ASEAN SUMMIT - WHAT TO EXPECT – Overview by Nik Zafri

PHOTO SOURCE : MALAYMAIL

Disclaimer: The following reflects my personal opinion and interpretation, based on open sources available both internationally and domestically. The information presented here is considered to be in the public domain. However, readers are encouraged to refer to the original sources for accuracy and context. The author bears no responsibility for any inaccuracies, misinterpretations, or consequences arising from the use of this content.

WHAT KIND OF WORLD WE'RE LIVING IN? (NIK ZAFRI)

Originally written on 8 May 2010 at 22:07

We are now living in the world full of uncertainty. With the fast pace of globalization, we too are trapped within the dimension of the unknown and unprecedented.

The word 'Power' now is in the game.

Power has always been linked to two things and two things only - good and evil - mostly evil for those who choose to abuse it. Innocent human beings; without realizing what is happening; continue to live in oblivion (mind you...not the video-game) because of the continuous misappropriation of power occurring everywhere around the globe. (I wonder if the Illuminati mind control using 'invisible technology' is true after all)

The chain effect becomes faster and greater when you; readers; and I; writer says that :

"Aaaah..that's life, so what? Just shut-up and move along - as long as we don't disturb one another, we'll be fine".

Ironically this is still too far from the truth and the reality. Look around you!!

Whenever we say these words, we tend to be lead astray with such rethorical and nonsensical philosophy. When?

When our own planet being colonized, our resources, our lands, our houses, our money etc by unscrupulous illogical human beings who thinks that possessing such 'Power' and 'Influence' will be eternal. And what do they say to you?

"This is Progress...this is Development.... Learn to live with it" and by a blink of an eye,your backyard becomes a development project. If you're lucky enough, you will be given some money and you're gone - shifting from one place to another.

Behind you, the actual words would be :

"You're backwards, you're uneducated, you're dumb, you're anti-progress etc"

My replies would be :

Yes, I'm 'anti-progress' because I'm against people who cut down shady trees or destroy greeneries (for no obvious good reason)

Yes, I'm 'uneducated' because I say : "wow...is this global warming..so burning hot!!

....while walking from my house to the stall just 700m away (been doing this for the last 9 years - for health purposes) - perspiring heavily and rapidly dehydrated - not even a single car wish to stop and give a ride - such jerks!! (those days it was not this HOT)

And Yes, I'm 'dumb' for not following the current destructive trends

Am I the only one who's reacting unexpectedly to the climate changes?

Does climate-shift has something to do with my erratic behaviours?

As I see the progress in the human chronicles - I see :

a) wireless technology evolutionizing itself - WAP, Bluetooth, 3G, 4G etc, PAN, Wi-Fi, Wi-Max, Broadband, X-Max etc.

But I also see some human beings using 'sophisticated gadgets' are smiling ironically when they see others using a normal conventional mobile phone and in their hearts "Man..you're no where to me"

b) people working and walking in KL, New York, London and other big cities – not having much time to talk to one another - perhaps they are too busy.

But I also see people who are working/walking rarely care for others - say...when they witness accidents happening right in front of their eyes or pickpockets forcibly steal other people's property or hearing arguments which may end or proven fatal,

And I also witnessed people who are too busy rarely looking at elements of poverty amidst the city hustles. They don't care as long as they are OK with money - pay their taxes, zakats/fitrahs etc. then there is no time to have mercy on others.

Ultimately, I now see elements of the dark sides forming - betrayals, ruined marriages, self-centred attitudes, ruined families, liars, swindlers, cheaters, robbers, thieves, gangsters, racists, extremists etc.

So, this is what we have become – more complex under the pretext of “the new way of life” ? or "This is trendy"??

Well..to add up - we see diabetes, hypertension, cardiac arrests, aches here and there etc.

1) So, what modern economics say about equal distribution of wealth are simply lip service?

2) People are telling me about renewable energies – has it been equally distributed?

3) Sustainable Development - is there such a word?

4) How about politics nowadays? Where is it heading?

5) I wonder; in the near future; will I still see tranquility in flora and fauna, beautiful sandy beaches, orchards etc.

6) Will the earth be healed of so much wounds caused by homosapiens?

7) Why are the teenagers today have their own styles, their own terminologies etc.?

8) Will I be left behind and be accused of 'lack of progress' or 'not following the current trend?'

9) Where did innocent little children learn how to swear, curse etc. (wanna prove me wrong? wanna bet? Just visit any cybercafe and look at the kids (as young as 7 years old - I wonder where are their parents?) who are playing games..what do they say when they loose?)

10) Some people fantasizing and delusioning that "he/she is the MOST popular person in the world" or "he/she is the SAVIOR", "he/she is the fairest, most handsome of all", "he/she is the richest of all", "he/she is the most glamorous of all"...gosh.... :-)

11) People who claim that they're so educated and advanced thinking YET fall for online scams, get rich quick scheme, money laundering, pyramid scheme, urban-legends etc. Worse...some bogus doctors, shamans, bomohs/dukuns etc.

12) People who are not thankful for what or who they are - naturally. One who sees, ignores, hates and overlooks the local culture and tried to blend with 'other people's culture' and dare to claim that this 'new culture' are theirs since they were born...this is the BIGGEST JERK OF ALL!

What would be the solutions? Have you got the answer?

K-ECONOMY, K-MANAGEMENT, K-ORGANIZATION,HUMAN CAPITAL, ICT – YOU'RE STILL CONFUSED? (BY NIK ZAFRI)

The battle of defining knowledge management is a never ending story.

(Cummon guys....it's 2010 now..what? you wanna wait till 2020..gosh)

To me KM; having working with bluechips that have proven themselves worthy to be called a KM and KE (Knowledge-Based Economy) – based organizations, I would still agree that :


“KM is a organizational-wide collecton of practices and approaches to generate, capture, disseminate the know-how and others relevant with the perspective of business sustainability and profit”

This is the best definition I see so far.

To those who are or has directly been involved in organizational KM will understand exactly what this definition mean.

The definition has; to a highest degree; harmoniously combined both organizational empirical PROVEN VALUES with ICT as enablers. (Mind you - please do not provide me hypotheses in your counter comments to this article as what I've said herein have been substantiated with proof. )

KM in these organizations is no longer a buzzword, lip-service or trendy – KM is a MUST to them in order to cope up with rapid changes as we are no longer absorbed to the ancient story “who moved my cheese”.

I've seen companies' thrill of victory - making billions due to proper applicaton of KM. Unfortunately; due to certain constraint; I can't reveal any of the companies name as these are their secret recipes of success – trust me (so don't ask)

But on the other hand, I've also witnessed companies' agony of defeat being closed even go bust – due to WRONG applications used and wrong way of 'hybriding' management systems. In the end, the practitioners themselves tend to be CONFUSED themselves.

Communication has evolved rapidly due to the phrase 'knowledge sharing'. It helps in the context of maintaining the 'one captain in one ship' and 'one (management) game plan'. Grapevine at its best!!

We are no longer alone!

If we have to collaborate, then do so!
If we have to be a smart partner or associate, then be one!
If we have to merge; merge then!

(But why the defensive and protective attitude..you wanna go global - don't you, you wanna grow bigger, don't you?)


K-Economy unlike P-Economy (although productivity is still an inevitable issue) everything and everyone in any organization will have a certain impact on the overall economy itself.

Better – these organizations can still 'make money' during recession. (yes, this is what I'm talking about – bearish during good times and bullish to make a comeback during 'bad times')

Face it - Today - economy NO longer depends solely on the "conventionals" such as movement of composite index in the stock market, inflation/deflation, candlestick/technical charts, oil price, USD, political & psychological sentiments, bull or bear, speculation or hedging etc.

BUT

rather we are seeking a more convincing story like PROPER JUSTIFICATIONS or 'COHERENT FACTORS' to JUSTIFY of WHY are there economical fluctuations? or WHY are the charts indicating erratic trends or probably WHAT has political sentiments got to do with the stock market etc. (in laymen terms - not limited only to economist but people at large as well regardless of who they are or where they come from)

(I recalled the The Oracle advising Neo in Matrix Reloaded:

“You didn't come here to make a decision, you already made the decision, now you need to understand WHY you make such decision” (something like that)

So, these justifications require KNOWLEDGE – proper KNOWLEDGE from your own skills, competencies, experience etc. Even paper qualifications are no longer a priority.


“Today – Nik, if there is no control on qualifications being issued, one day you throw a stone in the air, it will definitely hit on a Master Degree Holder's head”

– quoting what the-then Prime Minister, the living legend – Tun Dr. Mahathir once said to me in 1995 when doing the site-walk during the construction of KLCC Petronas Towers.

Tips :

Understand first the scope of service or product provision that your company is doing.

Draw up the core business process

Decide what sort of ICT application or system to be used to expedite operation.

What did you say? I don't understand - well, Bill Gates said that something like this


"KM doesn't even START with a software or application!"

As you all have already known that the financial experts (or so called) have commenced their efforts to charter the implications of this year's credit crisis (esp. in the US) as a result of financial market turbulence. Not too long ago, everyone is aiming at the renaissance of China but with the current condition they are facing, it may potentially be a little while before their internal problems can be stabilized if not solved fully.

So, what can our world governments do? I humbly think that the financial market should be slowly integrated to become a global network or hub. Except for US, I've seen efforts via conferences and seminars towards implementing such plans. I'm also shocked to know the rate of countries retreating from Euro these days.

US on the other hand; if not properly controlled; may affect even to the security matters - just wait if New York started to feel the pinch and everything will start to lead to one problem to another. (esp. security matters) I do not know if US need to cut down on foreign assistance at the moment - but if this is the case, then the fiscal pinch may affect the amount of such aid. If I may say, I hope that New York can start efforts of working together with other financial hubs to become a network of global capitals. The only setback is the global political stability as whenever there are plans of more effective and beneficial integration, the political element has to be part and parcel of financial market. Of course, I don't need to tell how much US can save by less interfering in other countries internal affairs as what have been done in Africa, Iraq, Afghanistan and Pakistan. US Bush Administration has tried their best to save their economy but it is too sluggish - I hope they can crush their ego and restrategize - try to create a better relationships with other countries - they have tried too many models and these models just don't work...

We can no longer depend on IMF, World Bank (now almost irrelevant) and even the UN (they themselves are now in hot soup despite funded the US) but we have to do something NOW to create a healthier market - e.g. making more rooms for reserves. We know that UN's stand on Darfur, Georgia & Pakistan - total silence for unknown reason.

When I talk about integration or interdepence, I'm not really pointing towards globalization as it is still a concept of uncertainty that may become a friend or a foe. That is too much for a small guy like me to anticipate. Just referring to the good ol' concept working together as a team. This 'teamwork' may lead to good global financial governance will create better monetary policies, securities regulations and even signifcant changes can be made to auditing and accounting standards.

Where would be the ideal starting point? The answer is the first tier - Banking and Financial Institutions. I would like to open this suggestion to Asia (or SEA) as Asia is a very unique continent that has always found a way towards survival. (perhaps some democratization of financial policies should be in place) Most important is TRUST and coordinated efforts one another - as every bankers and financiers have all the knowledge. (Don't wait for someone else to start first) There should be no more too much dependency on certain elite groups or industries that are 'controlling the financial world' and we have seen the impact when these 'big mega industries' started to fall. (NASTY!)

Again, my 2 sens worth!

WASHINGTON POST


No Depression
This Time, Uncle Sam Has Got Our Back

By Laurence J. Kotlikoff and Perry MehrlingThursday, October 9, 2008; Page A21

Global markets have not been reassured by the coordinated interest rate cuts of several central banks or by recent congressional action, but they should be. Our bet is that financial markets will return to normal in short order and that the U.S. economy will squeak by with a moderate recession. Recapitalizing the banks and working out mortgages will take time, but the financial system will not collapse -- the government won't let it.

The markets, of course, seem to be factoring in some probability of collapse. Why is this wrong?
For starters, the biggest subprime mortgage gamblers have already failed, been nationalized or been married off, shotgun-style, to banks run by grown-ups. Yes, lots of small shoes may still drop, but the Paulson "buy-up" bill, and, ultimately, the Fed's ability to print money, provides the Treasury and Federal Reserve all the tools they need. The media don't seem to have noticed, but Section 113 of the bill authorizes government capital infusions into the banking system as necessary -- something the British government is now doing and the Swedish government successfully did in the recent past. That means any bank with a viable business will not be allowed to fail simply because it is temporarily undercapitalized.

Second, Uncle Sam (a.k.a. Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke) is doing precisely what's needed to avoid the mistakes of the 1930s. With credit markets drying up, he's turning on the faucet by recycling our panic dollars back into the financial market.

The government is taking in our money (in exchange for Treasury bills) and using it to make mortgages and buy up the assets we're too scared to hold. It's doing this via the Treasury, the Fed, the Federal Deposit Insurance Corp., the Federal Housing Administration, the Federal Home Loan Bank, Fannie Mae, Freddie Mac and other appendages. It's starting to lend directly to large and small businesses whose usual sources of credit have become unavailable.

In short, Uncle Sam is becoming our new bank. He has also become our new insurance company with his effective purchase of the world's largest insurer -- AIG.

In the 1930s, nobody in the private sector could borrow, raise equity or sell insurance because everyone lost trust in everyone else. Uncle Sam stood on the sidelines and marveled at the chaos. But today Uncle Sam is saying, "Listen, if you households and firms are too scared to invest in each other or sell each other insurance, give us your money, and we'll do it for you. We'll pay you a sure return on the Treasuries and, if our investments and insurance sales do well, you'll benefit by paying lower taxes."

This may sound like socialism or state capitalism, but it's simply rearranging the financial furniture. As Americans have freaked out, Uncle Sam has stepped up. He'll continue doing so until we realize the sky is not falling. The $700 billion rescue authorizes the federal government to keep doing what it has been doing for the past year to the tune of $400 billion -- buying distressed assets at bargain-basement prices and selling insurance at high premiums. If all works out, Uncle Sam will make a killing. This would be great, given our government's real problem -- paying the long-term Social Security and medical costs of retiring baby boomers.

Point three is clear: This financial chaos has ruined our sleep but left our physical and human capital unscathed. We have the same productive capacity today we had a year ago. And if our capital hasn't changed, we've suffered no overall capital loss.

This means that our accounting, which has focused on financial losses, is missing lots of offsetting financial gains. The offsetting gains are accruing to current or prospective purchasers of the assets whose market values have dropped. Asset buyers, whether they are young people buying their first homes, middle-aged workers contributing to their 401(k)s or billionaires such as Warren Buffett buying financial firms, can now acquire homes and stocks (claims to the same capital inside the companies) at a roughly one-third discount from a year ago. That's great for them, and lousy for the rest of us, but not a net economic tragedy.

The economic tragedy comes if we get hypnotized by the bad news, ignore the good news, fight about things we're already doing (e.g., having Uncle Sam buy and insure troubled assets) and pull our economic heads inside our shells. We Americans have lots of moxie. What we need is a strong pep talk and absolute assurance that credit will continue to flow, that insurance policies will continue to be honored, and that Uncle Sam is willing and able to invest directly in the private economy on our behalf.

So after scaring us half to death, this would be a good time for our other uncles -- Hank and Ben -- to make clear that we're heading for a safe landing and that there is no way in hell they will let this economy go down the tubes.

Laurence J. Kotlikoff, a professor of economics at Boston University, is co-author of "Spend 'Til the End." Perry Mehrling is a professor of economics at Columbia University's Barnard College and author of "Fischer Black and the Revolutionary Idea of Finance."

Hi everyone!!

It's been a while...dropping by to share a very good article which has caused me some delay in submitting a very important document to the client.

Luckily my client called me up to remind me...

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Speeches, Testimony, Papers
Global Economic Prospects 2008/2009: Hoping for a Global Slowdown and a US Recession
by Michael Mussa, Peterson Institute

Paper presented at the thirteenth semiannual meeting on Global Economic Prospects
April 3, 2008

© Peterson institute for International Economics. All rights reserved.

Overview

After four years of average annual global real GDP growth of better than 4 1/2 percent, recent data indicate that the pace of advance is slowing in the major industrial countries, with the US economy on the verge of, and perhaps already in, outright recession. So far, the evidence points to less of a slowdown in other industrial countries, while most emerging-market economies appear likely to maintain quite strong, albeit somewhat slower, growth.

Meanwhile, world consumer price inflation (on a 12-month basis) is up from barely 2 percent seven years ago to nearly 5 percent as of February 2008. Among both industrial (except for Japan) and major emerging-market countries, inflation is now running at, or in most cases somewhat above, rates consistent with policy objectives. Driven by persistently rising global demand, commodity prices continue to surge upward across the board, especially measured in US dollars but also in terms of the rapidly appreciating euro.

In this situation, the world economy really needs what is now forecast for 2008/2009: a significant slowing of economic growth, down to 3.8 percent (year over year) in 2008 from 4.7 percent in 2007.1 This slowdown will be led by a decline of demand growth in the US economy, which is both pronounced and extends over a considerable period. Indeed, in view of the exceptionally aggressive easing of macroeconomic policies already in place in the United States and the likelihood of monetary policy remaining highly accommodative so long as US financial markets remain under stress, it is now desirable that real GDP growth for 2008 fall to a forecasted rate of barely more than 1 percent (year over year)—an outcome consistent with a very mild and brief recession. Reflecting some risk of a somewhat deeper and more prolonged recession in the United States, the growth forecast for 2009 (year over year) is set at 2 percent.

For the rest of the world, a mild US recession in 2008 will have a modest negative effect on real GDP growth, with more significant impacts in Mexico and Canada. In countries where the slowdown threatens to become excessive and inflation is under control, some easing of monetary and perhaps fiscal policy is both likely and appropriate. More generally, however, it is too soon to call for a general and significant easing of macroeconomic policies. A general slowdown in global economic growth is needed to cool the clearly apparent upsurge in worldwide inflation.

Some countries, including Australia, China, and Sweden, have recently tightened monetary policies in efforts to forestall inflation. Other countries, including Canada and the United Kingdom, have eased monetary policies modestly in response to weakening economic growth. Quite appropriately, however, no country has so far followed the lead of the Federal Reserve in aggressive monetary easing.

As the custodian of the world's second most important currency, the policy of the European Central Bank (ECB) is particularly noteworthy. Inflation in the euro area is running more than a percentage point above the ECB's announced objective. The euro area economy has recently been growing significantly more rapidly than its potential rate of about 1 1/2 percent. The unemployment rate has fallen half a percentage point below the minimum reached in the last expansion. Key monetary aggregates are surging at rates well above their desired target ranges. In this situation, one would normally have expected the ECB to have raised its key policy interest rate a further 100 basis points since last summer.

Instead, with financial turbulence spreading to some extent from the United States to euro area financial markets and institutions, with evidence that euro area economies are beginning to slow, and with a sharp appreciation of the euro against the dollar, which is likely to slow growth and impede inflation, the ECB has wisely held back from further interest rate increases. With the euro area economy now expected to expand by about 1 1/2 percent this year (in line with potential), the timing and direction of future adjustments in ECB interest rates remain—appropriately—dependent upon the evolving balance of risks for inflation and economic growth.

For Japan, the strengthening of the yen against the dollar in recent months and weakening of exports to the United States, together with likely weakness in domestic demand growth, suggest a further write-down in the forecast for real GDP growth for 2008 to 1.2 percent (from 1¾ percent forecast last October). This reflects the assumption that the surprising upsurge of GDP growth in the final quarter of 2007 will be partly offset in the first half of this year.

For the industrial countries as a group, real GDP growth this year is now forecast to be 1.5 percent, and growth for 2009 is projected to be moderately stronger at about 1.9 percent.

In emerging-market economies, circumstances vary and so do appropriate policies, but the general prospect is for continued quite strong economic growth, despite the slowdown in the industrial countries.

Is this "decoupling?" Not really. Mexico, Caribbean and Central American countries, and Asian economies that are particularly dependent on exports to the United States are already feeling and will continue to feel the effects of the US economic slowdown. More broadly, however, strong growth of domestic demand in many emerging-market economies will sustain reasonably strong GDP growth, and rising demand for raw materials by key emerging-market economies, most importantly China, will help keep commodity prices strong and aid growth in other emerging-market economies.

Overall, I forecast that growth for developing and emerging-market economies as a group this year will be about 6 1/2 percent, down from almost a 7 1/2 percent advance in 2007. For 2009, I now project slightly slower growth. The slowdown will be more severe, however, if growth in the industrial countries, especially the United States, turns out to be meaningfully below the present forecast. Exports from emerging-market countries would then be hit in volume terms, and prices of commodity exports could take a serious tumble. Some developing countries, especially among the primary commodity exporters, could face serious economic challenges and potential crises.

On this occasion, Arvind Subramanian is available to share his expertise on emerging-market economies, particularly in Asia and especially India. Accordingly, I will limit my remarks on these economies to selected observations on some key emerging-market countries. Then, in view of the departure from the Institute of my colleague Martin Baily and the (at least) temporary absence of Douglas Holtz-Eakin, I will turn to discuss growth prospects in the industrial countries, especially the United States. This should provide background for Morris Goldstein's more in-depth observations on the present financial crisis and proposals for reform.

Sustained Growth in Emerging Markets

China's economy continues to surge forward, so much so that the authorities are tightening policies to cool down inflation. Growth will likely slow from 11 1/2 percent last year to about 10 percent this year and next. On the policy front, the key action that should be taken—but that the Chinese authorities have so far refused—is a significant step appreciation of the renminbi against the dollar and in real effective terms, combined with policies to stimulate domestic demand.

In the rest of emerging Asia, growth will likely moderate somewhat in 2008 and 2009 but stay above 6 percent, with India continuing to grow at nearly 8 percent.

In Latin America, Mexico will suffer spillover effects from the slowing US economy, and growth this year is likely to fall to about 2 1/2 percent before recovering modestly in 2009. In contrast, Brazil should be able to sustain growth of nearly 5 percent, despite the strong appreciation of the real against the dollar. Growth in Argentina and Venezuela is expected to slow from the high rates of recent years, bringing down the growth rate for all of Latin America to about 4 1/2 percent this year and slightly less in 2009.

For Central and Eastern Europe, weak growth in Hungary and Turkey hurt regional performance in 2007 and partly offset strong results in Bulgaria, the Czech Republic, Poland, and Slovakia. For 2008 and 2009, regional growth will likely run about 4 percent, reflecting partly the impact of slower growth in Western Europe.

In the Commonwealth of Independent States, the dominant Russian economy should continue to grow at about 7 percent, and growth rates will likely remain somewhat higher (on average) in the smaller economies.

For the Middle East, high oil prices will help keep growth strong in the energy-exporting countries. The larger and more diversified economies of Egypt and Israel should also maintain growth rates in the 5 percent range.

High commodity prices will continue to benefit many African countries, and growth in the region appears likely to continue at least at a 5 percent rate.

Slowing in Other Industrial Countries

Among the industrial countries other than the United States, growth will slow significantly from the 2 3/4 percent advance of 2007 to barely more than 1 1/2 percent this year. However, aside from the United States, I see significant risk of recession this year only in Japan and possibly Italy. The impact of the yen's recent appreciation and weakening of exports to the United States, together with deteriorating sentiment among Japanese businesses and consumers, could push GDP into a couple of quarters of negative growth, even if year-over-year growth remains slightly positive. And the Japanese policy authorities have little room to provide offsetting stimulus.

In Canada, growth this year will likely fall a little below 2 percent, under the impact of slowing US growth and a strong Canadian dollar. However, solid income growth from strong export revenues should keep domestic demand relatively robust, and the Canadian authorities have considerable room to ease policy should that appear needed to forestall very weak growth or recession.

In the United Kingdom, growth this year is also likely to slow to slightly less than 2 percent. But this is not entirely unwelcome in view of the need to curb inflationary pressures, and the Bank of England has plenty of room to ease further should that appear warranted. The Reserve Bank of Australia has continued to tighten in recent months and would surely welcome the forecasted slowing of growth to 3 percent this year.

In the euro area, as previously noted, the projected slowing of growth this year to 1.6 percent from 2.6 percent last year involves nothing more than slowing to the potential growth rate. The slowdown will affect all countries in the area. The Italian economy looks likely to be extremely sluggish and is at some risk of falling into recession. Growth should remain stronger in Germany, sustained by good export performance in the face of weaker consumer demand. France will lag slightly behind Germany, while Spain will slow considerably due to a sharp downturn in home building. The slowdown will probably be reflected in a small uptick in unemployment and will be unpopular with most politicians. However, with inflation running well above the ECB's tolerance rate of 2 percent, the central bank is likely to see the slowing of growth more as a solution than as a problem.

A Mild US Recession

Despite signs of increasing financial strains, the US economy achieved almost 5 percent annualized growth in the third quarter of last year. Economic data that became available through Christmas indicated that the economy was still expanding through November. The data since late December, however, suggest that economic activity has been no better than flat and probably modestly declining since very late last year. The economic data do not indicate an economy that is crashing into steep recession.

The three most recent monthly employment reports have shown small declines in private-sector jobs. Weekly initial unemployment claims have risen from around 300,000 to slightly over 350,000. Residential investment continues to decline. The boom in nonresidential construction appears to have peaked. Data on durable goods orders and shipments suggest weak or even declining business equipment investment. As should be expected in the face of falling home prices and household wealth, sharp increases in energy and food prices, and stagnating employment, real consumer spending has not increased since November—but it has not declined.

Net exports are probably continuing to improve, but this will not be enough to offset weakness in the other components of final demand. Annualized real GDP growth in the first quarter will likely be modestly negative—probably between minus one-half and minus one percent in the first quarter. (And, if there is a modestly positive result, it will probably reflect an upsurge in inventory investment, which is not a positive sign for future growth.)

The second quarter may see moderation in the pace of decline of residential investment, but the other elements of domestic demand are likely to remain weak. Another quarter of modestly negative real GDP growth now seems to be the most likely outcome. Whether this will be enough to persuade the National Bureau of Economic Research (NBER) to proclaim an official recession is not clear, but I would now put the likelihood of such a recession at over 50 percent.

By June, the tax cuts from the recently passed fiscal package will be flowing into consumers pockets, bumping up consumer spending mainly in the third quarter. Some, not unreasonable, forecasts suggest that the stimulus could induce as much as a 5 percent annualized gain of real consumer spending in the third quarter, implying a considerable temporary boost to GDP growth. My view is more restrained, partly because I expect that businesses will absorb some of any surge in consumption spending (particularly for durables) into reductions in inventories.

On the other hand, businesses have kept inventories quite lean for the past three years, and there is no indication of a general inventory overhang (aside from the stockpile of unsold homes, which is not counted in business inventories). Sharp declines of inventory investment into negative territory have been a feature of all ten postwar recessions. It is a positive sign that the magnitude of any inventory correction in the present episode appears likely to be limited.

In sum, the prospect is that with the benefit of the fiscal stimulus, the US economy will bounce back to moderately positive growth this summer. By then the massive contraction of residential investment, which began two years ago, should be complete—with new home building running just below one million units, less than half of its recent peak level. Growth of consumer spending is likely to be weak after the effects of the stimulus are spent, but inventory investment should bounce back, and net exports may be expected to continue to make positive contributions to GDP growth. During the second half of 2008, it is reasonable to expect growth to rebound to 2 to 3 percent.

The suggested pattern of modestly falling GDP in the first half and moderate rebound in the second half implies that real GDP will show a very meager advance of about one-half percent on a fourth-quarter-to-fourth-quarter basis. Year-over-year real GDP growth would be barely more than 1 percent. In comparison, in the 2001 recession—the mildest of the postwar era—fourth-quarter-to-fourth-quarter growth was 0.4 percent and year-over-year growth was 0.8 percent.

The 2001 recession was followed by an initially weak recovery, with real GDP growing at only a 1.7 percent rate during the six quarters after the official end of recession, and with the unemployment rate continuing to rise to a peak of 6.3 percent in May 2003. On this occasion, I expect that the economy will remain quite sluggish through 2009, with growth proceeding at about a 2 percent annual rate. Weak growth of consumer spending in the face of significant losses of household net worth associated with lower real home values will be the key reason for this sluggishness.

Partly offsetting weak consumer spending growth will be continued improvement in US net exports, reflecting both slow import growth and continued rapid export growth. With the usual lag, the substantial depreciation of the dollar over the past year will contribute to the improvement in US net exports in 2009 and beyond.

We see here what I earlier called "reverse coupling." From 1995 through 2004, relatively strong growth of domestic demand in the United States and the effects of a strong dollar (with lags extending this effect) led to persistent deterioration in US real net exports. Thus, the United States was exporting demand to the rest of the world at a time when domestic demand growth in the rest of the world was relatively sluggish.

This process has been operating in reverse since the summer of 2006. Slower domestic demand growth in the United States, combined with stronger demand growth abroad and the effects of a significantly weaker dollar, have begun to significantly improve US real net exports. Thus, during the past year and a half, the rest of the world economy has been helping to pull the US economy along. This process may continue for several years as consumer spending growth in the United States remains restrained by the effects of lower household wealth, making room for expanding the supply of US net exports without contributing to inflationary pressures in the United States. For this process to continue relatively smoothly, however, the rest of the world needs to sustain reasonably robust demand growth and the United States needs to avoid too sharp a decline in domestic demand. The adjustment of the foreign exchange value of the dollar, which is essential for this process, is now largely complete, except for the needed appreciations of some Asian currencies, most notably the Chinese renminbi.

Turmoil in Global Financial Markets

A key feature and source of uncertainty in the present economic situation is the continuing turmoil in financial markets, especially in the United States but with spillovers to Europe and to a limited extent (so far) to Japan and emerging markets. Global equity markets have sold off amidst the turmoil, but markets for credit instruments and financial institutions dealing in such instruments have been most affected.

Three issues concerning this financial-market turmoil deserve special attention:

(1) What has caused this financial turmoil, notwithstanding strenuous efforts by the Federal Reserve and other central banks to contain it?

(2) What risks does it pose to the global economy?

(3) Have the policy responses been adequate and appropriate?

Regarding the causes of the turmoil, it is noteworthy that it has been most severe in US financial markets and institutions. Europe and, to a lesser extent, Canada and Japan have also been affected. In these other countries, a few institutions (such as the mortgage lender Northern Rock in the United Kingdom) have gotten into trouble on their own, related to their domestic activities. But most of the problems faced by non-US institutions have arisen because of their involvement with financial instruments originating in the United States.

In the United States, the initial underlying difficulties arose from subprime mortgages and financial instruments involving such mortgages. However, the crisis is much broader and deeper and has gone on longer than can plausibly be explained by this underlying cause. Across quite a broad spectrum, credit markets have become illiquid and dysfunctional. Interest rate spreads relative to US Treasury obligations have shot up and remained high and volatile even for higher-quality credits. Markets for important classes of bundled instruments have frozen up, and values for some of these instruments—to the extent that they can be determined—have plummeted. All this turmoil, well beyond what can plausibly be explained by developments in the real economy, indicates that financial markets and institutions themselves are mainly responsible for the crisis.

The extent of this crisis in credit markets is even more remarkable in view of the exceedingly aggressive actions taken by the Federal Reserve and the important but less aggressive actions of other leading central banks. Contrary to the nonsense spoken by many financial-market commentators, the Federal Reserve has not been "behind the curve" in its policy response. In fact, the easing of US monetary policy in the present possible recession has far outstripped the pace of easing in past actual recessions. On top of this, the Federal Reserve has recently taken truly extraordinary actions to extend specific liquidity support to a wide range of US financial institutions.

The official explanation for these extraordinary actions is not that they are motivated primarily by the desire to protect financial institutions from losses but rather to head off the risk of major damage to the general economy spreading from difficulties in the financial sector. So far, however, there is little indication that the general economy is suffering much damage from the credit market turmoil—beyond some deepening of the downturn in US residential investment. In particular, the present slowdown in the US economy and around the world is not much more than what we would normally have expected in view of falling home values, higher food and energy prices, and other developments aside from the turmoil in credit markets.

Does this imply that the Federal Reserve, in its efforts to protect the financial sector, has overreacted to the credit market turmoil? Has it eased too aggressively, unduly raising the risk of inflation down the road? Has its rescue of the financial sector by cutting massively the cost of funds and the provision of specific liquidity support generated far too much moral hazard relative to the value of the protective effect of these actions against real hazards faced by the general economy?

At this point, the answers to these questions are not entirely clear, but two conclusions can be reached with high confidence. First, given the massive easing already undertaken by the Federal Reserve and the likelihood of some modest further easing, the US economy now needs to undergo at least a near recession if the Federal Reserve's easing is not to be excessive. Second, if the Federal Reserve's highly aggressive actions have really been warranted to protect the economy from substantial harm, then deep reforms of the financial system, including the Federal Reserve's policies and practices, are clearly needed to reduce the likelihood of such problems in the future. The Federal Reserve cannot pose only as the hero riding to the rescue of the economy and the financial system. Its role as one of the villains whose earlier actions and inactions contributed to the present crisis needs to be fully and carefully assessed.


Table 1 Real GDP growth projections as of April 3, 2008 (percent change, year over year)




Note

1. The figures for global GDP growth are aggregated from the growth rates for individual countries using purchasing power parity (PPP)–based measures of exchange rates employed by the International Monetary Fund (IMF) in its World Economic Outlook (WEO). Based on a major study supported by the World Bank, estimates of PPP exchange rates have recently been substantially revised, with the general result that the weights in world GDP of the industrial countries have been somewhat increased while those of emerging-market economies have been correspondingly reduced. Because emerging-market economies, most notably China and India, have been growing far more rapidly than most industrial countries in recent years, the effect of the revision in PPP exchange rates is to lower the figure for global growth (without changing growth rates for individual countries) by about 1/2 percentage point. Thus the present estimate for global growth of 4 3/4 percent in 2007 under the new PPP-based exchange rates corresponds to an estimate of 5 1/4 percent growth under the old weights. The weights used in table 1 are estimates of the weights that the IMF will use for the forecast to be reported in the current WEO.
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RESPONSE FROM MELBOURNIAN AND COUNTER-RESPONSE FROM NIK ZAFRI - IN GLOBAL MALAYSIAN FORUM

Melbournian : A very lengthy analysis that echos familiar cliche from "soft-landers". My only comment is that there are two important factors that seems to be absent from his presentation: ie the component of human emotion and the lack of accountability in the derivative instruments that are prevalent in recent years. The health of credit market depends un-surprisingly on market "credibility". Quite akin to the railroad stock bubble and the (in)famous tulip futures fiascos in the past , the total sum of global derivatives todays seems to have exceeded the true intrinsic values of the actual goods and services that these instruments are supposed to underpin. Laws of conservation and Newton's principle of inertia are no longer relevant. No longer can one confidently say for sure that one man's gains equal in exactitude to another's losses. Containment ? Lets hope and pray.

Nik Zafri :

Hi Melbournian, I must say that I'm impressed!

This research seem to miss out "CCI" (Consumer Confidence Index) which I think suitably describes what you meant by 'human emotion' in the context of economics. (it's obvious isn't it....the article is touching on 'purchasing power', 'manpower', business surroundings - which are all linked to the CCI)

Surprisingly I have also discovered that the Global CCI have always been missing (in fact seldom being measured) But; in US; it will suddenly 'appear' during proposal to hike interest rates by the Feds - hence one of the main indicators to the performance of the stock market worldwide.

I can understand why the CCI is sometimes there and sometimes not there...it's because of the big variance between one country to another. CCI is suppose to be the consumption indicator for GDP.

Lack of accountability on derivative instruments

What you have said - coincidentally reminding me of the core of Management - it is said that :

"Responsibility is a derivative of authority and accountability is a derivative of responsibility"

It's a paradox - I do not know if there is any connection.

Anyway, in this case, the derivative instrument (to the accounting standards esp. balance sheet) becomes a concern when it involve hedging and embedded derivatives (contract) - to determine of whether they (derivatives) are liabilities or asset. Otherwise positioning of finance and determining the derivatives value cannot be accurately achieved.

I'm not a qualified accountant but I do know the affects of hedging either the normal fair value, cashflow or currency. Now? As you said and I would to agree to it that most accounting (and auditing) bodies (even in Malaysia) are 'shouting' demanding accountability but again, it is easier said than done unless further education to include hedging activities and the volatility behind them in the context of derivatives are developed further.

Yes, breaking every rule in the book is now trendy!! It is also the reason why I am really interested in the concept of Knowledge-Based Economy and Knowledge Management but of course these two terms are moulded according to my style of intepretation - in short my experience. At times, I never trust figures, data and statistics but I use my instincts to make decisions.

Finally quoting you : "Let's Pray and Hope"

The Star Global Malaysians Forum Posted: 06 August 2006 at 7:27pm

Nik Zafri's Comments

Here's an article from Greenpeace :

Nuclear power: No solution to climate change

“Nuclear power is expensive, slow and dangerous and it won't stop climate change. If the answer is nuclear power, it must have been a pretty stupid question.” Ian Lowe President, Australia Conservation Foundation.

The new battlecry of the nuclear industry is that nuclear energy is the answer to global climate change. Nuclear energy is toxic and dangerous. Far from being rehabilitated, the nuclear option is a convenient distraction from the problem of climate change and stalls real action to combat it.

Nuclear power lobbyists are correct that climate change demands an urgent and quick response. But replacing polluting coal and other fossil fuel-based power with another environmental disaster -- in the form of nuclear power -- is NOT the answer we need. Our best long-term solution for an emission free and greenhouse-friendly future are the truly clean and green renewable energy sources – particularly wind and solar - combined with technologies that vastly improve energy efficiency.

In Asia...

Asia is projected to have the largest growth in installed nuclear generating capacity from 2002-2025, accounting for 96% of the total projected increase.

Cost: Nuclear power is more expensive. Not only is nuclear power more expensive than fossil fuel generation and clean, renewable wind power, it also leaves a legacy of unsafe yet highly expensive technologies. Costs associated with safety and security, insurance and liability in case of accident or attack, waste management, construction and decommissioning are rising substantially for nuclear power, while the cost of wind and solar power is falling. Nuclear power plants have only presented a veneer of economic viability in the past due to heavy government subsidies. As energy markets have liberalized around the world, investors have turned their backs on nuclear energy. The number of reactors in western Europe and the United States peaked 15 years ago and has been declining since. By contrast, the amount of wind power and solar energy is rising at rates of 20 to 30 per cent a year.

The hazards associated with nuclear power include the risk of potentially catastrophic accidents like the 1986 Chernobyl nuclear reactor disaster, routine releases of radioactive gases and liquids from nuclear plants, the problem of nuclear waste and the risks of terrorism and sabotage. The International Energy Outlook 2005's projection that Asia will have the largest growth in nuclear generation in the next two decades exposes the region, which consists mostly of developing countries to these hazards, more than any other region. Asia will soon be dumping ground of nuclear technology if we do not reject this trend. and work in favor of renewable energy and improved efficiency.

Waste: Nuclear waste disposal is still an unsolved problem. The most dangerous form of pollution ever created, nuclear waste remains radioactive for hundreds of thousands of years. Uranium mines typically generate volumes of long-lived, low level waste which is kept on site. Reactors release radioactive emissions to air and water. Reprocessing plants generate a high-level radioactive waste stream and emissions to air and water. All these pose risks to the health of the public. Monitoring and maintaining waste deposits over a period spanning 20 times the length of known civilization is an unacceptable burden we are placing on all future generations – with no guarantees of long term safety.

Nuclear proliferation: Nuclear technology, such as uranium enrichment is also used in nuclear weapons production, and therefore a proliferation risk. There are now more than 40 countries with the capacity to build nuclear weapons, and international efforts to stop the proliferation of nuclear weapons technology are failing. Nuclear technology will always carry the risk that it will be used to construct weapons of mass destruction.

Greenhouse polluters: Claims that nuclear power is “emissions free” are false. Substantial greenhouse gas emissions are generated across the nuclear fuel cycle. Fossil-fuel generated electricity is more greenhouse intensive than nuclear power, but this comparison only holds true if high-grade uranium ores are available. Even with such high-grade ores, there is a massive increase in greenhouse pollution from mining, processing and reactor construction before any electricity is generated. The known resources of high-grade uranium ores only amount to a few decades' use at the present rate. Most of the earth’s uranium is found in very poor grade ores, and recovery of uranium from these ores is likely to be considerably more greenhouse intensive. Nuclear power emits more greenhouse gases per unit energy than most renewable energy sources, and that comparative deficit will widen as uranium ore grades decline.

Safe, clean alternatives

To avoid dangerous further changes to our climate, we need to act now. Asia in particular should make a commitment to the sensible alternatives that produce sustainable cost-effective reductions in greenhouse pollution: wind power, solar water-heating, energy efficiency, gas and energy from organic matter. Renewable energy and energy efficiency can deliver the power we need – without the environmental and social problems.

Renewable energy already supplies 19% of world electricity, compared to nuclear’s 16%. The share of renewables is increasing, while nuclear’s share is decreasing. Renewable energy sources such as wind power and solar power are growing by 20-30% every year. In 2003, the cumulative installed capacity of solar photovoltaic (PV) systems around the world passed the landmark figure of 2,400 Megawatts of solar photovoltaic power. Global shipments of PV cells and modules have been growing an average annual rate of more than 35% for of the past few years, providing employment for 10,000 people and generating business worth more than 3 billion euros annually. Wind power, on the other hand, is the world’s fastest growing energy source with installed capacity growing at an average annual rate over the last 5 years of 15.8%

Renewable energies have truly limitless sources, can be more easily deployed in remote developing regions, present absolutely no risk to global security and are environmentally-friendly.

Because there is only a finite amount of investment available for new energy, any investment in nuclear power is effectively money denied to renewables and energy efficiency. Nuclear power, with fifty years of failure as its track record and still no solutions to its fundamental problems, remains a shockingly poor investment choice. The wise decision then, is to say no to nuclear, yes to renewables and energy efficiency.

Nik : So, with this, I say 'bye-bye' to nukes!
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Comments by ahvincent

Nuclear power plants do not produce the same amount of green house gas pollutants but they produce another kind of pollutant, Nuclear Waste.!!! And nuclear waste will kill you a lot quicker and have a half life of hundreds of years with a potential to kill even more is it gets out of control !!!

Some of our Oz politicians have got s*&t for brains !!! They have completely missed the point, surely it would make more sense in trying to develop wind powered turbine farms or look at harness more hydro energy.

All along the coast around the Great Australian Blight the wind is very strong 24/7/365. It lends itself to wind farms and with modern light weight turbines which are very efficient I think they should investigate that option.
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Response by gleearch

Ahvincent,

I agree. Nuclear energy isn't a cure all. Nothing sustainable about it at all. You are right. A pollutant or waste is still waste. In this case highly dangerous. There's still not good way to get rid of nuclear waste. I don't think dumping them in concrete holding facilities is really doing any good. Or storing them under sea.

There's plenty of sun and wind in Australia as you pointed out. Some of the new skyscrapers going up in new York have built in wind turbines to generate electricity.

They keep on developing new wind turbines that can reduce accidents with birds. No pollution. Plenty of cheap renewable energy. Same with solar panels.
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Posted: 09 August 2006 at 8:15am

Response by ahvincent

I will recount a first hand story about an early experimental plant using solar energy generated electricity system. I used to work with a major USA based power generation company many years ago. They installed one of their early prototypes on an isolated village in Papua New Guinea. These villages did not have electricity and no road access. All diesel fuel will have to be flown in thus making it prohibitively expensive. So solar power was an ideal solution to bring the marvels of modern science to these primitive jungle tribes.

We intalled a solar powered generation plant enough to provide the bare essentials to the village. This system had a diesel motor as a backup to charge the batteries in case of a cloudy day or an emergency.

Everything seem to be working fine when our technicians were on site but once they left we keep getting calls that our system was not functioning properly. They have to use the diesel generator all the time and the authorities had to keep flying in fuel at a great expense.

So we send our technicians in and they found out that the natives who have not seen an electric light in their lives were keeping all the lights on all night and sitting around the lights watching it. Little wonder that the supply ran flat before morning.

Anyway the project was deemed a failure for a variety of reasons and we did not sell more than a handful of our remote solar electricity plants. That was many many years ago, I am sure the price of solar cells have got more efficient and less costly now and maybe this type of projects may become more cost efficient now. I don't know.

An other example (of what seems to be a good idea at the time) of another experimental project gone wrong is the big black (W) towers in Pittsburg. If you go to Pittsburg you will see a great big (I cannot tell you the name) electric sign next to where the Ohio & Mo...(I cannot spell the name) rivers. I don't know if the sign is still there now.

This sign is lit by thousands of light bulbs. The idea was to collect the heat given off by the bulbs in the sign and the building to drive the air-conditioning in the building. Someone's brilliant idea at the time. The end result - all the lights in the sign and the building had to be left on 24/7 otherwise no air conditioning.

Disastrous experiment costing millions. At the end they just had to connect the air condition back to the usually supply source.

On one particular conference I attended someone had another brilliant idea for storing electricity. We all known batteries are very ineffcient at storing large quantities of electricity, so his idea was to use off peak power to pump water to a pool at a higher level and during peak demand periods let the water drain back down driving turbines in the process. Electricity is thus stored in the form of kinetic energy.

Other bright ideas include using off peak power to wind up a series of gaint coil springs. This did not arouse the same level of interest as the first idea,
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Posted: 09 August 2006 at 11:27am

Response by gleearch

Ahvincent,

Interesting stories. That's what happens when not a lot of thought is given to the idea. Using light bulbs to power air conditioning? Duh! as homer simpson would say. Using electricity to power up the lights and then using the heat from it to power the air conditioning.

I mean, what were they thinking.

Ok I'll offer these instead.

Ice skating rinks generate heat. That is the cooling machinery used to create the ice on the rinks generate heat. (I'm simplifying things overly much) It is common practise now to use that waste heat for other uses. Melting snow around buildings so people don't slip and fall etc.

It's about using waste heat and having a secondary system in place. Not creating a whole system to generate waste heat just to power something else.
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Posted: 30 August 2006 at 10:11pm

Response by stingray2000

Nuclear Power Won't Fix It

Nuclear power is not the answer to tackling climate change or security of supply, according to the Sustainable Development Commission in Scotland.

The SDC nuclear report draws together the most comprehensive evidence base available to find that there is no justification for bringing forward a new nuclear power programme at present – supporting current Scottish policy.

Scottish Commissioner, Hugh Raven, says:

“Our report proves how right Scotland is to fight for its ‘no nuclear’ policy. We’ve thoroughly investigated nuclear power over the last year, but have found that any potential benefits are outweighed by substantial disadvantages. With our amazing renewable resources – combined with some serious political willpower – Scotland could become a true world leader in clean, sustainable energy.”

“The SDC urges the Scottish Executive to stick to its position of not supporting the further development of nuclear power while waste management issues remain unresolved. Nuclear is not the answer for climate change or security of supply.”

In response to the UK Government’s Energy Review, the SDC report gives a balanced examination of the pros and cons of nuclear power, based on eight new research papers.

Its research recognizes that nuclear is a low carbon technology, with an impressive safety record in the UK. Nuclear could generate large quantities of electricity, contribute to stabilising CO2 emissions and add to the diversity of the UK’s energy supply.

However, the research establishes that even if the UK’s existing nuclear capacity were doubled, it would only give an 8% cut on emissions by 2035 .This must be set against the risks.

The report identifies five major disadvantages to nuclear power:

1. Long-term waste – no long term solutions are yet available, let alone acceptable to the general public; it is impossible to guarantee safety over the long-term disposal of waste.

2. Cost – the economics of nuclear new-build are highly uncertain. There is little, if any, justification for public subsidy, but if estimated costs escalate, there’s a clear risk that the taxpayer will be have to pick up the tab.

3. Inflexibility – nuclear would lock the UK into a centralised distribution system for the next 50 years, at exactly the time when opportunities for microgeneration and local distribution network are stronger than ever.

4. Undermining energy efficiency – a new nuclear programme would give out the wrong signal to consumers and businesses, implying that a major technological fix is all that’s required, weakening the urgent action needed on energy efficiency.

5. International security – if the UK brings forward a new nuclear power programme, we cannot deny other countries the same technology*. With lower safety standards, they run higher risks of accidents, radiation exposure, proliferation and terrorist attacks.

On balance, the SDC finds that these problems outweigh the advantages of nuclear. However, the SDC does not rule out further research into new nuclear technologies and pursuing answers to the waste problem, as future technological developments may justify a re-examination of the issue.



Download the reports:

Full SDC position paper
» The role of nuclear power in a low carbon economy
A commentary by Jonathon Porritt
» Is nuclear the answer?

Or order your free hard copies

SDC Chair, Jonathon Porritt, says:
“It’s vital that we get to grips with the complexity of nuclear power. Far too often, the debate is highly polarised, with NGOs claiming to see no advantages to nuclear at all, and the pro-nuclear lobby claiming that it’s the only solution available to us.

“Instead of hurtling along to a pre-judged conclusion (which many fear the UK Government is intent on doing), we must look to the evidence. There’s little point in denying that nuclear power has benefits, but in our view, these are outweighed by serious disadvantages. The UK Government is going to have to stop looking for an easy fix to our climate change and energy crises – there simply isn’t one.”

Concluding with advice on a future energy strategy, the SDC report establishes that it is indeed possible to meet the UK’s energy needs without nuclear power. With a combination of a low-carbon innovation strategy and an aggressive expansion of energy efficiency and renewables, the UK would become a leader in low-carbon technologies. This would enhance economic competitiveness whilst meeting the UK’s future energy needs.

ENDS

[Notes to Eds:

- The SDC nuclear review, research papers and audio launch interview with Jonathon Porritt are available to download at www.sd-commission.org.uk.

- The SDC has spent a year gathering evidence and agreeing its position on nuclear power.

- The process for developing the SDC position on nuclear power has been rigorous and transparent. During the process, the SDC identified three divergent positions on nuclear power: position 1 - NO, position 2 – NOT NOW, position 3 - MAYBE.

SDC Commissioners voted as follows: eight Commissioners favoured position 1, five favoured position 2, and two favoured position 3.
As part of the current Energy Review, we expect the Government will go through a comparable decision-making process, and we advise them to be similarly transparent.

- The SDC nuclear review is based on eight new research papers
(see attached evidence base summary for key facts):
1. An introduction to nuclear power – science, technology and UK policy context,
by the Sustainable Development Commission
2. Reducing CO2 emissions: nuclear and the alternatives,
by the Sustainable Development Commission
3. Landscape, environment and community impacts of nuclear power,
by the Sustainable Development Commission
4. The economics of nuclear power
by the Science & Technology Policy Research (SPRU, University of Sussex) and NERA Economic Consulting
5. Waste and decommissioning
by the Sustainable Development Commission with contributions from Nirex and AMEC NNC
6. Safety and security
by the Sustainable Development Commission with contributions from Large & Associates and AMEC NNC
7. Public perceptions and community issues
by Professor Robin Grove-White, Dr Matthew Kearnes, Dr Phil Macnaghten and Professor Brian Wynne
8. Uranium resource availability
by Future Energy Solutions, an operating division of AEA Technology plc

- The Sustainable Development Commission is the government advisory body on all matters relating to sustainable development, reporting to the First Minister in Scotland and Prime Minister at UK level . Through advocacy, advice and appraisal, we help put sustainable development at the core of Executive policy.

SOURCE: Sustainable Development Commission UK