alliance gets approval but hardly a ringing endorsement
27 March 2013
The Australian
Competition and Consumer Commission has given the final go-ahead to Qantas's
global alliance with Emirates, and ACCC chairman Rod Sims has imposed only
one condition - the airlines must maintain the services they are currently
running across the Tasman Sea to New Zealand. They account for about two
thirds of the total passenger capacity on the route, and Mr Sims wants to
ensure that services are not cut back.
The
ACCC press release is here.
The alliance also
has just a five year initial approval. But both airlines will look different
in five years so will likely welcome the opportunity to re-assess the
relationship.
The thing to
remember here is that the ACCC exists to protect the Australian consumer; it
does not exist to protect Qantas or to safeguard jobs in the airline. The
ACCC has acted to ensure competitive choice. It is not responsible for
Qantas imploding on the routes to Europe by giving away customers to
Emirates.
The ACCC says that the deal offers "material but not substantial" public
benefits, including increased access to flights and destinations, improved
connectivity and flight times and a merged frequent flyer programme.
Not exactly a
ringing endorsement. Mr Sims said while the watchdog believed travellers
would benefit from the airlines' alliance, it dismissed Qantas' claim that
its international arm would suffer if the tie-up with Emirates was not
allowed to go ahead.
So what does it
all mean? Qantas immediately expands the number of destinations it offers.
Except that you will be flying on an Emirates jet.
Travellers to
Europe from Brisbane, Adelaide and Perth will all fly on Emirates to Europe.
Qantas has effectively given up on those routes to focus on Asia. But this
is a deal which means that from Sunday Australians who used to choose Qantas
to fly to London from Brisbane, Adelaide and Perth by changing between
Qantas flights at Singapore’s Changi Airport are now being ‘expected’ to fly
Emirates all the way.
This is a huge giveaway by Qantas, and may be seen as a slap in the face for
loyal customers not readily served by the remaining Qantas flights to London
via Dubai from Sydney or Melbourne, which will both have a daily QF A380
each way.
As the ACCC has noted on several occasions since the deal was proposed,
there are amply competitive alternatives to Qantas and Emirates on the
routes to London and Europe, and, to summarise, it is a competition
authority, not a Qantas preservation agency.
Qantas will fly a daily A380 from Melbourne and Sydney to Dubai. These
flights connect to Emirates flights to the Middle East, Africa and Europe.
The airplanes both continue onto London. For now. I can see that changing in
future. Seven A380s a day from Dubai to LHR is a lot of seats.
Qantas argues that
the benefits of the deal are already clear. Early booking data suggests
bookings into Milan are 17 times higher than they were a year ago; bookings
into Barcelona are 12 times higher and Manchester has come from nowhere to
be the second-biggest destination in the expanded European destination
schedule.
Qantas's domestic
airline is also getting a boost from booking onto domestic flights by
Emirates. In the past month Emirates has booked more than 5000 sectors.
Qantas's old alliance partner, British Airways, booked 1600 Qantas sectors
in all of last year.
Though the ACCC does not have a responsibility for the success of Qantas the
company is aiming to get the international business into profit by 2015. It
may happen quicker.
On Sunday 31st a celebration flight jets out to Dubai along with journalists
and VIP guests including Transport Minister Anthony Albanese, Emirates
president Tim Clark and infrastructure and transport department secretary
Mike Mrdak. Four flights are scheduled - one from Melbourne, one from Sydney
and two from London. All arriving in Dubai on 1 April.
Don't kiss, don't swear: rules of a Dubai stopover
27 March 2013 The Melbourne Age
If you really want
to know how others see the city that we live in here is a example. With
Qansta starting its flights thorugh Dubai on 1 Aprili the Melbourne Age
gives a rather austere view (IGuess they have never been here) of what may
and may not be done in Duabi.
But don't just read the article - head online and look at the comments that
have been generated!
"Australians travelling through Dubai have been warned they are at risk of
fines or jail for cultural misdemeanours as simple as holding hands in
public, swearing, harassing women with a prolonged stare or wearing
inappropriate clothing.
''Just one person needs to take offence and to make a complaint and you can
be in serious trouble and be held in custody for a long time if you
challenge the charge,'' said Radha Stirling, founder of the non-profit
organisation Detained in Dubai, which helps people in legal difficulty in
the United Arab Emirates.
Qantas will enter a partnership with Emirates this Sunday that will result
in its flights to Europe being routed through Dubai instead of Singapore.
The Department of Foreign Affairs and Trade warns on its website that de
facto relationships, homosexual relationships and acts of adultery and
prostitution are subject to severe punishment.
''It is also against the law in the UAE to share the same hotel room with
someone of the opposite sex to whom you are not married or closely
related,'' DFAT cautions. ''These laws apply to residents as well as
visitors.''
Drinking in public or being drunk in public is another offence that can land
travellers in strife. Australian travellers of Jewish background who are
Israeli passport holders can only transit through Dubai and are not allowed
to leave the airport because the UAE is a participant in the Arab League
boycott of Israel.
"Qantas has said that Jewish and Israeli passengers will be safe transiting
through Dubai, provided they don't leave the airport,'' Ms Stirling said.
''But what happens in the event of a catastrophe or severe weather when
airport hotels are full?''
The partnership with Qantas and Emirates comes into effect on March 31, and
will result in more Australians in Dubai than ever before, adding to the 50
million people -- including 2 million Aussies -- who already pass through
there each year.
''While this is a new hub for Qantas, many Australians are already familiar
with it,'' a Qantas spokesman said.
''Different rules apply in many of the countries we fly to, which is the
very nature of international travel.
''We encourage all our passengers - whether they are travelling to Asia or
the US or the UAE - to check the Australian government's Smart Traveller
website so they are fully informed of local laws and customs before they
board our aircraft,'' the spokesman said.
Qantas has been providing cultural training for its staff before the
alliance with Emirates, advising that customer issues with UAE passengers
may be best solved by a man.
''Don't take offence, don't continue to try and sort something out, simply
hand it over to a male colleague. It doesn't matter whether you are the
manager or supervisor, the fact that he is male will make all the
difference,'' is the advice.
Laurent Chaudet, the general manager of the Pullman Mall of Emirates hotel,
said: ''Australians might think of Dubai as an ultra-modern destination, but
they need to remember that it is a Muslim country with traditional values.
''The simple advice would be to wear respectful clothing, avoid drunkenness
and use of foul language, and respect the culture of the people here.''
Paul McGrath, the managing director of Australia's largest independent
travel company Creative Holidays, is enthusiastic about Dubai coming on to
the radar with the Qantas/Emirates alliance.
He said 40 per cent of people booking Europe trips with the company already
stop over in Dubai for an average of four days on the way back.
Mr McGrath rates Dubai for its diversity, from shopping to desert
experiences.
''I'd say that people just have to be conscious and mindful of the cultural
differences. Be aware and be informed and there really isn't that much of a
problem. They are lovely people, gracious and gentle ...''
Several tourists and expatriates have run afoul of conservative rules in the
UAE in recent years.
In 2010, a British couple were arrested and sentenced to a month in jail for
kissing in public in Dubai.
In 2009, an Australian man was arrested for allegedly saying “What the
f---?” to a plainclothes police officer who grabbed his arm at Dubai
Airport. He was forced to remain in Dubai for months before being let go
with a fine.
In the most prominent case, a British couple were jailed for three months in
2008 after having drunken sex on a public beach.
Two Emirati women started an online campaign last year, called UAE Dress
Code, urging foreigners to respect local sensitivities and not dress
provocatively.
DUBAI RULES
The drinking age is 21. Drinking in public or being drunk in public are not
tolerated.
Offensive language, spitting, aggressive behaviour and smoking outside
designated areas are not tolerated.
Public displays of affection such as holding hands or kissing are not
tolerated.
It is customary for men to shake hands however Emirati women tend not to
offer their hands to men.
Men should avoid staring at local women or attempting to make eye contact.
During Ramadan while Muslims are fasting from dawn to dusk, non-Muslims can
only eat and drink in screened-off areas in many hotels and restaurants.
Wear respectful clothing. Swimwear is appropriate by the pool or on the
beach but frowned on elsewhere. Low-cut dresses or tops, short skirts and
short dresses are not recommended in public.
Men should wear a T-shirt or shirt at all times.
*Source: Dubai Department of Tourism and Commerce Marketing."
Why the Cyprus
bail-out will fail
26 March 2013
The Economist
below describes the Cyprus bail-out as better but painful.
But what the
commentary misses is that the country has been left in a near - impossible
situation by the terms of its rescue, and is likely to require another
bailout.
Jeroen Dijsselbloem, who chairs meetings of eurozone finance ministers said
publicly that Cyprus was not such a special case after all. In interviews
with the FT and Reuters Dijsselbloem said Cyprus would be used as the model
for future bailouts.
Though many
suspect that Dijsselbloem's ideas on financial management depend on
telephoned instructions from Angela Merkel.
Dijsselbloem's comments were an open invitation to any investor with more
than €100,000 in a eurozone bank to remove it without delay, which some then
did.
Here is the problem: the €10bn (£8.5bn) loan from the European Union, the
European Central Bank and the International Monetary Fund means Cyprus will
have a debt-to-GDP ratio of 140% and an economy that is on course to shrink
by at least 20% in the next two or three years. In those circumstances an
already unsustainable debt ratio will continue to increase. Ultimately the
country's creditors will either write down a good chunk of the debts or
Cyprus will leave the euro.
In truth, leaving the single currency looks the better option. Cyprus
previously had a flawed economic model; now it has no economic model at all.
The financial services industry will be wiped out and membership of the euro
means there can be no boost to the only alternative source of revenue –
tourism – through a cheaper currency.
Cyprus was, in
many respects, the eastern Med's version of Iceland, another small island
that allowed its banks to balloon in size. But Iceland is not a member of
the euro, and its recovery from financial crisis has been aided by
devaluation.
For the time being, though, Cyprus remains shackled to the eurozone.
Dijsselbloem has a point when he says it is unfair that Europe's taxpayers
should be continually asked to foot the bill for bank losses, and Cyprus has
certainly been used as the laboratory mouse for a different approach.
But the botched rescue has done nothing to draw a line in the sand. On the
contrary, investors big and small now have the sneaking feeling that their
savings could be at risk in the event of a future crisis.
A better deal,
but still painful
25 March 2013
The Economist on the Cyprus bail-out
It WAS an
appalling way to reach a decision, but in the end the euro zone’s €10
billion ($13 billion) bail-out package for Cyprus, agreed in the early hours
of March 25th, was something approaching a reasonable compromise. At any
rate, it dealt with the most egregious errors of the previous all-night
deal.
It keeps Cyprus in the euro zone. And it restores the promise to protect
bank deposits covered by the EU-mandated €100,000 deposit guarantee.
Cyprus is the fourth euro-zone country to receive a full bail-out after
Greece, Ireland and Portugal (or the fifth, if one counts the partial
bail-out for Spain’s banks). But unlike previous rescues, the package for
Cyprus left a large part of the island’s financing needing to be found from
its outsized banking sector—in particular from depositors, many of them
Russian businessmen.
On March 16th Cyprus’s president, Nicos Anastasiades, desperate to protect
Cyprus’s status as an offshore banking model for Russians, had decided to
save the two biggest banks and thus to spread the pain thinly. He would have
applied a hefty tax to all depositors: 9.9% for those too big to be covered
by the EU-mandated €100,000 deposit guarantee, and 6.75% for the smaller
depositors.
But after a week of brinkmanship—including protests by Cypriots, the
extended closure of banks to avoid the outrush of money, a failed attempt by
Cyprus to throw itself at Russia’s feet, an ultimatum by the European
Central Bank and an eleventh-hour threat by Cyprus to leave the euro zone—a
different decision was made: to apply the pain much more intensely, but on a
smaller number of large depositors.
The country’s second-biggest bank, Laiki, would be wound down. Viable assets
and insured deposits would be put into a “good bank”. Another €4.2 billion
worth of uninsured deposits would be placed into a “bad bank”, to be
disposed of, with no certainty that big depositors will get any money back.
The treatment of the biggest bank, Bank of Cyprus, was a bit less harsh. It
is to be restructured severely by wiping out shareholders and bailing in
bondholders, both junior and senior. Uninsured depositors would probably
incur haircuts of the order of 35%, said senior sources involved in the
negotiation. The “good bank” emerging from Laiki would be merged with Bank
of Cyprus.
Jeroen Dijsselbloem (rubbing his eyes in the picture above), who chairs the
euro zone’s group of finance ministers, said the deal was better than the
previous one in several respects. To begin with, it concentrated on the
cause of Cyprus’s woe—the crippling of its two largest banks, which were
heavily exposed to Greece. Moreover it would restore the protection of
guaranteed deposits. And it would establish a sensible hierarchy of
creditors when banks have to be wound up or restructured. Under the previous
agreement, senior bondholders (who, admittedly, account for a relatively
small sum) would have been spared while even small depositors would have
been hit.
After the upheavals of the past week, and months of earlier negotiations,
the euro zone has ended up with a deal that is similar to the solution first
proposed by the IMF, which was backed by Germany but rejected by Cyprus (and
to some extent by the European Commission). The IMF had suggested winding
down both Laiki and Bank of Cyprus and splitting them into good and bad
banks. Now Mr Anastasiades has salvaged the shell of the Bank of Cyprus, but
at the cost of encumbering it with bad assets. The scale of the bail-in that
will be required to bring it to the target capital-ratio of 9% remains
unclear.
It took a popular protest, and a threat by the European Central Bank to cut
off liquidity to Cyprus by March 25th if a deal were not reached, to change
Mr Anastasiades’s mind about trying to protect those big foreign depositors
at the expense of small domestic savers.
When he travelled to Cyprus to try to agree a new package on March 24th, the
Cypriot president tried to push the issue out of the hands of finance
ministers in the "euro group" and onto the lap of the leaders who would be
called for a special summit. At one point, participants said, Mr
Anastasiades threatened to resign, even to pull Cyprus out of the euro zone.
In the end, he relented. The European leaders, fed up with Cyprus’s tactics,
had refused to yield. Their confidence was increased by the fact that
depositors did not start bank runs in other troubled parts of the euro zone,
and the market's initial nervousness soon abated. Germany and other creditor
states are growing weary of successive bail-outs. Even France, usually the
champion of “solidarity”, could not summon the will to bail out Cyprus’s
“casino” banking, as Pierre Moscovici, the French finance minister, put it.
So as well as exacting their bail-in, they declined to offer any more money,
even though the Cypriot economy has been further weakened by the upheavals
of recent days. The creditors were helped by the IMF’s view that too big a
loan would simply make Cyprus’s debt unsustainable.
The immediate question is whether Mr Anastasiades can get his recalcitrant
parliament, which had rejected the previous package by a vote of 36-0, to
support the effective dismantling of Cyprus’s offshore banking system.
A further question is when Cypriot banks will able to reopen, and when
“temporary” restrictions on the movement of capital—the first time any have
been imposed during the euro-zone crisis—will be lifted. Big deposits in
Bank of Cyprus will be frozen until their fate is settled.
Then another point of uncertainty is to do with Russia's reaction. The euro
zone hopes that it, too, will contribute to their effort by rescheduling its
€2.5 billion loan to Cyprus. But now that its own citizens are being stung
for billions of euros' worth of deposits, the Kremlin may not be so
sympathetic.
Nobody doubts that, after such a severe blow to its lucrative banking
sector, Cyprus will be pushed into a harsh recession. Some sources in the
troika tentatively estimate that GDP will shrink by about 10% before any
hope of recovery.
Perhaps the biggest question is this: once the banks have been cleaned up
and shrunk, where will Cyprus find economic growth? The promise of offshore
gas deposits is still too uncertain, and tourism may well decline if
Russians suddenly find the island to be less hospitable to their money.
Whether the euro zone has gained any credibility for this round of
clear-eyed decision-making is a different matter altogether.
Multinational Watford look to top flight and a solid financial future
25 March 2013
"In a bitingly
cold, otherwise empty Vicarage Road this week on Wednesday, Gianfranco Zola,
former Chelsea, Napoli and Italy playing legend turned Watford manager,
watched with hands clasped behind his back as his eclectic squad of
nationalities skipped through a nine-a-side training joust. The goals were
squeezed into less than half the pitch, but the players were relishing the
game, exhibiting an intricacy of skills.
Matej Vydra, the 20-year-old striker who has scored 20 times in Watford's
eye-catching ascent to third place in the Championship, was away on
international duty with the Czech Republic, but several of his seven fellow
loan players from the Italian club Udinese were in the session. Joel
Ekstrand, the Swedish central defender, was passing the ball unruffled;
Fernando Forestieri, the Argentinian forward whose loan from Udinese was
converted to a permanent signing in January, prowled constantly for a goal
past Jack Bonham, the 19-year-old Watford academy graduate. Geoffrey Mujangi
Bia, on loan from Standard Liège, crossed high and looping, and as the ball
came down, Alex Geijo, another Udinese loanee, smacked a clean left-foot
volley meatily into the net.
Sudden arrivals after Watford were bought in June last year by the Pozzo
family – the Italians who own Udinese, and the Spanish club Granada, from
whom two more loan players were imported – these loan stars have played Zola
into sight of a remarkable promotion to the Premier League. However,
Watford's rise this season has attracted insistent criticism around the
Football League.
Watford's critics argue that while they may not be breaking the rules by
importing so many loan players, they are in breach of the spirit of them.
Clubs are limited to just five loan players in a matchday squad of 18, a
measure designed to protect clubs' identities and prevent them being
swallowed up as feeders. Watford are seen as having taken advantage of a
loophole, that loan players from clubs in other countries must sign until
the end of a season, so are officially classed as permanent transfers.
Watford under the Pozzos have brought in 14 loan players: nine from Udinese
until Forestieri signed permanently; defender Daniel Pudil and midfielder
Ikechi Anya from Granada, Mujangi Bia from Liège, as well as Matthew Briggs
from Fulham and Chelsea's England Under-21 international defender Nathaniel
Chalobah.
Fielding so many loanees has created the impression that the famous old
Hornets have become a subsidiary training operation for Udinese, peopled by
a temporary squad. Most outspoken has been the Crystal Palace manager, Ian
Holloway, who described what is happening at Watford as "ludicrous".
The League appear to agree, and have recommended change which will be voted
on at their AGM this summer – to include international loan players within
the five permitted, and a maximum of four from any one club. After those
proposed changes, Watford would not be able to field so many on-loan
players.
Around football and among fans, there is also a worry that the time-served
Watford youth system has been undermined by the club's decision to maintain
it only at category three, not to upgrade to category one in football's new
Elite Player Performance Plan (EPPP) system.
Watford have grown a little tired of having to defend themselves, and after
training, Zola himself pointed out, legitimately and a touch wearily: "We
did not break any rules."
When you go to Vicarage Road, they give an arrestingly different and more
positive account of the club's future. The chief executive, Scott Duxbury,
emphasises that the Italian owners, independently wealthy after selling the
family company to Bosch, have owned Udinese for 27 years and made a notable
success of it. From 1986, when Giampolo Pozzo bought the club, Udinese were
built up gradually until they are now solidly established in Serie A. They
developed a strategy, after early, lavish spending brought poor results, of
investing in young players, selling them on and reinvesting – Alexis Sánchez
to Barcelona for €26m last summer being the most recent outstanding example.
Gino Pozzo, son of the family business's founder, Giampaolo, stated on
taking over that they are interested in investing in their English club for
similar measured progress, not a rapid sprint to the Premier League's crock
of gold, fortified by loan deals.
"We are here for the long term," he promised. "This is not a case of a
foreign owner with an injection of money looking for a quick return. We wish
to establish Watford as a Premier League club … self-sufficient over time.
Longevity to us is key to success. It is only over many years that success
can be judged."
Pozzo pledged that they plan a similar strategy to that at Udinese, basing
it, after an initial boost with loans from their other clubs, on their
extensive scouting network and youth development. Duxbury argues that the
decision not to run the highest EPPP category is because Watford trust their
existing academy, and consider the new U21 league played by category one
clubs to be a comfort zone for young players, not the finishing school the
Premier League intends.
Duxbury and Pozzo have committed that when the club has settled, progress
will be based on permanent signings, and Duxbury said that when the league's
loan rules change this summer, they will look to sign permanently several of
those imports currently on loan. English football's prominence, and the
windfall millions paid to clubs winning promotion to the Premier League –
much more than in Serie A where TV rights are sold by clubs individually –
spurred the Pozzos to buy a club here. They contacted Gianluca Nani, now the
technical director, who was at West Ham with Duxbury and Zola; Pozzo said he
is considering Watford the family's main football venture, and certainly not
a nursery club for Udinese. Supporting Duxbury's argument that the club are
lucky to have the Pozzos is Watford's difficult recent history. "They are
the benchmark of ownership in European football," Duxbury told the Observer.
"They are long-term, sensible, reliable businessmen, who are involved in
football not to make a profit – they invest all money back into their clubs.
They are competitive; they want to win."
With the 1980s heyday under the ownership of Elton John long over, Watford
struggled after their season in the Premier League of 2006-07 and suffered a
traumatic year before the Pozzos took over. Then owned by Laurence Bassini,
a Londoner who cited his business as property development, the club ran up a
£2.6m loss in 2011-12 and sailed close to administration before the Pozzos
bought Bassini out and took on the £13m debt. According to Watford's
accounts, Bassini's company charged the club £242,000 in consultancy fees.
The accounts also allege that Bassini's company owed the club £2m, which he
denies. An independent football disciplinary commission had been
investigating the Hertfordshire club, with the alleged misconduct charges
arising from the handling of two financial transactions in 2011 which
occurred during Bassini's tenure as owner and director – one of which
related to the transfer of striker Danny Graham to Swansea in June 2011.
This week, the commission banned Bassini from involvement in football for
three years after finding him guilty of "deception" and "misconduct".
Watford emerged without a fine or points deduction because the misconduct,
borrowing millions against future income without informing the League as
required, was found to be Bassini's own work. Watford have instead received
a transfer embargo of sorts which runs until 31 August and requires League
approval for all signings. Bassini is appealing and says he will fight to
clear his name but there was, on a grey afternoon, a palpable sense of
relief around Vicarage Road.
In his little office, Zola smiled his winning smile, and said he is happy.
There was a congratulations note resting on the table – from Barry Fry, on
Zola's February Championship manager of the month award – and the Italian
explained: "We have so many on loan because the club was bought very soon
before the beginning of the season; we assembled the team at the last
minute. This was the best way, to see how good they are, and if they want to
stay with us."
The Italian said he is surprised by how well the team came together after
losing four of the first six matches of the season, including a 5-1 defeat
at Derby: "It was a very big challenge, to have so many players, 37 or 38,
and so many foreign players, to mould them into a team and train them also."
Then he smiled again: "But we are working it out quite well. And we hope now
for a good ending to this season. The project is good."
Pozzo has pointed out that Granada, who were also in financial trouble when
the family bought the club in 2009, were similarly stocked with Udinese
loans initially, but now, two promotions later and in La Liga, are buying
their own players. Watford have a £9m budget for football, including wages,
and Duxbury stressed he has to develop the club commercially, and attract
more fans, if he is to have more money to invest in the team.
In the Premier League, contrary to some misconceptions, international loan
players are classed as transfers and so permitted in match squads without
limit, but Duxbury says Watford wants to sign most of the players
permanently whether they go up or not.
All of this is a first for English football, and unsettling for many. But in
the game's ownership landscape, which increasingly features investors from
overseas with no previous connection to football, the Pozzos bring
experience, proven success, and a much more coherent plan than most."
Hong Kong's top
court legalises selective discrimination
25 March 2013
Hong Kong's top
court has ruled against two Filipino domestic workers seeking permanent
residency, the final decision in a case that affects tens of thousands of
other foreign maids in the city.
The Court of Final Appeal was unanimous in its ruling on Monday, siding with
the government's position that tight restrictions on domestic helpers mean
they do not have the same status as other foreign residents.
Lawyers for the two had argued that an immigration provision barring
domestic workers from permanent residency was unconstitutional.
The decision means Evangeline Banao Vallejos and Daniel Domingo are not
allowed to apply to settle permanently after living at least seven years in
Hong Kong. Vallejos has worked in Hong Kong since 1986 and Domingo since
1985. Neither appeared at court.
"We are very disappointed," said Mark Daly, a lawyer for the pair. He said
Vallejos was speechless after learning about the decision.
"While we respect the judgement we disagree with it," Daly said. He added
that the ruling is "not a good reflection of the values we should be
teaching youngsters and people in our society."
The case has split the city, home to nearly 300,000 maids from mainly
Southeast Asian countries. Some argue that barring maids from applying for
residency amounts to ethnic discrimination.
But other groups have raised fears that the case would result in a massive
influx of maids' family members arriving in Hong Kong, straining the densely
populated city's social services, health and education systems. Supporters
of the maids say those fears are overblown.
Members of an activist group chanted "We are workers, not slaves" and other
slogans on the courthouse's front steps after the ruling was released.
"Today is a very sad day for migrant workers in Hong Kong," said Eman
Villanueva, secretary-general of United Filipinos in Hong Kong. "The message
from the Court of Final Appeal is very unfair and discriminatory."
Hong Kong is a special administrative region of China and permanent
residency is the closest thing it has to citizenship.
Foreigners who work in other professions are eligible for permanent
residency after living in Hong Kong for seven years. Those who have it can
vote and work without needing a visa.
Government figures cited by a lower court in this case said an estimated
117,000 foreign maids had been in Hong Kong for that length of time as of
2010
Cyprus deal done; now for the fall-out
25 March 2013
It is a holiday in
Cyprus today. So there is only a limited reaction to the deal that has been
to solve Cyprus' financial crisis.
The deal is done
but leaves no one happy and sets a worrying precedent.
A meeting of eurozone finance ministers that started six hours late reached
an agreement in the early hours of Monday morning to agree the fine print of
the deal. Savers with deposits of less than €100,000 (£85,000) will be
spared but there will be heavy losses inflicted on the deposits of the
wealthy. Since when has Euro100,000 in savings defined someone as wealthy.
Laiki, or Cyprus Popular Bank, is to be closed, with its good assets
transferred to Bank of Cyprus, the country's biggest bank. This will include
substantial job losses.
A €100 limit was imposed on ATM withdrawals, with more stringent capital
controls to follow when the deal is finalised.
The agreement outlined early on Monday came close to what the IMF and
Eurozone had demanded a week ago and which had been rebuffed by the Cypriot
parliament. A few variables have been changed (such as the protection of
smaller savers' deposits) but little else has changed.
There are few
details yet on the precise details of the agreement but the assumptions are
that it includes:
• A €10bn bailout that will shut down Cyprus' second largest bank and
inflict heavy losses on uninsured depositors, including wealthy Russians.
• The deal will spare the country a financial meltdown by winding down
Popular Bank of Cyprus, also known as Laiki, and shifting deposits below
€100,000 to the Bank of Cyprus to create a "good bank".
• Deposits above €100,000, which under EU law are not guaranteed, will be
frozen and used to resolve debts, and Laiki will effectively be shuttered,
with thousands of job losses.
The Cypriot President Nicos Anastasiades, who has been in the job for less
than a month, looks finished. And if you look at what's happened to leaders
of other peripheral euro countries who've accepted the Troika's
structural-adjustment programmes, they've nearly all been toast. The one
major exception is Madrid's Rajoy.
But should it have come to this; the farce of eleventh-hour negotiations
where it has appeared that the fate of the 17-member currency area hung in
the balance.
The biggest anomaly of all is that Cyprus will introduce capital controls in
an economic area whose main purposes is to facilitate the free flow of
capital.
Two other
precedents:
1. The EU apparently sanctioning theft from the life savings of small
savers. Anyone living in another small, weak, euro member state should take
note.
2. And you've also had a euro member turning away from its 16 fellow members
and towards a non-EU country for help and political support. Just imagine if
Cyprus had been dealing with a serious partner, rather than Russia?
Cyprus now faces a Greek-style depression and years of austerity. The
national business model (based on offshore funds) has been curshed - the hot
money's already fled to Latvia; and it won't be coming back to Cyprus).
The general tenor
of this week's communications from the troika of the European commission,
the European Central Bank and the IMF has been that Cyprus is a tiny economy
with some idiosyncratic problems that cannot be read into the rest of the
euro area. The Cypriot economy is worth only 0.2% of the euro area's GDP.
As officials in Cyprus will tell you, the island's problems only really took
off after their banks were hit by massive write-offs on holdings of Greek
bonds. Those write-offs were negotiated by Athens with the troika and the
problems they would pose for Cyprus were evident. Yet, amazingly, European
officials did next to nothing to shore up the island's financial system.
There was ample time to protect savers with Cypriot banks and to restructure
the institutions.
The troika has treated Nicosia with a toughness and a thoughtlessness that
it would not apply to bigger and less peripheral nations. This is not a new
trend – Madrid's Mariano Rajoy was treated more respectfully in his bailout
dealings than Athens's George Papandreou – but it was massively extended
last weekend, in the initial agreement to raid the bank accounts of ordinary
Cypriots.
For all its so
called unity the EU does not manage on a collective basis. It deals with one
crisis at a time without evaluating the fallout that can impact other EU
members.
Worse, those European politicians and bureaucrats who condemned Cyprus's
outsize banking sector were cheering it into the euro just five years ago.
The essential design flaw in the eurozone is that it is not really a
monetary union; it is just a common currency area, lacking the essential
feature that ensures financial integration, namely a banking union. The
latest piece of mismanagement over Cyprus makes the attainment of a banking
union, on which progress has been negligible, even more difficult.
Levies or taxes on deposits in banks are now a genuine threat. It is not
just the citizens of the EU that should be concerned.
Qantas flight times from Dubai
24 March 2013
The Emirates
Qantas alliance starts on 31 March 2013.
The major impact
at DXB will be the two daily Qantas flights to and from London that will now
route through Dubai rather than through Singapore.
This means that
between the two airlines there will be seven (yes seven) daily A380 flights
from London to Dubai and vice versa.
The first flights
from London to Dubai are on 31 March leaving Dubai for Australia on 1 April.
The first flights
from Dubai to London are on 1 April; they leave Australia on 31 March and
fly overnight to Dubai.
|
QF 001/002 |
QF 009/010 |
Sydney dep |
17.05 |
|
Melbourne dep |
|
16.25 |
Dubai arr |
00.35 (next
day) |
23.25 |
Dubai dep |
02.05 |
01.00 (next
day) |
London arr |
07.30 |
05.30 |
|
|
|
London dep |
21.30 |
22.30 |
Dubai arr |
07.20 |
08.20 |
Dubai dep |
09.20 |
09.50 |
Sydney arr |
06.00 (second
day) |
|
Melbourne arr |
|
06.15 (second
day) |
The strange thing
about this schedule is how much time the QF A380s sit in London going no
where. EK uses its fleet so much more efficiently.
Emirates
founder retires
23 March 2013
Words well said
as an aviation legend takes a very belated retirement.
"After more than
60 enterprising years in aviation, including 35 years in the Emirates Group,
Sir Maurice Flanagan, Executive Vice Chairman, Emirates Airline & Group, has
decided to retire in April.
Maurice joined dnata in 1978, after 25 years of stellar service in British
Airways. Tasked with launching Emirates in 1985 with a small, enthusiastic
team of experts, he led from the front as Managing Director of the fledgling
airline.
By then, Maurice was already an influential aviation veteran, while I had
recently graduated from university. Since those early days, he has been a
mentor and guide, and I will always cherish the instant chemistry we shared
and the subsequent friendship we forged through the years.
He has played a strategic role in the phenomenal growth and agility of the
Emirates Group and influenced Dubai's significant standing on the global
stage.
In the aviation industry, he is a legend. To us, he will always be a
founder, a visionary, an exceptional leader, and above all, an empathetic
and generous human being.
We will all miss him. I bid farewell to this extraordinary trailblazer and
wish him a well-earned and richly deserved retirement."
Ahmed bin Saeed Al Maktoum
Chairman & Chief Executive Emirates Airline & Group
President Obama Addresses Israeli People – “I Believe Your Future Is Bound
to Ours”
21 March 2013
Below are the remarks, as prepared for delivery, made by
President Barack Obama in Israel during his first presidential visit to the
nation.
But the fear is that this is Obama the
cheerleader - standing on the sidelines - never taking a risk by becoming a
part of the fight.
The trouble with Obama's great speeches
(and this like Cairo before is one of them) is they raise such an
expectation that he can deliver change. History suggests that change will
not happen - leaving him as full of sound and fury, meaning nothing.
--------------------------------------------------------------------------------
Shalom. It is an honor to be here with you in Jerusalem, and
I am so grateful for the welcome that I have received from the people of
Israel. I bring with me the support of the American people, and the
friendship that binds us together.
Over the last two days, I have reaffirmed the bonds between our countries
with Prime Minister Netanyahu and President Peres. I have borne witness to
the ancient history of the Jewish people at the Shrine of the Book, and I
have seen Israel’s shining future in your scientists and entrepreneurs. This
is a nation of museums and patents, timeless holy sites and ground-breaking
innovation. Only in Israel could you see the Dead Sea Scrolls and the place
where the technology on board the Mars Rover originated. But what I’ve
looked forward to the most is the ability to speak directly to you, the
Israeli people – especially so many young people – about the history that
brought us here today, and the future that you will make in the years to
come.
Now I know that in Israel’s vibrant democracy, every word and gesture is
carefully scrutinized. But just so you know, any drama between me and my
friend Bibi over the years was just a plot to create material for Eretz
Nehederet.
I also know that I come to Israel on the eve of a sacred holiday – the
celebration of Passover. And that is where I would like to begin today. Just
a few days from now, Jews here in Israel and around the world will sit with
family and friends at the Seder table, and celebrate with songs, wine and
symbolic foods. After enjoying Seders with family and friends in Chicago and
on the campaign trail, I’m proud to have brought this tradition into the
White House. I did so because I wanted my daughters to experience the
Haggadah, and the story at the center of Passover that makes this time of
year so powerful.
It is a story of centuries of slavery, and years of wandering in the desert;
a story of perseverance amidst persecution, and faith in God and the Torah.
It is a story about finding freedom in your own land. For the Jewish people,
this story is central to who you have become. But it is also a story that
holds within it the universal human experience, with all of its suffering
and salvation. It is a part of the three great religions – Judaism,
Christianity, and Islam – that trace their origins to Abraham, and see
Jerusalem as sacred. And it is a story that has inspired communities around
the globe, including me and my fellow Americans.
In the United States – a nation made up of people who crossed oceans to
start anew – we are naturally drawn to the idea of finding freedom in our
land. To African-Americans, the story of the Exodus told a powerful tale
about emerging from the grip of bondage to reach for liberty and human
dignity – a tale that was carried from slavery through the civil rights
movement. For generations, this promise helped people weather poverty and
persecution, while holding on to the hope that a better day was on the
horizon. For me personally, growing up in far-flung parts of the world and
without firm roots, it spoke to a yearning within every human being for a
home.
Of course, even as we draw strength from the story of God’s will and His
gift of freedom expressed on Passover, we know that here on Earth we must
bear our responsibilities in an imperfect world. That means accepting our
measure of sacrifice and struggle, and working – through generation after
generation – on behalf of that ideal of freedom. As Dr. Martin Luther King
said on the day before he was killed – “I may not get there with you. But I
want you to know that… we, as a people, will get to the promised land.” So
just as Joshua carried on after Moses, the work goes on – for justice and
dignity; for opportunity and freedom.
For the Jewish people, the journey to the promise of the State of Israel
wound through countless generations. It involved centuries of suffering and
exile, prejudice, pogroms and even genocide. Through it all, the Jewish
people sustained their unique identity and traditions, as well as a longing
to return home. And while Jews achieved extraordinary success in many parts
of the world, the dream of true freedom finally found its full expression in
the Zionist idea – to be a free people in your homeland.
That is why I believe that Israel is rooted not just in history and
tradition, but also in a simple and profound idea: the idea that people
deserve to be free in a land of their own. And over the last 65 years, when
Israel has been at its best, Israelis have demonstrated that responsibility
does not end when you reach the promised land, it only begins.
And so Israel has been a refuge for the diaspora – welcoming Jews from
Europe to the former Soviet Union; from Ethiopia to North Africa.
Israel has built a prosperous nation – through kibbutzeem that made the
desert bloom, business that broadened the middle class, and innovators who
reached new frontiers – from the smallest microchip to the orbits of space.
Israel has established a thriving democracy – with a spirited civil society,
proud political parties, a tireless free press, and a lively public debate –
lively may even be an understatement.
And Israel has achieved this even as it has overcome relentless threats to
its security – through the courage of the Israel Defense Forces, and a
citizenry that is resilient in the face of terror.
This is the story of Israel. This is the work that has brought the dreams of
so many generations to life. And every step of the way, Israel has built
unbreakable bonds of friendship with the United States of America.
Those ties began only eleven minutes after Israeli independence, when the
United States was the first nation to recognize the State of Israel. As
President Truman said in explaining his decision to recognize Israel, “I
believe it has a glorious future before it not just as another sovereign
nation, but as an embodiment of the great ideals of our civilization”
Since then, we have built a friendship that advances our shared interests.
Together, we share a commitment to security for our citizens and the
stability of the Middle East and North Africa. Together, we share a focus on
advancing economic growth around the globe, and strengthening the middle
class within our countries. Together, we share a stake in the success of
democracy.
But the source of our friendship extends beyond interests, just as it has
transcended political parties and individual leaders. America is a nation of
immigrants. We are strengthened by diversity. We are enriched by faith. We
are governed not simply by men and women, but by laws. We are fueled by
entrepreneurship and innovation. And we are defined by a democratic
discourse that allows each generation to reimagine and renew our union once
more. So in Israel, we see values that we share, even as we recognize what
makes us different.
Yet I stand here today mindful that for both our nations, these are
complicated times. We have difficult issues to work through within our own
countries, and we face danger and upheaval in the world. When I look at
young people within the United States, I think about the choices that they
must make in their lives to define who we will be as a nation in this 21st
century, particularly as we emerge from two wars and a painful recession. No
matter how great the challenges are, their idealism, their energy, and their
ambition always gives me hope.
I see the same spirit in the young people here today. And given the ties
between our countries, I believe your future is bound to ours. So I’d like
to focus on how we can work together to make progress in three areas that
will define our times: security, peace, and prosperity.
I will begin with security. I am proud that the security relationship
between the United States and Israel has never been stronger: more exercises
between our militaries, and more exchanges among our political, military and
intelligence officials than ever before; the largest program to date to help
you retain your qualitative military edge. Those are the facts. But to me,
this is not simply measured on the balance sheet. I know that here, in
Israel, security is something personal. So let me tell you what I think
about when I consider these issues.
When I consider Israel’s security, I think about children like Osher Twito,
who I met in Sderot – children, the same age as my own daughters, who went
to bed at night fearful that a rocket would land in their bedroom simply
because of who they are and where they live. That’s why we’ve invested in
the Iron Dome system to save countless lives – because those children
deserve to sleep better at night. That’s why we have made it clear, time and
again, that Israel cannot accept rocket attacks from Gaza, and have stood up
for Israel’s right to defend itself. And that’s why Israel has a right to
expect Hamas to renounce violence and recognize Israel’s right to exist.
I think about five Israelis who boarded a bus in Bulgaria, who were blown up
because of where they came from; who were robbed of the ability to live, and
love, and raise families. That’s why every country that values justice
should call Hizbollah what it truly is – a terrorist organization. Because
the world cannot tolerate an organization that murders innocent civilians,
stockpiles rockets to shoot at cities, and supports the massacre of men,
women and children in Syria.
The fact that Hizbollah’s ally – the Assad regime – has stockpiles of
chemical weapons only heightens the urgency. We will continue to cooperate
closely to guard against that danger. And I have made it clear to Bashar al-Assad
and all who follow his orders: we will not tolerate the use of chemical
weapons against the Syrian people or the transfer of these weapons to
terrorists. The world is watching, and we will hold you accountable.
America will also insist that the Syrian people have the right to be freed
from the grip of a dictator who would rather kill his own people than
relinquish power. Assad must go so that Syria’s future can begin. Because
true stability in Syria depends upon establishing a government that is
responsive to its people – one that protects all communities within its
borders, while making peace with countries beyond them.
When I consider Israel’s security, I also think about a people who have a
living memory of the Holocaust, faced with the prospect of a nuclear-armed
Iranian government that has called for Israel’s destruction. It’s no wonder
Israelis view this as an existential threat. But this is not simply a
challenge for Israel – it is a danger for the entire world, including the
United States. It would raise the risk of nuclear terrorism, undermine the
non-proliferation regime, spark an arms race in a volatile region, and
embolden a government that has shown no respect for the rights of its own
people or the responsibilities of nations.
That is why America has built a coalition to increase the cost to Iran of
failing to meet their obligations. The Iranian government is now under more
pressure than ever before, and that pressure is increasing. It is isolated.
Its economy is in a dire condition. Its leadership is divided. And its
position – in the region, and the world – has only grown weaker.
All of us have an interest in resolving this issue peacefully. Strong and
principled diplomacy is the best way to ensure that the Iranian government
forsakes nuclear weapons. Moreover, peace is far more preferable to war, and
the inevitable costs – and unintended consequences – that would come with
it. Because of the cooperation between our governments, we know that there
remains time to pursue a diplomatic resolution. That is what America will do
– with clear eyes – working with a world that is united, and with the sense
of urgency that is required.
But Iran must know this time is not unlimited. And I have made the position
of the United States of America clear: Iran must not get a nuclear weapon.
This is not a danger that can be contained. As President, I have said to the
world that all options are on the table for achieving our objectives.
America will do what we must to prevent a nuclear-armed Iran.
For young Israelis, I know that these issues of security are rooted in an
experience that is even more fundamental than the pressing threat of the
day. You live in a neighborhood where many of your neighbors have rejected
your right to exist. Your grandparents had to risk their lives and all they
had to make a place for themselves in this world. Your parents lived through
war after war to ensure the survival of the Jewish state. Your children grow
up knowing that people they have never met hate them because of who they
are, in a region that is changing underneath your feet.
So that is what I think about when Israel is faced with these challenges –
that sense of an Israel that is surrounded by many in this region who reject
it, and many in the world who refuse to accept it. That is why the security
of the Jewish people in Israel is so important – because it can never be
taken for granted. But make no mistake: those who adhere to the ideology of
rejecting Israel’s right to exist might as well reject the earth beneath
them and the sky above, because Israel is not going anywhere. Today, I want
to tell you – particularly the young people – that so long as there is a
United States of America, Ah-tem lo lah-vahd.
The question, then, is what kind of future Israel will look forward to. And
that brings me to the subject of peace.
I know Israel has taken risks for peace. Brave leaders – Menachem Begin and
Yitzhak Rabin -reached treaties with two of your neighbors. You made
credible proposals to the Palestinians at Annapolis. You withdrew from Gaza
and Lebanon, and then faced terror and rockets. Across the region, you have
extended a hand of friendship, and too often have been confronted with the
ugly reality of anti-Semitism. So I believe that the Israeli people do want
peace, and you have every right to be skeptical that it can be achieved.
But today, Israel is at a crossroads. It can be tempting to put aside the
frustrations and sacrifices that come with the pursuit of peace –
particularly when an Iron Dome repels rockets, barriers keep out suicide
bombers, and so many other pressing issues demand your attention. And I know
that only Israelis can make the fundamental decisions about your country’s
future.
I also know that not everyone in this hall will agree with what I have to
say about peace. I recognize that there are those who are not simply
skeptical about peace, but question its underlying premise, and that’s a
part of democracy and the discourse between our two countries. But it is
important to be open and honest with one another. Politically, given the
strong bipartisan support for Israel in America, the easiest thing for me to
do would be to put this issue aside, and express unconditional support for
whatever Israel decides to do. But I want you to know that I speak to you as
a friend who is deeply concerned and committed to your future, and I ask you
to consider three points.
First, peace is necessary. Indeed, it is the only path to true security. You
can be the generation that permanently secures the Zionist dream, or you can
face a growing challenge to its future. Given the demographics west of the
Jordan River, the only way for Israel to endure and thrive as a Jewish and
democratic state is through the realization of an independent and viable
Palestine. Given the frustration in the international community, Israel must
reverse an undertow of isolation. And given the march of technology, the
only way to truly protect the Israeli people is through the absence of war –
because no wall is high enough, and no Iron Dome is strong enough, to stop
every enemy from inflicting harm.
This truth is more pronounced given the changes sweeping the Arab World. I
recognize that with the uncertainty in the region – people in the streets,
changes in leadership, the rise of non-secular parties in politics -it is
tempting to turn inward. But this is precisely the time to respond to the
wave of revolution with a resolve for peace. As more governments respond to
popular will, the days when Israel could seek peace with a handful of
autocratic leaders are over. Peace must be made among peoples, not just
governments. No one step can change overnight what lies in the hearts and
minds of millions. But progress with the Palestinians is a powerful way to
begin, while sidelining extremists who thrive on conflict and division.
Second, peace is just. There is no question that Israel has faced
Palestinian factions who turned to terror, and leaders who missed historic
opportunities. That is why security must be at the center of any agreement.
And there is no question that the only path to peace is through negotiation.
That is why, despite the criticism we’ve received, the United States will
oppose unilateral efforts to bypass negotiations through the United Nations.
But the Palestinian people’s right to self-determination and justice must
also be recognized. Put yourself in their shoes – look at the world through
their eyes. It is not fair that a Palestinian child cannot grow up in a
state of her own, and lives with the presence of a foreign army that
controls the movements of her parents every single day. It is not just when
settler violence against Palestinians goes unpunished. It is not right to
prevent Palestinians from farming their lands; to restrict a student’s
ability to move around the West Bank; or to displace Palestinian families
from their home. Neither occupation nor expulsion is the answer. Just as
Israelis built a state in their homeland, Palestinians have a right to be a
free people in their own land.
Only you can determine what kind of democracy you will have. But remember
that as you make these decisions, you will define not simply the future of
your relationship with the Palestinians – you will define the future of
Israel as well. As Ariel Sharon said, “It is impossible to have a Jewish,
democratic state and at the same time to control all of Eretz Israel. If we
insist on fulfilling the dream in its entirety, we are liable to lose it
all.” Or, from a different perspective, think of what David Grossman said
shortly after losing his son, as he described the necessity of peace – “a
peace of no choice” he said, “must be approached with the same determination
and creativity as one approaches a war of no choice.”
Of course, Israel cannot be expected to negotiate with anyone who is
dedicated to its destruction. But while I know you have had differences with
the Palestinian Authority, I believe that you do have a true partner in
President Abbas and Prime Minister Fayyad. Over the last few years, they
have built institutions and maintained security on the West Bank in ways
that few would have imagined a decade ago. So many Palestinians – including
young people – have rejected violence as a means of achieving their
aspirations.
Which leads to my third point: peace is possible. I know it doesn’t seem
that way. There will always be a reason to avoid risk, and there’s a cost
for failure. There will always be extremists who provide an excuse to not
act. And there is something exhausting about endless talks about talks; the
daily controversies, and grinding status quo.
Negotiations will be necessary, but there is little secret about where they
must lead – two states for two peoples. There will be differences about how
to get there, and hard choices along the way. Arab States must adapt to a
world that has changed. The days when they could condemn Israel to distract
their people from a lack of opportunity are over. Now is the time for the
Arab World to take steps toward normalized relations with Israel. Meanwhile,
Palestinians must recognize that Israel will be a Jewish state, and that
Israelis have the right to insist upon their security. Israelis must
recognize that continued settlement activity is counterproductive to the
cause of peace, and that an independent Palestine must be viable- that real
borders will have to be drawn. I’ve suggested principles on territory and
security that I believe can be the basis for talks. But for the moment, put
aside the plans and process. I ask you, instead, to think about what can be
done to build trust between people.
Four years ago, I stood in Cairo in front of an audience of young people.
Politically, religiously, they must seem a world away. But the things they
want – they’re not so different from you. The ability to make their own
decisions; to get an education and a good job; to worship God in their own
way; to get married and have a family. The same is true of the young
Palestinians that I met in Ramallah this morning, and of young Palestinians
who yearn for a better life in Gaza.
That is where peace begins – not just in the plans of leaders, but in the
hearts of people; not just in a carefully designed process, but in the daily
connections that take place among those who live together in this land, and
in this sacred city of Jerusalem. Speaking as a politician, I can promise
you this: political leaders will not take risks if the people do not demand
that they do. You must create the change that you want to see.
I know this is possible. Look to the bridges being built in business and
civil society by some of you here today. Look at young people who have not
yet learned a reason to mistrust, and those who have learned to overcome a
legacy of mistrust that they inherited from their parents because of the
simple recognition that we hold more hopes in common than the fear that
drives us apart. Your voices must be louder than the extremists who would
drown them out. Your hopes must light the way forward. Look to a future in
which Jews, Muslims and Christians can all live in peace and greater
prosperity in this Holy Land. Look to the future that you want for your own
children – a future in which a Jewish, democratic state is protected and
accepted, for this time and for all time.
There will be many voices that say this change is not possible. But remember
this: Israel is the most powerful country in this region. Israel has the
unshakeable support of the most powerful country in the world. Israel has
the wisdom to see the world as it is, but also the courage to see the world
as it should be. Ben Gurion once said, “In Israel, in order to be a realist
you must believe in miracles.” Sometimes, the greatest miracle is
recognizing that the world can change. After all, that is a lesson that the
world learned from the Jewish people.
That brings me to the final area I will focus on: prosperity, and Israel’s
broader role in the world. I know that all the talk about security and peace
can seem distant from other concerns that you have in your daily lives. And
every day, even amidst the threats you face, Israelis are defining
themselves by the opportunities you create.
Through talent and hard work, Israelis have put this small country at the
forefront of the global economy. Israelis understand the value of education,
and have produced 10 Nobel laureates. Israelis understand the power of
invention, and your universities educate engineers and inventors. That
spirit has led to economic growth and human progress: solar power and
electric cars; bandages and prosthetic limbs that save lives; stem cell
research and new drugs that treat disease; cell phones and computer
technology that change the way we live. If people want to see the future of
the world economy, they should look at Tel Aviv: home to hundreds of
start-ups and research centers. And Israelis are so active on social media
that every day seemed to bring a different Facebook campaign about where I
should give this speech.
That innovation is just as important to the relationship between the United
States and Israel as our security cooperation. Our first free trade
agreement in the world was reached with Israel nearly three decades ago, and
today the trade between our two countries is at 40 billion dollars each
year. More importantly, that partnership is creating new products and
medical treatments, and pushing new frontiers of science and exploration.
That is the kind of relationship that Israel should have – and could have –
with every country in the world. Already, we see how that innovation could
reshape this region. One program here in Jerusalem brings together young
Israelis and Palestinians to learn vital skills in technology and business.
An Israeli and Palestinian have started a venture capital fund to finance
Palestinian start-ups. Over 100 high-tech companies have found a home on the
West Bank, which speaks to the talent and entrepreneurial spirit of the
Palestinian people.
One of the great ironies of what is happening in the broader region is that
so much of what people are yearning for – education and entrepreneurship;
the ability to start a business without paying a bribe, to connect to the
global economy – those things can be found in Israel. This should be a hub
for thriving regional trade, and an engine of opportunity. And this is
already a center for innovation that helps power the global economy. I
believe that all of that potential for prosperity can be enhanced with
greater security, and a lasting peace.
Here, in this small strip of land that has been the center of so much
tragedy and triumph, Israelis have built something that few could imagine
sixty-five years ago. Tomorrow, I will pay tribute to that history – at the
grave of Herzl, a man who had the foresight to see that the future of the
Jewish people had to be reconnected to their past; at the grave of Rabin,
who understood that Israel’s victories in war had to be followed by battles
for peace; and at Yad Vashem, where the world is reminded of the cloud of
evil that can descend on the Jewish people and all of humanity if we fail to
remain ever vigilant.
We bear that history on our shoulders, and we carry it in our hearts. Today,
as we face the twilight of Israel’s founding generation, you – the young
people of Israel – must now claim the future. It falls to you to write the
next chapter in the story of this great nation.
As the President of a country that you can count on as your greatest friend,
I am confident that you can help us find the promise in the days that lie
ahead. And as a man who has been inspired in my own life by that timeless
calling within the Jewish experience – tikkun olam – I am hopeful that we
can draw upon what’s best in ourselves to meet the challenges that will
come; to win the battles for peace in the wake of so much war; and to do the
work of repairing this world. May God bless you, and may God bless Israel
and the United States of America. Toda raba.
EU bullies set
Cyprus deadline
21 March 2013
The European
Central Bank has announced that it has agreed to continue supplying
emergency funding to Cyprus's banks until next Monday.
But if the bailout hasn't been agreed by then, the ECB would step away. It's
quite an ultimatum.
Here's the statement:
"The Governing Council of the European Central Bank decided to maintain the
current level of Emergency Liquidity Assistance (ELA) until Monday, 25 March
2013
Thereafter, Emergency Liquidity Assistance (ELA) could only be considered if
an EU/IMF programme is in place that would ensure the solvency of the
concerned banks."
That sets Nicosia a clear deadline -- find €6bn by next week, in a way that
satisfies the IMF and the European Union, or your banks collapse. The ECB
statement makes it clear the Cyprus has to make a deal with EU/IMF. So
Russian money might still result in a withdrawal of liquidity.
31 PAD leaders
indicted over 2008 Bangkok airports occupation
21 March 2013
Over four years after the event thirty-one core members of the People's
Alliance for Democracy, including co-founders Sonthi Limthongkul and
Chamlong Srimuang, were officially indicted last week for besieging
Suvarnabhumi and Don Mueang airports>
Another 83 people
who are either PAD members or security guards who reportedly took part in
the occupation of both airports and Government House during the PAD-led
protests await the next round of indictments.
Of the 31 members indicted yesterday, only 17 showed up at Criminal Court
before they were released on bail at a Bt800,000 guarantee each.
The PAD's satellite television channel, ASTV (Thailand), which broadcast the
leaders calling on people to take part in protests during the PAD-led
political gatherings, was also indicted as an entity.
A hearing is set on April 29 to hear the pleas.
The indictments were filed as a combination of offences against all PAD
members, either for the first 31, and 83 others, for their illegal entry
into and occupations of both airports.
The 31 PAD members have been indicted for terrorism; forceful entry;
criminal conspiracy in violation of emergency rule; destruction and
obstruction of facilities at an airport; affecting safety; causing traffic
jams at public places; disrupting communications; causing others' properties
to depreciate; criminal conspiracy; obstructing officials' duties;
intimidating officials on duty; intimidating others and withholding freedom.
The PAD occupation
of both Bangkok airports lasted eight traumatic days. The PAD were
attempting to create conditions for a military coup and protesting against
the government of Somchai Wongsawat. In the end, they didn’t get a military
coup; instead they got a military mutiny against the government and a
judicial coup. The result was the deal cobbled together by palace, military
and the so-called Democrat Party that put Abhisit Vejjajiva in the premier’s
seat.
Wary of causing further unrest the legal system still treats the PAD
leadership differently. They seem to have near immunity. It has taken four
years to even bring indictments. Then only 17 of the 31 bothered to show up
at Criminal Court.
The 31 included Sondhi Limthongkul and Chamlong Srimuang.
Reality check - indicted for terrorism and released on bail of baht800,000.
Farcical. Plenty of red shirts were jailed on similar charges and some
remain in jail, having been incarcerated almost three years ago.
flydubai expands Russian links
21 March 2013
A quick walk
around Dubai Mall will tell you just how many Russians are now in Dubai: so
flydubai's new expansion plans are timely:
In April and
September 2013 respectively the airline will be expanding operations to
Russia and Ukraine. From 16APR13, the airline will launch service to
Mineralnye Vody with 2 weekly service. From mid-September 2013, the airline
will launch 5 new destinations, including Rostov-on-Don, Volgograd,
Dniepropetrovsk, Odessa and Krasnodar.
All of these
flights can be operated as turnarounds - although there will be some long
overnight duties for flyDubai crews.
Dubai – Mineralnye Vody eff 16APR13 2 weekly
FZ977 DXB2330 – 0310+1MRV 73H 25
FZ978 MRV0410 – 0735DXB 73H 36
Mineralnye Vody is a
town in Stavropol Krai, Russia, located along the Kuma River and the main
rail line between Rostov-on-Don and Baku (Azerbaijan). Population: 76,728
(2010 Census);
Operational schedule varies after 17MAY13
Dubai – Rostov eff 13SEP13 2 weekly
FZ981 DXB2310 – 0330+1ROV 73H 25
FZ982 ROV0430 – 0840DXB 73H 36
Rostov-on-Don is a
port city and the administrative center of Rostov Oblast and the Southern
Federal District of Russia. It lies on the Don River, 32 kilometers (20 mi)
from the Sea of Azov. Population: 1,089,261 (2010 Census).
Dubai – Volgograd eff 13SEP13 2 weekly
FZ975 DXB2250 – 0300+1VOG 73H 25
FZ976 VOG0400 – 0805DXB 73H 36
Volgograd,
formerly called Tsaritsyn, and known as Stalingrad from 1925 to 1961, is an
important industrial city and the administrative center of Volgograd Oblast,
Russia. It is 80-kilometer (50 mi) long, north to south, situated on the
western bank of the Volga River. Population: 1,021,215 (2010 Census).
The city became famous for its resistance, as well as the extensive physical
damage and death toll it suffered during the Battle of Stalingrad against
the German Army in World War II. Since February 2013, the city's name is to
be commemorated as Stalingrad six days each year.
Dubai – Dniepropetrovsk eff 18SEP13 2 weekly
FZ737 DXB1025 – 1410DNK 73H 36
FZ738 DNK1515 – 2045DXB 73H 36
Dnipropetrovsk,
formerly Yekaterinoslav, is Ukraine's fourth largest city, with about one
million inhabitants. It is located southeast of Ukraine's capital Kiev on
the Dnieper River, in the south-central part of the country. Dnipropetrovsk
is the administrative centre of the Dnipropetrovsk Oblast.
A vital industrial centre of Ukraine, Dnipropetrovsk was one of the key
centres of the nuclear, arms, and space industries of the former Soviet
Union. In particular, it is home to Yuzhmash, a major space and ballistic
missile design bureau and manufacturer. Because of its military industry,
Dnipropetrovsk was a closed city until the 1990s.
Dubai – Odessa eff 20SEP13 2 weekly
FZ723 DXB1000 – 1355ODS 73H 25
FZ724 ODS1455 – 2020DXB 73H 25
Odessa is the third largest
city in Ukraine, with a population of 1,003,705. The city is a major seaport
located on the northwestern shore of the Black Sea and the administrative
center of the Odessa Oblast.
Dubai – Krasnodar eff 20SEP13 2 weekly
FZ983 DXB2340 – 0350+1KRR 73H 25
FZ984 KRR0450 – 0845DXB 73H 36
Krasnodar is a city and the
administrative center of Krasnodar Krai, Russia, located on the Kuban River
about 148 kilometers (92 mi) northeast of the Black Sea port of
Novorossiysk. Population: 744,995 (2010 Census).
Cyprus update
21 March 2013
Score one for this
web site: as advised yesterday Cyprus has ordered its banks to remain closed
until next week.
Cyprus has yet to find a new plan that will let it access an EU bailout to
stop its banks failing.
The country's eurozone partners and the International Monetary Fund (IMF)
are ready to provide €11bn in an emergency bailout if Cyprus comes up with
an extra €6bn itself. Most of the bailout money is needed to shore up the
country's oversized banking sector, with the rest for government finances.
Banks in Cyprus will now not open until Tuesday at the earliest, because
Monday is a bank holiday. They have been shut since last week to prevent a
run on deposits.
The country's two
main banks – Laiki and the Bank of Cyprus – face potential failure if a
bailout is not secured.
The Cypriot
government was said to be considering the possibility of imposing capital
controls amid fears that money would flood out of the country once its banks
were reopened.
With the EU deal uncertain, Cyprus was set to launch a second day of talks
with its ally Russia in Moscow on Thursday over a multibillion-dollar loan.
Replacing debt with debt does not appear to be much of a solution.
But Russians are exposed - they is an estimated $31bn (£21bn) held in
Cypriot banks by Russian banks, businesses and individuals, as well as up to
$40bn in loans to Cyprus-registered firms.
One small ray of hope: Cyprus's Orthodox church said it was willing to
mortgage its assets to invest in government bonds. The church has
considerable wealth, including property, stakes in a bank and a brewery.
This could be taking the vow of poverty a little too literally.
Incidentally I
have no sympathy for the EU in this.
Cyprus got
themselves into a mess that needs to be fixed.
But the EU
bullying is shameless and offensive.
The EU grand plan
was that Cyprus should simply grab money from the bank accounts of its
citizens to pay for its bailouts.
How naive. You
simply do not ask a country to rob its own citizens overnight.
Cyprus is a nation
of small scale savers - and a few over rich Russian oligarchs. The deal was
a political non starter.
Rich fat EU
bankers robbing brave Cypriot shopkeepers, farmers and families. What were
they thinking?
The upshot is that Cyprus has become a cautionary tale in the European
Union's most failed and yet most consistent negotiation policy: bullying.
Cyprus is small and largely unable to fight back, either politically or
financially. Its shabby treatment is consistent with how the EU has treated
other countries when it perceives it has the upper hand, Greece, Portugal,
Ireland.
It is the lack of
upfront oversight that is so disappointing. The German intelligence agency
reportedly informed leaders that Cyprus was a haven for money-laundering,
which was trotted out as a bizarre reason last week that taking money from
Cypriot bank accounts was a perfectly legitimate option. Cyprus's banks have
high interest rates on savings, and it is a tax haven, which has attracted
"hot money" from Russia and other countries.
But no one in
Europe complained about that when it was helping the Cypriot economy, but
now that a bailout is required, the equation has changed.
As I said a couple
of days ago. What next? At this stage it may be time for one or more
countries to set a tone by leaving the EU. They may be better standing alone
in the world that being the bullied, unwanted sibling.
And where are the
Russians - well here is a thought: is a prospective Russian deal with Cyprus
an indication that the Russians may be about to lose their port access,
listening stations etc. in Syria? It is probably that the prospect of a
warm-water Russian naval base in Cyprus is keeping more than one Eurocrat up
at night.
The cold war may
be over but it is still lukewarm.
Leaving the
west behind - now Chengdu gets a new airport
20 March 2103
Plans for
Chengdu's new airport have been mostly confirmed, according to a
Chengdu
Commercial Daily report.
The latest Chinese
mega airport will have five runways, three more than the current number of
Shuangliu Airport, and a passenger capacity of 80 million per year (more
than double the current annual number of passengers through Shuangliu),
making the new airport the largest in west China.
The site of the
new airport, Lujia in Jianyang county, is approximately 50 km from the
Shuangliu airport, and plans include construction of a "seamlessly
integrated" transportation to the airport encompassing high-speed rail,
subway and highways.
"No matter which
method of transportation you choose, you'll be able to reach the new airport
from Chengdu within half an hour more or less," claimed Tang Limin, Sichuan
representative at the National People's Congress and head of the Sichuan
National Development for Reform Commission.
Sichuan
representatives appealed for support of the new airport among the Congress
because Chengdu's Shuangliu Airport is among several other airports in
China, including Beijing's, Guangzhou's, and Shanghai's to have surpassed an
annual passenger rate of 30 million.
Construction is
expected to start in the first half of next year and finish in late 2017,
and the airport is expected to be in operation by 2018.
In the 5 years
that it will take to build the new Chengu Airport the UK will not see a
single new runway opened for London and will still be debating options for
expanding Gatwick and Stansted or opening a third runway at Heathrow.
Such is the speed
of progress in the New World and the moribund state of the west.
Chengdu is not the
only new large airport project; not surprisingly they are all in the near
and far east.
A six-runway hub
will be constructed on 77 million square metres of land near Istanbul, and
will have a capacity of 150 million passengers a year – 60 million more than
Hartsfield-Jackson Atlanta International Airport, currently the busiest in
the world.
The airport will be built in four stages. The first will be completed in
2017, after which it will be operational with an annual capacity of 90
million, according to Turkey’s transport minister, Binali Yildirim.
Currently Istanbul has two airports, Ataturk, which handles around 45
million passengers a year, and Sabiha, which handles 15 million.
Dubai’s Maktoum International Airport, now already operating for cargo only,
is expected to open for private jets later this year and will host the Dubai
Airshow. In the future the airport will become the new hub for Emirates
Airline, the rapidly expanding state-owned Dubai carrier but will serve as a
base for charter flights and executive jets until then.
Do not expect
Emirates to move until at least 2025 as funding has been an issue for the
new airport and associated infrastructure.
Beijing will see
its new airport fast tracked. Construction of the airport in the Daxing
district will begin as early as this year. It is due to open by the end of
2018.
There will be six runways for civilian aircraft and a seventh for military
use.
The Beijing Capital International Airport, ranked the world's second-biggest
for three years, handled 81.8 million passengers in 2012.
The new airport will be able to handle 45 million passengers each year after
the opening and it will handle up to 70 million passengers by 2025," said
Zhu Wenxin, vice head of the office set up for building the airport.
A rail line will also be built to connect the airport with the city center.
More chaos in
Cyprus as MPs court popularity
20 March 2013
The Cypriot
parliament has thrown out a controversial plan to skim €5.8bn (£5bn) from
savers' bank accounts.
So the MPs who
oversaw this mess in the first place have now decided that it is better to
be popular than to take the hard decisions.
Cyprus has just 24
hours to find a solution to its funding gap before its banks are due to
reopen following the dramatic no vote on Tuesday night.
They could of
course further delay re-opening the banks. But it looks likely that Cyprus
will go cap in hand to the Russians for a bail out.
The total bail out is Euro17 billion; the IMF and Eurozone are putting up
Euro11.2 billion leaving Cyprus still to raise the remaining €5.8 bn.
The banks have been shut since Friday and electronic transactions halted,
although cash machines are still working.
There were also reports that the banking arm of the Russian energy company
Gazprom might pump cash into Laiki, Cyprus's second largest bank, which is
in urgent need of a capital injection. Gazprom officials insisted this was
not being planned.
Russia has already lent €2.5bn to Cyprus and has close ties to the country
after its nationals flooded the island's banks with cash to take advantage
of high interest rates and a lax approach to account vetting.
The 56-member Cypriot parliament rejected the bank tax by 36 votes with 19
abstentions (one MP was absent) even after the proposal had been tweaked
during the day to remove any levy on savings below €20,000.
Accounts holding €20,000 to €100,000 still faced a 6.75% levy, and any
account with more than €100,000 a tax of 9.9%, despite calls by Cyprus's
eurozone partners not to tax accounts below €100,000 – the level at which a
European Union-wide guarantee kicks in if an EU bank goes bust.
In return for the levy, savers would be given shares in Cyprus's banks and
possibly a share in the nation's gas reserves – once the country is back on
its feet.
The no vote looks especially bad for the Cyprus president, Nicos
Anastasiades. A new election may be needed once this issue has been
resolved.
Marios Mavrides, a government MP and former finance minister, raised the
prospect of the country becoming the first to leave the euro. He told BBC2's
Newsnight: "If we cannot come up with the €5.8bn in a few days then I think
we will go to the Cyprus pound. That will be the end of Cyprus in the
eurozone. We're going to exhaust all other possibilities but what can we do?
If we have no other solution we cannot leave the people without money."
Russia has expressed its anger about the levy, which would hit its
nationals, 30 of whom are reported to have been granted Cypriot citizenship
after either depositing at least €17m into local banks, making investments
of €30m or registering businesses on the island.
The ratings agency Moody's estimated that Russian banks had extended up to
$40bn in loans to companies in Cyprus.
So another Euro
5.8 billion is pocket money to the Russians whose influence in this
Mediterranean island could grow significantly.
Yields – a measure of the cost of borrowing – on Italian government bonds
edged above 5% on Tuesday, a sign of potential tensions in the eurozone
while yields on British government bonds, gilts, fell to their lowest levels
in 2013 of 1.82% as the UK appeared a relative safehaven. Brent crude
dropped by $2 to €107.45.
What next ? The Russians are making noise but see this as an EU problem. The
EU/IMF will end up having to put up the full Euro17 billion with longer term
repayments.
To avoid any run
on the backs when they eventually reopen this deal will need to be put in
place first (so banks may not open tomorrow) and the Cypriot government will
need to definitively state that depositors funds are safe and will not be
taxed.
Cyprus closes
banks and delays vote on deposit theft
19 March 2013
Yesterday Cyprus
decided to close its banks until Thursday as officials scrambled to
renegotiate the terms of a controversial bailout that threatens to force
savers to take a €5.8bn (£5bn) hit to their deposits.
Closing the banks
simply means that depositors cannot access their funds.
Finance ministers from the 17-country eurozone in emergency discussions
agreed that small depositors should not be hit as hard as others. They said
the Cypriot authorities could stagger the deposit seizures, but remained
firm in demanding that the overall sum of money raised remained the same.
Cyprus state media said accounts with less than €20,000 may be spared.
The Russians remain outraged - a spokesman for Vladimir Putin attacked the
plan as "unfair, unprofessional and dangerous". This rather omits the simple
fact that the Russians had a major role in precipitating this crisis.
Thousands of Russians have bank accounts in Cyprus, which has styled itself
as a tax haven to attract international deposits into a banking system now
at least eight times the size of the island's €17bn economy. Russia hinted
that a separate but crucial €2.5bn loan to Cyprus could now be in doubt.
Yesterday on a day of mounting uncertainty about the punitive conditions of
the bailout and the impact on the banking sector:
• Britain temporarily withheld pension payments to more than 12,000 citizens
who have retired to Cyprus amid concerns about the safety of the banking
system. Up to 60,000 British people are thought to be affected by the
seizures.
• A vote on the aid package in the Cyprus parliament was delayed for a
second day, until Tuesday, as it became clear that the bailout plan of the
newly elected president, Nicos Anastasiades, faced defeat. There were
reports on Monday night that he was preparing to tell eurozone ministers
that he did have the votes to get the plan through.
• Stock markets fell – the FTSE 100 lost more than 100 points in early
trading – before regaining losses amid speculation that the raid on savings
would be scaled down. On the currency market, the euro hit a three-month
low.
• European officials raced to defuse criticism that they had imposed the
bank levy on a desperate nation.
• The US urged a resolution that was "responsible and fair and ensures
financial stability".
The terms of the bailout – €10bn of which comes from the eurozone and €7bn
from Cyprus through the bank levy and austerity measures – have led to
concerns that the €100,000 of savings guaranteed across the EU under an
agreement reached in the wake of the 2008 banking crisis is being
undermined.
Europe's banking authorities are on high alert for signs of Spanish and
Italian savers moving their cash out of national banks for fear of a similar
raid. However, officials insisted there was no need for alarm because the
Cyprus bailout terms were a one-off that would not be repeated.
The European Central Bank's Jörg Asmussen, who had played a part in
negotiating the terms, insisted it was up to Cyprus to alter the way the
€5.8bn was raised from bank accounts. The levy was initially set at 6.75% on
accounts under €100,000 and 9.9% on any deposit above that sum but this
could be altered to 3% on the smaller deposits and up to 15% on deposits
above €500,000. In return, savers will be given shares in the banks and,
potentially, returns from the country's gas reserves. "The important thing
is that the financial contribution of €5.8bn remains," Asmussen said. He
also denied responsibility for designing the levy. "I want to emphasise that
it wasn't the ECB that pushed for this special structure of the contribution
which has now been chosen," he said.
Senior Cypriot officials told the Guardian that Wolfgang Schäuble, the
German finance minister, had been the strongest advocate of the savers' tax,
but he insisted responsibility lay elsewhere. It had been the Cypriot
government, the European commission and the ECB that had pushed for the bank
levy, he said.
The terms of the bailout are crucial to Russia as, according to Reuters,
nearly half of the €70bn worth of deposits in Cyprus' banks is held by
foreigners, and the vast majority are believed to be from Russian officials
and oligarchs who have flocked to Cypriot banks seeking the secrecy they are
unable to find at home.
And also enjoying
up to 7% interest rates; higher rewards - higher risk. That should have been
self-evident.
Russia's finance minister, Anton Siluanov, warned that Europe's failure to
consult with Russia could affect its own decision on maintaining a €2.5bn
loan granted to Cyprus last year.
Cyprus has faced criticism that it has become a money-laundering haven for
hot Russian cash and this is thought to have motivated the levy on bank
accounts.
"Concerns about lax money-laundering regulations have made it politically
difficult for a full bailout to be provided, given the worries that rich
Russians would be among the main beneficiaries," said Jennifer McKeown,
senior European economist at Capital Economics.
Worries about contagion also grew in the day: Marchel Alexandrovich, at the
brokers Jefferies, said: "What is also plainly obvious to anyone observing
the current mess is that what should really worry European policymakers is
not the €5.6bn in money which is being saved in Cyprus, but the €2,754bn of
deposits in the Spanish banking system, of which €182bn comes from deposits
outside the euro area."
Cyprus bail out
creates more Euro chaos
18 March 2012
Cyprus is the
latest Euro mess.
But it was a mess
waiting to happen - and it is a mess brought about by its tax haven status;
the volume of money laundering; a banking sector that had grown to eight
times its gross domestic product on inflows of Russian money and aggressive
expansion in Greece and was technically bust. As much as half of the
country’s €68 billion in deposits is held by Russians and Ukrainians, and
some of this money is thought to be black money laundered through Cyprus.
Add to that a
significant exposure to the Greek economy, Greek government debt and
Cyprus’s own burst property bubble.
Nicosia’s euro zone partners made it clear that there was no
time to waste. The Cypriot president said the European Central Bank was
threatening to cut off liquidity Tuesday if there was no deal. The banking
system would collapsed without a bail out.
In total, Cyprus requires €17 billion — almost 100 percent of
G.D.P. — to rescue its banks and deal with the government’s own bills. If
Nicosia had borrowed all that cash on top of its existing debt, it would
have been carrying an unsustainable burden. It would have been only a matter
of time before the debt needed restructuring.
Cyprus’ euro zone partners and the International Monetary
Fund decided to limit the bailout to €10 billion. The problem was where to
find the extra €7 billion. Because Germany and other northern European
countries were not prepared to give a handout, there were two options: force
the government’s own bondholders to take a loss, or hit bank creditors.
Moreover the Germans (leading the EU finance ministers) did
not want to be bailing out some questionable foreign (lets agree - mainly
Russian) money that is deposited into Cypriot banks.
The option of a haircut on government debt — as Greece
imposed last year — was rejected. Many of the bonds are held by Cypriot
banks, so a haircut — a loss on investment — would just have increased the
size of the holes in their balance sheets, meaning they would have needed an
even bigger bailout. The Cypriot government’s credit would have been
destroyed for little benefit.
So, pretty much by default, the banks’ creditors had to be
tapped. Cypriot banks have hardly any bonds. Without this cushion the only
option was to hit depositors, for €5.8 billion in total.
Holders of bank deposits are up in arms; but the country’s
banks have been paying high interest rates in recent months — in some cases
of as much as 7 percent on euro deposits. That was clearly danger money.
Depositors should have known there were risks attached to such high rewards.
So who is being hit - the proposal has a deposit tax of 9.9%
on uninsured deposits and a 6.75% tax on insured savers.
There is time to change the deal - as it was not voted on in
Parliament today - one way would be to impose a bigger tax (15%) on
uninsured deposits and not touch small savers.
It is a lousy deal for everyone. It is not meant to set a
precedent but to reflect Cyprus' very different economy and banking system.
It probably means the end of Cyprus status as an offshore financial
centre.
Across Europe there will be some concern though there is
unlikely to be any immediate contagion to other crisis countries. Banking
systems in Greece, Spain, Portugal and Ireland have recently been
recapitalized. Meanwhile, the combination of Cyprus’s relatively huge
banking sector and the fact that it is perhaps small enough to experiment
with make it a special case.
Even so, citizens in the rest of the euro zone now know that
if push comes to shove, their insured deposits could be grabbed too.
Makkasan -
Bangkok's worst white elephant
18 March 2013
I took the airport express from BKK airport to the Makkasan terminal this
morning.
I was one of five
people on the train. And the train only runs once an hour. That is if you
can find the train at BKK airport. And if you can find a timetable. There is
no indication on the platform of when the next train would appear.
There are in fact
two express train lines. One runs to the Makkasan station each hour. The
other runs to Phayathai Station again one an hour.
The original plan
was for the express link to depart--and check-in--only from the Makkasan
station. Makkasan would serve as a city terminal like Hong Kong or Kuala
Lumpur. Fail. Makkasan is not connected to the subway line or BTS and road
access is dire. It is a hot long walk across a rail track and busy junctions
to MRT Petchaburi.
THAI Airways
remains the sole airline allowing passengers to check in from the train
station. There was no one there when I looked this morning.
The Phayathau line
opened on 1 June 2011. This second line is due to a design flaw in the
original laying of the rail which meant that the Express line track
terminates at Makkasan and does not connect with the Cityline track further
to Phayathai. The SRT allocated 17m baht in Feb 2012 to rectify this
problem. Still no progress.
Bangkok Airways
discontinued baggage check-in service at Makkasan on 13 June 2011.
There are as few
as 20 or less passengers checking in at Makkasan per day.
The Makkasan
terminal is masssive. It is also empty. A poorly thought out and ill
conceived white elephant. Fix it or close it.
EK's cargo
division off to JXB
16 March 2013
Emirates will
transfer its cargo fleet from Dubai International Airport to Dubai World
Central Airport (DWC), Emirates president Tim Clark told ATW on the
sidelines of the ITB tourism fair in Berlin.
A truck system will be established between the two airports to handle
Emirates’ belly cargo from its passenger aircraft and vice versa. “It is
necessary that the current airport must provide that relief [from busy Dubai
Airport to DWC],” he said.
Those trucks will
have to use the 611 Outer Dubai by-pass road.
CEO Paul Griffiths told ATW that Dubai Airport has a limit of 100 million
passengers. After that, airlines must move to DWC. “At a time when Emirates
will handle around 80 million passengers, this would not be easy to move the
carrier to the new airport,” Griffiths added.
Both Clark and Griffiths said Emirates could make a complete move to DWC in
2025.
DWC will open for first passenger operations in September. The plan is to
create additional terminal infrastructure to handle about 20 million
passengers. Emirates also expects to operate some charter services from
there.
Emirates operates four Boeing 777Fs and three wet-leased 747Fs; it has six
777Fs on order.
The demise of
Tweetdeck
6 March 2013
This is an announcement from the nice people at Tweetdeck - which is
basically telling users like me to get lost !
"TweetDeck is the most powerful Twitter tool for tracking real-time
conversations. Its flexibility and customizable layout let you keep up with
what’s happening on Twitter, across multiple topics and accounts, in real
time. To continue to offer a great product that addresses your unique needs,
we’re going to focus our development efforts on our modern, web-based
versions of TweetDeck. To that end, we are discontinuing support for our
older apps: TweetDeck AIR, TweetDeck for Android and TweetDeck for iPhone.
They will be removed from their respective app stores in early May and will
stop functioning shortly thereafter. We’ll also discontinue support for our
Facebook integration.
Over the past 18 months, we’ve been focused on building a fast and
feature-rich web application for modern browsers, and a Chrome app, which
offers some unique features like notifications. We’ve recently introduced
many enhancements to these apps –– a new look and feel, tools like search
term autocomplete and search filters to help you find what you’re looking
for more quickly, and automatically-updating Tweet streams so you
immediately see the most recent Tweets. Our weekly web releases have been
possible because we’ve nearly doubled the size of the TweetDeck team over
the past six months (and we’re still hiring).
In many ways, doubling down on the TweetDeck web experience and
discontinuing our app support is a reflection of where our TweetDeck
power-users are going. Over the past few years, we’ve seen a steady trend
towards people using TweetDeck on their computers and Twitter on their
mobile devices. This trend coincides with an increased investment in Twitter
for iPhone and Twitter for Android –– adding photo filters and other editing
capabilities, revamping user profiles and enhancing search. That said, we
know this applies to most of our users –– not all of them. And for those of
you who are inconvenienced by this shift, our sincere apologies.
Additionally, TweetDeck AIR, TweetDeck for Android and TweetDeck for iPhone
rely on v1.0 of Twitter’s API, which we are retiring starting this month.
Leading up to that retirement, Twitter’s platform team will be performing
occasional tests that will affect applications that rely on API v1.0. Over
the next two months users of TweetDeck AIR, TweetDeck for Android and
TweetDeck for iPhone may experience some outages with those apps before they
are removed from their respective app stores in early May.
We think these web and Chrome apps provide the best TweetDeck experience
yet, and that they are the apps in which you’ll want to see us add new
capabilities first, followed closely by our Mac and PC apps.
From the whole TweetDeck team, we’re excited about what the future holds. We
hope you are too."
No - not excited at all.
Middle East is
new global travel crossroads
5 March 2013
Scott Mayerowitz, AP Airlines Writer
It's 1 a.m. and the sprawling airport in this desert city is bustling.
Enough languages fill the air to make a United Nations translator's head
spin.
Thousands of fliers arrive every hour from China, Australia, India and
nearly everywhere else on the planet. Few venture outside the terminal,
which spans the length of 24 football fields. They come instead to catch
connecting flights to somewhere else.
If it weren't for three ambitious and rapidly expanding government-owned
airlines — Emirates Airline, Etihad Airways and Qatar Airways — they might
have never come to the Middle East.
For generations, international fliers have stopped over in London, Paris and
Amsterdam. Now, they increasingly switch planes in Dubai, Doha and Abu
Dhabi, making this region the new crossroads of global travel. The switch is
driven by both the airports and airlines, all backed by governments that see
aviation as the way to make their countries bigger players in the global
economy.
Passengers are won over by their fancy new planes and top-notch service. But
the real key to the airlines' incredible growth is geography. Their hubs in
Qatar and the United Arab Emirates are an eight-hour flight away from
two-thirds of the world's population, including a growing middle class in
India, China and Southeast Asia that is eager to travel.
In the past five years, the annual number of passengers traveling through
Dubai International Airport — home to Emirates — has jumped from 28.8
million to 51 million, a 77 percent increase. The airport now sees more
passengers than New York's John F. Kennedy International Airport.
"Everybody accepts that the balance of global economic power is shifting to
the east. The geographic position of the Gulf hubs makes them much more
relevant today," says Willie Walsh, CEO of International Airlines Group, the
parent company of British Airways and Iberia.
Persian Gulf carriers are already chipping away at some U.S. and European
airlines' most lucrative business: long-haul international flights. But it's
what's ahead that really has other airlines worried.
Gulf carriers hold one-third of the orders for the Boeing 777 and Airbus
A380 — two of the world's largest and farthest-flying jets. That's enough
planes to put 70,000 passengers in the air at any given moment.
"They're being very aggressive," says Adam Weissenberg, who heads the travel
and hospitality consulting group at Deloitte. "These airlines are not going
away."
Modern day air routes can be traced to the post-World War II era when
airlines such as Pan Am and British Airways built the first global networks.
Flights from New York would cross the Atlantic, stop in Europe's capital
cities to refuel and then head on to Africa, India and eventually Asia. Two
generations later, those routes mostly remain.
The Gulf carriers are trying to change that. And they have a lot going for
them.
Their hubs are in warm climates with little air-travel congestion and cheap,
non-union workers. That means runways never shut down because of snow,
planes don't circle waiting for their turn to land and flights aren't
canceled by labor strikes as they often are in Europe.
"These guys are making the connection as seamless as possible," says John
Thomas of L.E.K. Consulting.
Top-paying passengers are given over-the-top service that bolsters the
airlines' reputations. On some Emirates planes, first-class passengers get
private suites with doors, a 23-inch television, minibar and a phone to call
flight attendants. If that's not enough, a "Do Not Disturb" sign can be
switched on.
There are spa-like restrooms with heated floors and a shower.
But what really makes these Persian Gulf airlines unique is their focus on
direct flights to smaller cities. The hub system they are developing is
similar to what U.S. airlines did a generation ago, which allowed passengers
to fly from, say, Knoxville, Tenn. to Sacramento, Calif. with just one
connection.
"Forget Mumbai and New Delhi. There's another 40 secondary cities in India
that I can take advantage of," says Etihad CEO James Hogan.
Airlines and governments in North America and Europe have been fighting back
where they can.
In Canada, the government has limited the number of planes that Etihad,
Emirates and Qatar can land at its airports. The move protects Air Canada,
and its partner Lufthansa, which have a good business flying Canadians to
India, Africa and Asia.
Separately, Lufthansa has tried to block the Gulf carriers' access to German
airports. Etihad responded by purchasing 29 percent of rival Air Berlin,
gaining entry to key European cities. It also owns 40 percent of Air
Seychelles and smaller stakes in Virgin Australia and Irish carrier Aer
Lingus.
"Working against us or trying to isolate us will not succeed because there
is a very clear vision behind these airlines and we will keep on expanding,"
says Qatar's CEO Akbar Al Baker.
There has been a recent thaw. Emirates struck a 10-year deal with Australian
airline Qantas; Etihad partnered with Air France-KLM on some routes; and
Qatar is joining a global airline marketing and frequent flier partnership
headed up by American Airlines and British Airways.
Still, there is plenty of worry given the size of the Gulf airlines' jet
orders and concerns that they are deeply subsidized by their governments.
European airlines have suggested that the Gulf carriers benefit from access
to discounted oil, a favorable tax climate and non-union labor, particularly
low-wage immigrant workers from India and Pakistan.
But the biggest perk comes from Middle East governments who are investing
heavily in attractive, efficient airports.
The Qatari government is building a $15.5 billion airport in Doha, designed
to handle 24 million people each year, nearly six times the capacity of the
existing facility. In Abu Dhabi, the capital of the United Arab Emirates,
the government is building a sprawling terminal twice the size of The Mall
of America.
And construction was just completed in Dubai of a concourse designed
exclusively for Emirates' fleet of Airbus A380s. The new building has entire
floors dedicated to first and business class customers who board directly
from lounges, never interacting with coach passengers.
"Governments here understand the power of connectivity to drive economies,"
Tony Tyler, CEO of the International Air Transport Association said in a
recent speech in Abu Dhabi.
The airlines deny getting special treatment.
Emirates got $10 million in startup cash from the government in 1985. The
airline's president, Tim Clark, says his airline has had no assistance since
and benefits from economies of scale. The airline reported a net profit of
$628 million in its last fiscal year.
"People keep saying we're cheats," he says. "What they can't understand is
that something could be as good and profitable as it has been without
subsidies. You know why? Because they've all had subsidies themselves and
they still can't make it."
Clark says the U.S. government subsidizes airlines by allowing them to wipe
out debt in bankruptcy court. All three of the largest U.S. airlines —
American, Delta and United — have used the courts in the past decade to
restructure.
European airlines stand to lose the most business because of their
geography, but that doesn't mean that U.S. carriers aren't watching closely.
The three Gulf airlines already fly to Chicago, Dallas, Houston, Los Angles,
New York, San Francisco, Seattle and Washington and are adding flights at
breakneck pace. The airlines aren't just dipping their toes into these
markets; they are diving in, in some cases with giant double-deck Airbus
A380s that can seat 489 passengers.
"I think they are a clear threat, much more so to our European and Asian
colleagues, but nonetheless a threat to U.S. airlines as well," Jeff Smisek,
CEO of United Continental Holdings Inc., said at an investor conference last
March. "They have a very good product. And they have the total and absolute
support of their governments."
The airlines are not household names yet, but they will be soon, analysts
say.
United was a key sponsor of the U.S. Open tennis tournament for more than a
decade. But last year, Emirates took over with a seven-year deal reported to
have cost $90 million.
Iraq ten years on - the slow road back
2 March 2013 -
The Economist
Mesopotamia, the ancient name for Iraq, means “land between the rivers”.
Today, though, the lines which divide the country, not those which
circumscribe it, matter most. In the north and south people are emerging
from the deepest of traumas into a world of possibilities. The virtually
independent Kurdish region and the oil-rich Shia provinces already enjoy
peace and a fair, or rising, degree of prosperity. Between them, though, the
heart of the country is trapped in ethnic and sectarian strife, vicious
political factionalism and foreign meddling. Iraq’s prime minister, Nuri al-Maliki,
behaves like a mafia don; his bickering rivals look little better.
Ten years after the invasion grandly called Operation Iraqi Freedom, and
barely 15 months after the last American troops left, the signs of their
arrival and passing are scant. Aside from the giant new American embassy in
the capital, Baghdad, the monuments of triumph are concrete barriers and
checkpoints, fleets of discarded gas guzzlers and the jarring sight of Iraqi
soldiers decked out like GIs with sunglasses over their eyes, night-vision
gear strapped to their helmets, laser torches and M4 rifles by their sides.
Less tangible but more pervasive are the dashed hopes and unfulfilled
promises. “They spent a trillion dollars and didn’t leave us a single
building,” sniffs an Iraqi politician who once cheered America’s presence.
That is a bit harsh. Even Iraqis with bitter memories of the invasion and
occupation, the death toll from which has never been definitively
established, accept that without foreign armies they could never have
toppled Saddam Hussein, the tyrant who dragged the country from calamity to
disaster over the three decades to 2003. “They lifted the lid on the tomb we
lived in,” says Sarmand al-Taie, a newspaper columnist. “It’s not their
fault we haven’t completely climbed out.” The Americans made terrible
mistakes, yes, but so have we, is a common refrain.
Baghdad, where just under a fifth of Iraq’s 33m people now live, remains a
maze of compounds and security cordons. On a recent Friday, getting from the
city’s old bazaar to Firdos Square, just three kilometres (two miles) away,
required a 21km detour. Iraqis endure endless checkpoint queues in return
for a lower chance of being caught in a blast or shoot-out. The frequency of
attacks has fallen drastically since the sectarian bloodletting of 2006-07,
and seven of Iraq’s 18 provinces have murder rates lower than Canada’s. But
in Baghdad and the provinces around it outrages still recur with numbing
regularity. On February 17th a wave of car bombs in Shia parts of Baghdad
killed at least 30 people.
The capital has some new buildings and fancy shop fronts. But they are rare,
suggesting that private investment remains a timid trickle. Armies of street
vendors plying their trade through the traffic jams reflect the fact that
less than 40% of Iraqi adults have a job, and that a quarter of families
live below the World Bank’s poverty line, statistics little improved since
the dark days of crushing UN sanctions in the 1990s. Asked how many students
Mustansiriya University has, one of them replies glumly that there are about
12,000, “which means we add 4,000 to the ranks of unemployed every year.”
Umm Wafa, who with three daughters shares space among 580 other families in
an abandoned military hospital on the city’s tattered outskirts, reckons
just 5% of her fellow squatters earn a steady income. The house she was
forced to flee in the Dora district, occupied now by hostile Sunni
neighbours, stands tauntingly close. She gets no state support, and has yet
to win compensation for her property despite seven years of government
promises. Some 370,000 other internal refugees crowd Baghdad, half in
unserviced squatter settlements.
A dozen checkpoints and a 150km of potholed highway to the south the picture
looks impressively different. New flyovers lit by solar-powered lamps,
multi-storey car parks and flashy hotels ring the centre of Najaf, a focal
point of Shia pilgrimage. The city’s biggest attraction, the shrine of Imam
Ali, is getting new gilding on its dome. A $600m, 56,000 square metre
extension, designed by Iranian architects, will triple its footprint. The
chamber of commerce boasts of $7 billion of foreign investment. “I’m
optimistic about the future of this city,” says Haidar Salman, a professor
at the city’s Islamic University, “but not so much about Iraq.”
Najaf’s Shia seminaries, historically pre-eminent, were overshadowed during
Saddam’s rule by those of the rival Iranian holy city of Qom. Now they have
reclaimed their place, says Sheikh Fouad al-Torfi, a mullah imprisoned by
both Saddam and the Americans. Najaf’s Grand Ayatollah Ali al-Sistani is
accepted by nearly all the world’s 150m Shias as the brightest light of the
age. Most Shia religious authorities, Iranians among them, have opened
offices here, some attracted by greater freedom compared with Qom.
The Shia Mecca’s revival is fuelled by a dynamic private sector. The same is
true of Kurdistan, which is also booming; it even enjoys power 24 hours a
day. In the centre, though, creaky bureaucracy, bickering politicians and
lingering insecurity stymie Iraq’s progress. The state employs 3.5m
people—65% of the workforce—and accounts for 70% of GDP. It relies for its
income almost entirely on oil revenues, which now average $8 billion a
month. A recent survey by the International Energy Agency suggests exports
could double by 2020, though this will not be easy (see box on next page).
In much of the country the private sector is shackled. The World Bank ranks
Iraq 165th out of the 185 places rated in its latest index on the ease of
doing business; it says that shipping a container in or out of Iraq takes
four times as long, and costs three times as much, as it tends to elsewhere
in the region. Worse, the bank reports no legislative attempts in the past
five years to make access to credit easier or speed the procedures to start
a business. Iraq’s lawmakers have been too busy fighting political battles
and dividing spoils among parties to attend to such practicalities. The
electricity in Baghdad seldom stays on more than a few hours at a time,
though new plants are being built.
Najaf and the south are doing so much better than Baghdad largely because
the Shia majority there feels satisfied with the post-war settlement. From
1546, when the port city of Basra was captured by the Ottoman empire, to the
invasion of 2003, Sunni-led states held sway over the Tigris and Euphrates
valleys, although the most thickly populated part of the country, south of
Baghdad, is largely Shia (see map). The Shia sense of disenfranchisement
peaked under Saddam and his mostly Sunni henchmen, whose notion of
nation-building included genocide against Kurds and mass execution for
members of Shia religious parties they thought allied to Iran. The regime’s
previously indiscriminate brutality took a sectarian turn after a failed
Shia uprising in 1991.
Understandably, Shias are tempted to regard their current dominance of Iraqi
politics with righteous triumphalism. Since the first democratic elections
in 2005, Shia-led parties, many of them with clerical or Islamist roots,
have had a majority in Iraq’s parliament, as well as the prime minister’s
office. They control local government in nine southern provinces. Ordinary
Shias share the Najafi businessman’s contempt for Baghdad’s political
logjam. Sunni claims of having become Iraq’s new, marginalised underclass
fall on deaf ears.
Since mid-December mass protests in the style of the Arab spring have kicked
off in Sunni-majority provinces to the north and west of Baghdad. The
trigger was the arrest of more than 100 men in the entourage of Rafi Issawi,
Mr Maliki’s Sunni minister of finance. A similar move by police units
controlled by the prime minister forced Tariq al-Hashemi, a Sunni deputy
prime minister, into exile in 2011. In Mr Issawi’s case all but nine
bodyguards were soon released, but the arrests still raised simmering Sunni
anger to its boiling point.
That should have come as no surprise. Diplomats reckon that Iraq’s myriad
security services in recent months have held something like 10,000 people,
disproportionately Sunnis, in custody on terrorism-related charges. This is
similar to the number once held by American forces. The Baghdad government
has suspended salaries the Americans paid to Sunni militiamen. The residents
of some Sunni parts of Baghdad are subjected to humiliating searches when
leaving their neighbourhoods; on Fridays, days of prayer and protest, they
are not let out at all.
Mr Maliki has responded to Sunni protests with concessions, promises and
veiled threats. A committee he formed to hear their demands says it has
released more than 2,000 prisoners, and resumed or increased salaries for
74,000 militiamen. Despite one incident in January when police opened fire
on a mob in Falluja, an ever-restive Sunni city, killing five, security
forces have for the most part avoided confronting protesters.
Shia politicians warn that their own constituents are increasingly alarmed
by the sight of Baathist slogans and jihadist banners in the Sunni protests.
They are terrified that the increasingly sectarian civil war in Syria could
create a hostile, Sunni-led post-Assad neighbour. Some speak of the need to
rearm and prepare for another round of sectarian conflict.
Mr Maliki, who first came to power as a compromise prime minister in 2005
and then patched together a flimsy government in 2010, bears much of the
blame for provoking these tensions. The move against Mr Issawi baffled Iraqi
and foreign observers, who see Mr Maliki’s grudging response to the
subsequent anger as foolishly inadequate. The grievances of the Sunnis who
feel ignored go beyond salaries and harsh policing to a more general anger
over rampant corruption and resentment of Mr Maliki’s dictatorial
tendencies.
Yet most observers seem to think Iraq can avoid returning to mayhem. Few in
Iraq’s political class relish the idea of renewed conflict, says a
London-based analyst. He cites as positive signs that Sunni protests have
remained peaceful so far, and that calls for the removal of Mr Maliki or
scrapping the 2005 constitution, the drafting of which most Sunni
politicians boycotted to their later regret, have failed to gain traction.
Some Shia politicians, including Muqtada al-Sadr, a young cleric with a
strong following who was long branded a dangerous firebrand, have even
voiced sympathy with Sunni demands.
If there is no dire reason to fear things getting worse, though, there is
not much hope for improvement either. Iraq’s politics are a mess of
micro-parties in ever-shifting alliances. In the 2010 elections a centrist,
secular-leaning bloc, Iraqiya, actually won more seats than Mr Maliki’s
party, but fell to bickering amid the peculiar reluctance of its leader,
Iyad Allawi, to visit parliament. The political class’s rejection of
seemingly sensible reforms and proclivity for intrigue and factionalism have
strengthened Mr Maliki as much as his determination to divide and rule.
Mr Maliki’s efforts to control military appointments, his use of state perks
to woo defections from opposition blocs, his abuse of police power and his
increasingly brazen appeals to Shia sentiment are all lamentable. Yet these
may also be seen as natural responses to the pressures on him. “I’m not sure
that anyone else would act much different, and it’s not as if the opposition
are offering any alternative,” says a diplomat in Baghdad.
Western diplomats are often irked by the blind eye Mr Maliki turns to
Iranian influence in the country—but they also understand that it is
inevitable. The Islamic Republic sponsors several armed and virulently
sectarian Shia factions. It also, to the annoyance of Western countries and
Sunnis, flies regular cargoes over Iraqi airspace to bolster the flailing
Assad regime in Syria. But this does not mean that Iraq is fully under
Iranian sway. Very few of Iraq’s Shia leaders subscribe to Iran’s state
ideology of velayat-e faqih, the guardianship of the jurist. And in
increasing its oil exports Iraq is clearly pursuing its own interests, not
its neighbour’s. The extent to which Iraqi exports have steadied oil prices
vexes the cash-strapped and sanctions-crippled regime next door.
“We share Iran’s concerns about Syria, but not its strategic interests,”
explains Naama Obaidi, a cleric who runs a Najaf think-tank. “And we respect
that Iran, which fought a long war with us, and faces big threats, should
exert lots of its intelligence effort here.” But while Iraq is willing to
accommodate Iran, he says, it will not embrace it fully—unless pushed by
fear of its Sunni neighbours.
One of those is Turkey, which has often appeared to consider Iraq’s Shia-dominated
government as a catspaw for Iran and acted accordingly. Turkey’s prime
minister, Recep Tayyip Erdogan, has repeatedly clashed with Mr Maliki. Iraqi
officials contend that their neighbour to the north, which runs a thriving
$17 billion trade with Iraq, has promoted both Kurdish and Sunni obstinacy
in dealing with Baghdad. A Western official says that it would be hard to
exaggerate Turkey’s recklessness.
Mr Maliki will probably serve out the rest of his current term, which ends
in April 2014. That is not good news for Iraq, but not entirely bad, either.
Just keeping a lid on things, as oil revenues grow and begin to percolate
downwards, may be a realistic ambition for a country divided internally and
surrounded by strife. Muwafaq al-Rubaie, a former national security adviser
of courtly demeanour who displays the noose that hanged Saddam in his
heavily guarded villa beside the Tigris, insists that Iraq’s trajectory is
generally upwards, not steeply so but recognisably. “Compromise in Arabic is
a bad word,” he says, “but reaching it at the eleventh hour is one thing we
have learned.”
Bastakiya gets renamed
2 March 2013
Dubai has embarked
on a series of renaming of streets and districts - all very confusing when
you are just getting used to existing names. And it seems that shorter,
simpler names that meant something are to be replaced by the names of UAE
families or historical events.
Satwa's Al Diyafah
Street has been renamed December 2nd Street (December 2nd being the UAE's
National Day, marking the establishment of the Emirates in 1971), the
Emirates Road is now Sheikh Mohammed Bin Zayed Road.
Business Bay
Bridge was originally called the Ras Al Khor Crossing and, of course, the
Burj Khalifa was long intended to be the Burj Dubai.
Now Bastakiya is to be renamed.
And it will be
known as the rolls off the tongue Al Fahidi Historical and Cultural Area.
It is nice part of
town. Some old style adobe buildings and paved walkways, barasti roofs,
little bed and breakfast hotels, cafes and galleries.
Shame about the
new name.
In other tourist
news more than 1,000 animals and birds of Dubai Zoo will get a new home soon
as the first phase of the eagerly awaited Dubai Safari will be ready by the
end of March.
Dubai Municipality
says that 80 per cent of the levelling, internal roads and parking works in
the project have been completed, with the rest expected to be ready by the
end of the first quarter.
The Dh150 million project is located in Al Warqa 5 on Aweer Road.
Stage one of Dubai Safari includes a Butterfly Park, entertainment and
recreational facilities and covers 60 hectares.
The Safari will be divided into different sections — like African, Asian and
Arabian — for animals coming from different geographical locations, with
architecture and landscaping to match.
As the project completes animals from the old zoo will be moved to the new
location.
Now it is The
Emirates Old Trafford - Emot !?
28 February
2013
The football and
cricket grounds of Old Trafford will officially be known by different names
for the first time since 1936 as the result of a 10-year sponsorship deal
struck by Lancashire with Emirates Airline to help the club pay for their
stadium's substantial redevelopment.
The deal means that the Emirates name will be attached to two of this
summer's five Ashes Test grounds, as the airline has held naming rights to
Durham's ground in Chester-le-Street for the past
three years – so the third Test will be at Emirates
Old Trafford, the fourth at the Emirates Durham International Cricket
Ground, and the fifth at the Kia Oval.
Traditionalists will be relieved that the first two Tests are being staged
at Trent Bridge – Nottinghamshire having insisted only this week that they
have no intention of selling naming rights to their ground, which their
chief executive Lisa Pursehouse likened to "selling our soul" – and Lord's,
where the MCC seems highly unlikely ever to need to entertain the idea.
However Warwickshire are hoping to secure naming rights for Edgbaston before
the end of the summer, and Yorkshire's ground has been officially known as
Headingley Carnegie since 2006 under a deal between their Leeds rugby
landlords and the city's Metropolitan University.
The bulk of the county grounds that do not stage international cricket have
had naming rights for some time – Sussex will begin this season not at Hove,
but at the brightonandhovejobs.com County Ground, so even Lancastrian
diehards may feel they have had a lucky escape.
There have long been fears that the Manchester ground, which first staged
Test cricket in 1884 – the second English cricket ground to do so, after The
Oval – would be renamed Tesco Old Trafford, after the supermarket chain
provided around two-thirds of the cost of a £32m redevelopment that will be
completed with the opening of an expanded and substantially renovated
pavilion this summer. But Emirates has instead expanded a cricket portfolio
which includes support of umpires and other match officials as part of a
partnership with the International Cricket Council – which is also based in
Dubai.
"This association highlights our continued investment in Manchester and the
surrounding region, a hub which we see as vital to our operations in the
UK," said Sir Maurice Flanagan, the airline's executive vice-chairman – who
was born in nearby Leigh, and once even sponsored that town's rugby league
team.
Perhaps the presence in the city of Etihad, the Dubai airline's local rivals
from Abu Dhabi which bought naming rights to the City of Manchester Stadium
in July 2010 as part of its funding of Manchester City, also added to
Lancashire's appeal.
|
|
|