SCARCITY OF SUPPLY IN THE OIL AND GAS AND HOW ESG COULD HELP EASE THE PROBLEM - Nik Zafri

It is an acknowledged fact that there is a scarcity of supply in the oil and gas industry. This will definitely affect both global markets and energy strategies 

We are feeling the pinch whether we realize it or now. As supply dwindles or becomes unstable, oil and gas prices rise. This affects everything from transportation to manufacturing, as oil and gas are key to energy production and as raw materials for many industries. In 2022, the U.S. faced significant spikes in oil and gas prices, possibly due to Russian-Ukraine conflict. This led to higher gasoline prices, with some regions seeing prices over $5 per gallon. Rising energy costs also increased the price of goods and services, contributing to inflation and squeezing consumers' disposable income. 

Countries that heavily rely on oil imports may face national security risks due to dependence on unstable or hostile regions. This could lead to geopolitical tensions as nations compete for remaining supplies.

Germany has long been dependent on Russian natural gas, which made up a significant portion of its energy supply. When Russia cut gas supplies during the Ukraine war, Germany faced an energy security crisis. Nigeria, one of Africa’s largest oil producers, has an economy highly dependent on oil exports. In recent years, declining global oil prices have severely impacted its economy. For example, the 2014-2016 oil price crash caused a recession in Nigeria as government revenues and foreign exchange reserves plummeted.

Energy-intensive industries, such as transportation, manufacturing, and logistics, would face increased operational costs. Inflation could rise as the cost of goods and services increases.

Governments may be pushed to accelerate policies aimed at reducing reliance on fossil fuels, speeding up transitions to greener energy sources. Denmark has been a leader in climate change action, using the oil and gas supply issues as an opportunity to accelerate its renewable energy transition. In 2020, Denmark announced a plan to phase out all oil and gas exploration in the North Sea by 2050 and committed to cutting greenhouse gas emissions by 70% by 2030.

Countries whose economies are heavily reliant on oil exports, such as those in the Middle East and Africa, might face economic instability as revenues decline, especially if global demand shifts due to green energy policies.

Environmental, Social and Governance (ESG)

Pushing the Environmental, Social, and Governance (ESG) initiatives and Sustainable Development Goals (SDGs) is critically important in addressing the challenges posed by oil and gas scarcity, rising energy prices, energy security concerns, economic disruptions, and climate change. 

Renewables are abundant, sustainable, and have become increasingly cost-effective. Solar and wind, in particular, have seen significant technological advancements, making them scalable and more affordable. 

Nuclear power is a low-carbon energy source with a high energy output. It's a reliable alternative that can provide consistent baseload power.

Hydrogen can be used as a clean fuel, especially for industries where electrification is difficult (such as aviation, shipping, and heavy industry). When produced using renewable energy (green hydrogen), it becomes a low-emission alternative.

Biofuels are derived from organic materials and can serve as a direct substitute for conventional fuels in vehicles and other equipment, reducing dependence on oil.

Geothermal energy is another renewable source that provides consistent energy output and can complement other renewable sources like solar and wind.

• Environmental Impact Reduction (ESG: Environmental / SDG 7, 13)

One of the primary drivers of oil and gas scarcity is environmental degradation, fossil fuel dependence, and rising demand. ESG and SDG frameworks prioritize a transition to cleaner, renewable energy sources like solar, wind, and geothermal, reducing reliance on finite resources. For instance, SDG 7 (Affordable and Clean Energy) promotes increasing the share of renewable energy in the global energy mix, while SDG 13 (Climate Action) targets urgent actions to combat climate change. Enhancing Energy Security (ESG: Governance / SDG 7):

Countries dependent on oil and gas imports are vulnerable to geopolitical instability and supply shocks (e.g., the European energy crisis due to the Ukraine war). SDGs, particularly SDG 7, encourage the development of diversified, renewable energy sources that can enhance energy security.

Companies like #Tesla and countries like Denmark are leaders in this space, shifting toward renewable energy as a core part of their ESG commitments, reducing emissions, and ensuring long-term sustainability.

• Mitigating Economic Disruptions (ESG: Social and Governance / SDG 8, 9):

Economic disruptions due to rising oil prices can impact businesses, households, and governments, particularly in countries reliant on fossil fuel industries. ESG’s social focus on fair labour practices and economic inclusion aligns with SDG 8 (Decent Work and Economic Growth) and SDG 9 (Industry, Innovation, and Infrastructure), which encourage innovation and investments in sustainable infrastructure and technology. This promotes resilient economic systems that are less vulnerable to fossil fuel price fluctuations.

Countries and corporations that diversify their energy sources and invest in green technology can build more stable economies. For instance, Iceland, which relies heavily on geothermal energy, enjoys energy security and price stability, even during global oil shocks, making its economy more resilient. Furthermore, oil-dependent economies like Nigeria need to invest in renewable energy and technology to reduce vulnerabilities to oil price volatility and ensure more sustainable economic growth.

• Accelerating Climate Action (ESG: Environmental / SDG 13):

Climate change is driven by greenhouse gas emissions, most of which come from fossil fuels. SDG 13 (Climate Action) emphasizes the urgent need to combat climate change by reducing emissions, and ESG frameworks push companies and governments to take immediate action in line with these goals.

Climate action is not just a moral obligation but also a financial and security necessity. ESG investments often outperform fossil-fuel-heavy companies in the long term, as markets and regulations increasingly favor sustainability. Furthermore, focusing on decarbonization efforts through ESG and SDGs not only mitigates the effects of climate change but also protects vulnerable populations from its worst impacts.

Countries like Sweden and companies like #Unilever have shown that ambitious climate action can drive innovation and financial success. These entities have incorporated ESG principles and have actively pursued SDG-aligned strategies to decarbonize their operations.

Pushing ESG and SDG initiatives is essential to solving the interconnected challenges of oil and gas scarcity, energy security, economic disruption, and climate change. By fostering cleaner, more sustainable industries and infrastructures, ESG and SDG goals create resilient, future-proof systems that can adapt to resource constraints while also addressing environmental and social issues at their core. These frameworks not only help mitigate the current problems but also lay the foundation for a more sustainable, equitable future.

PERJANJIAN PERKONGSIAN TRANS PASIFIK (TPPA) - OLEH NIK ZAFRI

Artikel ini akan dikemaskini hampir setiap hari

1) Penyelesaian Masalah, Laporan Perkembangan dan Peranan

Apabila TPPA dikuatkuasakan kelak, Malaysia perlu menilai dan memulakan pelaksanaannya dengan memastikan penyelesaian mengenai apa jua masalah yang timbul dalam konteks perniagaan, sektor kerajaan yang terbabit dan yang paling penting orang awam (rakyat)

Setiap sektor kerajaan samada di peringkat Kementerian, Jabatan dan Agensi yang akan memainkan peranan langsung harus dijelaskan tugas dan tanggungjawab masing-masing yang perlu dipenuhi, cara-cara dan proses membuat sesuatu keputusan dan peraturan operasi yang tertera dalam Perjanjian berkenaan. Semuanya ini memerlukan urustadbir yang baik terutamanya aspek ketelusan.

TPPA juga memerlukan laporan perancangan dan perkembangan mengenai pelaksanaan langkah-langkah yang telah dirunding dan dipersetujui sepanjang tempoh transisi. Tempoh ini juga harus menyokong objektif pembangunan TPPA dengan memastikan Malaysia benar-benar mampu membina upaya ke atas elemen-elemen penting sebelum dilaksanakan.

Dengan adanya laporan pelaksanaan TPPA, Malaysia harus memantau perkembangannya, menyelesaikan masalah dan memastikan kapasiti bina upayanya berhasil.

2) Impot, Ekspot, Persaingan, Peluang Kerja, Pengiktirafan dan Tariff

TPPA perlu mampu menjadi platform kepada tenaga kerja dan perniagaan di Malaysia supaya kita mampu mengekspot barangan tempatan ke negara-negara anggotanya. Imbangan perlu dilakukan supaya ianya tidak menjadi impot sehala kepada kita semata-mata.

Di sini pentingnya kualiti produk dan perkhidmatan kita mestilah benar-benar diterima dan diiktiraf antarabangsa serta tidak menjadi mangsa 'sekatan dagangan' atau 'pemboikotan' dengan alasan yang tidak munasabah.

(ini kerana terdapat khabar angin mengenai terdapat penduduk negara anggota seperti tidak mengendahkan FTA - maka TPPA perlu menampakkan imej yang jauh lebih baik dari FTA)

Ini kerana Malaysia telah lama mengamalkan Pengurusan Kualiti Menyeluruh (TQM) malah ISO 9001 (2000, 2008 dan terkini 2015) - (sekadar menyebut beberapa contoh) juga melibatkan Amerika Syarikat di dalam Jawatankuasa Teknikal ISO (ISOTC) nya dengan adanya amalan Pengurusan Risiko (termasuk pengurusan risiko bencana banjir - yang juga merupakan elemen penting dalam 'bina upaya')

Produk Halal tempatan juga mestilah diiktiraf kerana ianya juga didasarkan kepada amalan pengeluaran yang baik (GMP) dan HACCP yang juga sistem asalnya diterajui oleh Amerika Syarikat sebagaimana mereka mengiktiraf produk Kosher.

Tingkatkan lebih banyak peluang kerja bukan sahaja di sektor pengilangan tetapi juga usaha gigih perlu dilakukan untuk prospek mereka yang bekerja dari rumah supaya golongan pencen, tidak berupaya, surirumah dsb. benar-benar mendapat manfaat dari perkhidmatan di rumah termasuk akses internet yang lebih baik dari sekarang.

Pengecualian tariff atau cukai (contohnya seumpama ‘taraf perintis’) atau pada kadar yang munasabah di negara-negara asing juga perlu lebih telus bagi memastikan pengeluar, pembekal perkhidmatan, petani, penternak malah perniagaan berskala kecil tempatan dapat bersaing dengan sihat serta terdapat satu bentuk kuota disiapkan untuk mereka dan terdapat data yang jelas mengenai golongan sasaran di luar negara.

Tanpa adanya data yang jelas, maka akan timbul kesukaran mengenai "apa yang perlu dilakukan" (What to do), "Di mana perlu dilakukan" (Where to do), "Bila perlu dilakukan" (When to do), "Bagaimana hendak dilakukan" (How to do), "Kepada siapa" (to who)

Apa yang penting, perniagaan berskala kecil termasuk 'cottage industry' perlu diberikan ruang untuk berkembang kepada tahan Industri Kecil dan Sederhana dan tidak mustahil ianya menjadi industri yang besar dan berkembang pesat.

Bersambung...

IT HAS BEGUN

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The World’s Richest People Lost Another $124 Billion on Monday

The global rout continues 

Tom Metcalf

August 25, 2015 — 6:10 AM MYT

Another $124 billion was wiped off the collective fortunes of the world’s 400 richest people today as the global selloff pushed the Standard & Poor’s 500 Index into its first correction in nearly four years.

Twenty-four billionaires saw their wealth fall by more than ten figures on Monday, including Bill Gates who dropped $3.2 billion and Jeff Bezos, who fell $2.6 billion, according to data compiled by the Bloomberg Billionaires Index.

Mexico's Carlos Slim lost $1.6 billion as his fortune fell to its lowest level since the Index began in 2012.Sliding markets worldwide have resulted in Chinese shares sinking the most since 2007, Germany's DAX falling into a bear market, and commodities reaching a 16-year low, as Brent crude plunged below $45 a barrel.

Last week’s declines had already seen the world’s 400 richest people lose $182 billion. A decline of $76 billion on Friday had put their fortunes into the red for the year-to-date.

The Bloomberg Billionaires Index takes measure of the world’s wealthiest people based on market and economic changes and Bloomberg News reporting. Each net-worth figure is updated every business day at 5:30 p.m. in New York and listed in U.S. dollars.

2.

The Independent - UK

News>Business>Business News>Frontpage

FTSE 100 loses £104 billion in value in one day as China stock slide prompts global selloff

HAZEL SHEFFIELD

Monday 24 August 2015

The FTSE 100 shed £104 billion at its lowest point on Monday, after severe losses in Chinese markets prompted a global sell-off.

Monday’s bloodbath marked the tenth day of consecutive losses on the FTSE 100, the longest straight period of decline since 2003. The index has lost around £218 billion in value in that time.

Many expected the Chinese government to take measures such as cutting interest rates or injecting liquidity to stop further losses after the Shanghai Composite Index fell nearly 12 per cent last week. No action prompted further losses of 9 per cent on Monday.

Since August 11, $5 trillion has been been wiped off global markets after China unexpectedly devalued the yuan.

The Dow Jones also plummeted more than 1000 points on opening Monday, before rebounding slightly. The S&P 500, another US stock market index, dropped 99 points, or 5 per cent.

While plunging stock indices were attributed to lack of action in Beijing, Monday’s selloff follows months of poor data. Last week, activity in Chinese factories was shown to have dropped sharply.

Declining commodity prices continue to weigh oil giants. Glencore, Shell and Rio Tinto, which are all listed on the FTSE 100, suffered the worst declines on Monday.

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$10 Trillion Gone UPDATE: Actually It Was More Like $3 Trillion

Matt Vespa | Aug 24, 2015

Editor's Note: It was originally reported that $10 trillion had been erased, but it's been revised to $3 trillion.  The post has been updated.

Monday got off to a disastrous start for the world economy.

The Dow Jones plunged 1000 points–or 6.5 percent–upon the opening bell thanks to the volatile economic situation in China.

As Cortney wrote earlier today, the market recovered roughly half of its losses by the time trading was suspended for the day.

The New York Times compiled the butcher’s bill–and it was quite steep. $3 trillion was erased from the global stock market since the June 3 peak, the Chinese Shanghai Index lost all of the gains it has made this year, European stocks dropped 5 percent or more, and the U.S. S&P 500 closed four percent down.

At the same time, many analysts knew a recalibration of our bull market bearings was due. Right now, all eyes are on government policy:

“Everything is going to be dictated by government policy,” said Kevin Kelly, the chief investment officer of Recon Capital Partners.

“Whatever noise is coming from policy makers is going to determine the next couple weeks."

”The conversation about government policy is playing into a broader debate about the global economy’s ability to continue growing without the sort of extraordinary stimulus that has become the norm in recent years."

Investors’ worries over China’s economic slowdown and a souring view of emerging economies have rattled financial markets around the world in recent days, and showed no signs of letting up. 

“There was a huge amount of negative sentiment built in this morning,” said Dan Greenhaus, the chief global strategist at BTIG.

Many analysts have said that a correction to stock market valuations was overdue after a long bull market. And it is too early to say how the financial market slump will affect the underlying global economy where goods and services are actually produced and consumed.

Many of the world’s central bankers will have a chance later this week to compare notes and discuss whether new policy steps are needed when they gather, along with finance ministers and academics, in Jackson Hole, Wyo., for the Federal Reserve Bank of Kansas City’s annual conference.

The lack of coverage about China’s economic woes is due to the fact that Tom Brady’s deflated footballs were deemed much more newsworthy. After analyzing a month’s worth of broadcasts, the Media Research Center discovered that “deflategate” received five times more coverage on the Big Three–ABC, NBC, and CBS, than China’s struggling economy:

In a month of coverage, from July 18 to Aug. 18, China’s economic situation was discussed for just 3 minutes and 11 seconds on the network evening news programs.

That coverage was entirely on CBS and ABC and even included a political story about Donald Trump that made a passing mention of China’s currency devaluation.

In contrast, ABC, CBS and NBC spent 18 minutes and 21 seconds on Brady’s appeal and courtroom appearances: more than five times more.China devalued its currency, called the Yuan, in what ABC World News Tonight with David Muir referred to as “a surprise move” on Aug. 11.

That send the Dow Jones Industrial Average down more than 200 points that day. The entire story was a mere 11 seconds long.

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The Independent - UK

TUESDAY 25 AUGUST 2015

News>UK>UK Politics Frontpage

Stock up on canned food for stock market crash, warns former Gordon Brown adviser

JON STONE Monday 24 August 2015

A former adviser to Gordon Brown has urged people to stock up on canned goods and bottled water as stock markets around the world slide.

Damian McBride appeared to suggest that the stock market dip could lead to civil disorder or other situations where it would be unreasonable for someone to leave the house.

“Advice on the looming crash, No.1: get hard cash in a safe place now; don't assume banks  and cashpoints will be open, or bank cards will work,” he tweeted.

“Crash advice No.2: do you have enough bottled water, tinned goods & other essentials at home to live a month indoors? If not, get shopping.

“Crash advice No.3: agree a rally point with your loved ones in case transport and communication gets cut off; somewhere you can all head to.”

Mr McBride credited his former boss Gordon Brown with preventing a cataclysm by nationalising the banking system during the 2008 crash.

“We were close enough in 2008 (if the bank bailout hadn't worked),” he said. “and what's coming is on 20 times that scale”.

Financial markets are unstable and periodically suffer crises which can have devastating consequences for the wider economy.

China's "Black Monday" has plunged the global financial markets into chaos.

The Shanghai Composite Index, China’s most important stock market index, was down 8.45 per cent, erasing a year’s gains in a day’s trading.

The FTSE100 fell 4.5 per cent, hoping £60bn off the price of UK shares, and the Dow Jones in the US fell by over a thousand points in its first minute of trading.

Some analysts have suggested that the stock market slide could be the start of a new global financial crisis.Mr McBride’s suggestions about stocking up on canned goods, setting rally points and stocking up on bottled water were ridiculed by some users on Twitter as over the top, however.

Mr McBride was special adviser to Gordon Brown and head of communications at the Treasury for a period during the last Labour government. 

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A blog about business and economics.

Aug. 24 2015 9:59 AM

China’s Stock Market Is Melting Down—and It’s Taking Markets Everywhere With It

By Alison Griswold

Friday was a rout in the stock markets; Monday is already looking worse. The Shanghai Composite index tumbled 8.5 percent—erasing the last of its gains for the year in its biggest single-day loss since 2007. European stocks have plunged nearly 5 percent. U.S. stocks nosedived at the opening bell:

The S&P 500 fell 99.1 points or 5.03 percent, the Dow sank 991 points or 6.02 percent, and the Nasdaq pitched 335 points or 7.12 percent. There is only one word for all of this, and it is yikes. Brent crude, the benchmark for oil prices worldwide, is trading below $45 a barrel for the first time in six years. Even gold, so often a “safe haven” commodity that investors pour money into during periods of economic uncertainty, is being weighed down

Despite climbing all spring, the Shanghai Composite has now erased its gains for the year. (Yahoo Finance)

What’s behind the apparent panic in the global economy?

Mostly China.

Over the past two weeks, China’s currency fell in value more than it did in the previous two decades. On top of that, all the recent economic data coming out of China seems to fundamentally contradict official reports of the country being on track for 7 percent growth. Investors and analysts have long questioned the accuracy of economic statistics produced by the Chinese government, so seeing those figures can’t have been entirely surprising.

But it’s only recently become clear how big the gap between official reports and China’s economic reality might be. And the bigger that gap, the greater the ramifications could be worldwide. In recent years, China has accounted for up to half of global growth, though it makes up just 15 percent of global output.

Per the Wall Street Journal, China is looking into stimulus measures:

The expected move to free up more funds for lending—by reducing the deposits banks must hold in reserve—is directly aimed at countering the effects of a weaker currency, which could send more funds away from Beijing’s shores.

The moves reflect an economy increasingly failing to cooperate with Chinese leaders’ playbook to control the world’s No. 2 economy.The Journal says this could happen by the end of August or in early September, most likely via a half-percentage-point reduction in reserve-requirement ratios for banks.

Another possibility is to just loosen the reserve requirements for banks that lend primarily to small and private businesses. China’s entrepreneurs have been stifled by the risk-averse tactics of many banks, which prefer to lend to state-owned companies than private, potentially higher-growth enterprises.

Theoretically, stimulating that kind of private-sector growth would be better for China in the long run than falling back on exports, its traditional economic mainstay. (The leading theory for why China’s central bank devalued the yuan is that it was trying to prop up exports.)

At the same time, as the Journal notes, these new “would-be drivers of the economy—high technology and entrepreneurship—aren’t filling the gap quickly enough.” In the meantime, expect a lot of turbulence in the global markets.Alison Griswold is a Slate staff writer covering business and economics.

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AUGUST 22, 2015 9:00 PM  

ECONOMY GLOBAL INSECURITY (Bloomberg)

The world’s 400 richest people lost $182 billion this week from their collective fortunes as weak manufacturing data from China and a rout in commodities sent global markets plunging.

The weekly drop for the Bloomberg Billionaires Index, a group that includes Warren Buffett and Glencore Plc’s Ivan Glasenberg, was the biggest since tracking of the expanded list began in September 2014. The combined net worth of the index members fell by $76 billion on Friday alone, when the Standard & Poor’s 500 Index of U.S. stocks ended its worst week since 2011.

“For them that’s a fractional percentage, even though $182 billion is a big number,” said John Collins, director of investment advisory at Aspiriant, which oversees more than $8 billion for high net worth clients. “A week like this feels really bad, but when you take a step back, in a big picture view it’s not a disaster by any means.”

Friday’s losses put the world’s richest 400 into the red for the year to date. They’re now down $74 billion in 2015, with a collective net worth of $3.98 trillion.

The week’s largest setback in dollar terms was experienced by Buffett, who saw his fortune drop by $3.6 billion as Berkshire Hathaway Inc. slipped more than 5 percent. The investor is the world’s third-wealthiest person, with a fortune of $63.4 billion, according to data compiled by Bloomberg.

The slump in oil, which had its longest weekly losing streak since 1986 amid signs of an extended supply glut, contributed to $15.2 billion in losses for the world’s wealthiest energy billionaires. Continental Resources Inc. Chairman Harold Hamm saw $895 million, or 9 percent of his net worth, vanish this week.

Glencore’s Glasenberg

Glasenberg, chief executive officer of mining company Glencore Plc, lost $237 million during the week as commodity prices slid to their lowest levels in 13 years. Glencore reached a record low in London on Friday, down more than 8 percent from a week earlier, after the trading house reported its profit sank 56 percent in the first half of the year. Glasenberg’s fortune has decreased more than 40 percent in 2015, to $3.1 billion.

China’s 26 wealthiest people, pummeled by Hong Kong’s bear market and a weaker yen, lost $18.8 billion during the week. Wang Jianlin of Dalian Wanda Commercial Properties Co. was hit hardest, losing $3.5 billion.

Eleven billionaires added to their fortunes in spite of the market turmoil. The week’s biggest dollar gainer was Sun Pharmaceuticals’ Dilip Shanghvi. The world’s 39th-richest person became $467 million wealthier, elevating his net worth to $18.9 billion.

The Bloomberg Billionaires Index takes measure of the world’s wealthiest people based on market and economic changes and Bloomberg News reporting. Each net-worth figure is updated every business day at 5:30 p.m. in New York and listed in U.S. dollars.

EUROPEAN UNION VISITORS PROGRAM (EUVP)

ANYONE IN MALAYSIA INTERESTED - A ONCE AND A LIFETIME PROGRAM. 

(Once you've read this article - click on the banner)

What is the EUVP?

The European Union Visitors Program (EUVP) invites young, promising leaders from countries outside the European Union to visit Europe to gain a first-hand appreciation of the EU’s goals, policies and peoples and to increase mutual understanding between professionals from non-EU countries and their EU counterparts.

The EUVP is jointly sponsored and administered by the European Parliament and the European Commission. An EUVP visit consists of an individual 5- to 8-day program of meetings with EU officials at the EU institutions in Brussels, Strasbourg and/or Luxembourg. All programs are coordinated and arranged by the EUVP Secretariat rather than by individual participants. Travel and per diem costs are covered by the EUVP.

The program has been in operation since 1974. That first year, 5 selected Americans made their way across the Atlantic. Since then, more than 600 have followed – by the end of 2003, 611 American grantees had visited the EU through the EUVP. In its first years of operation, the program was only open to Americans, its original impetus being to improve knowledge and understanding of EU development specifically among “shooting stars” from the United States. Since then, however, the scope of the program has grown considerably so that, in 2004, the EU welcomed 170 grantees from more than 70 different countries. Nevertheless, American participants continue to make up the largest single-country group.  (Read about the history of the program)

Who is eligible to participate?

Eligible participants include government officials (local, state, and federal), journalists, trade unionists, educators, officials of non-profit and non-governmental organizations, and other professionals aged 30-40 with career-related interests in the European Union. Ideally, candidates will be professionals in a field where their EUVP experience will enhance their understanding of EU-U.S. relations and contribute positively to their chosen career path. Basic knowledge of EU institutions and their functioning is a plus.

Please note that the EUVP is not designed as a program for students: participants are required to have completed their university education or equivalent training and to have been employed for several years in their chosen career field.

As mentioned above, in addition to the United States, EUVP candidates are selected from a large number of non-EU countries throughout the world. Non-US applicants should contact the EU Delegation in the country in which they have citizenship.

List of these representations

How are participants selected?

EUVP participants are selected by a committee chaired jointly by staff of the European Parliament and the European Commission. Sixteen visitors from the United States are selected each year. The total number of visitors worldwide is generally about 160.

What is the application process?

The Washington Delegation is responsible for applications from Americans, living and working in the United States. Please complete the following forms and send the originals by mail and copy by e-mail to the Delegation, no later than the deadline of March 1st 2015.

• Application Form
• Resume
• Statement of Purpose (the Statement of Purpose should be typed on the official letterhead of the applicant’s employer)

Applications should be addressed to:

EUVP Coordinator

Delegation of the European Union to the United States of America

2175 K Street, NW

Washington, DC 20037

Faxed applications are accepted at (202) 429-1766, but must be followed by originals in hard copy.

Alumni Relations

Alumni Relations - Section for former EU Delegation interns, EU Visitors Program Participants, Graduate Journalism Students Press Visit Participants, EU Fellows, etc.

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Nik Zafri's disclaimer :

The program has no absolute relation to Nik Zafri or this blog. This is a rewritten material or hyperlinks displayed are to promote the program (self-initiatve) to qualified Malaysians - please visit the European Union Visitors Program website for the official information.

Global economic power shifting to Asia

Wolfensohn predicts shift in global economy

It's no secret that a massive shift in global economic power is under way from West to East but the question is whether the old developed economies are ready for the consequences of this change.

Former World Bank president, James Wolfensohn, thinks not. He also thinks the time is rapidly approaching where the World Bank's top job should cease to be the exclusive preserve of the United States.

Transcript

JIM MIDDLETON: Your old organisation the World Bank says that China's current economic model is unsustainable in the medium term. How serious a problem for the rest of the world would it be if China's leaders do not engage in the kind of top to bottom liberalisation of their economy envisaged by the World Bank?

JAMES WOLFENSOHN: Well I think what the World Bank is saying is that any period of 40 years growth, which they're projecting between now and 2050, will have some bumps. And I think they're saying that in terms of the remarkable growth that there's been in China in recent years there may be a slowing, there may be an adjustments in terms of housing, there may be an adjustment in terms of the amount of borrowings. 

But I don't think that the World Bank is predicting any great collapse in China. It is just that there will be perhaps a slowing for a few years but they certainly still believe that by 2050 China will be confident 25 per cent of the global economy.

JIM MIDDLETON: The World Bank is worried about certain factors, for instance the notion that China could grow old before it gets wealthy. The fact that in just five years time China's work force will have more retirees than entrants. These factors do point to the need for a pretty substantial structural renovation, even though China has been so successful over the past three decades.

JAMES WOLFENSOHN: I think that China has shown up to now that it can adjust. It's my belief that there are many people in China, particularly in the rural areas, who have come into more industrialised and city areas. The Chinese themselves are just bringing, I think, 350 million people into that particular group. And I think they're looking forward to the creation of a pretty substantial middle class, along with the middle class that will grow in India.

So what you're saying is absolutely correct. The population will age, but it's against a backdrop, of very substantial growth and there is also the possibility of an extension of the work life in China, which is, I think, something that I is likely to happen.

JIM MIDDLETON: The World Bank is arguing the need for liberalisation; that China needs to move to a market economy. Many Chinese, of course, argue that state capitalism has worked very well, especially given the record of free market capitalism in recent years. Why wouldn't state capitalism work for China into the future?

JAMES WOLFENSOHN: Well I think one of the reasons is that many Chinese, and if you go, as I am sure you do, to Shanghai, Beijing, even to many of the other cities in China, very large cities, you will find that the enterprise is occurring from the private sector. It is not occurring just from the government owned corporations.

It is always been true that the Chinese themselves as a people are quite entrepreneurial. They may still call it state capitalism for another 10 or 20 years but for anybody that show knows China they will, I think, comment on the fact that the individual is becoming a more important factor in the country.

JIM MIDDLETON: Broadening the discussion a little bit, you've noted that by mid -century fully 60 per cent of world GDP will come from Asia. What makes you say, though, that the old developed economies are not ready for this shift? 

JAMES WOLFENSOHN: Well, first all, the proposition is that we will do as was done in the early 1800s and before that in 1500, which is that the weight of the economies of the world will shift to Asia.

And I think there's very little doubt that we will have 50 to 60 per cent of the world's GDP in Asia. If that is true, then the rest of us in the more developed or the Western world will have 30 to 40 per cent, because that's the other part of it; along with whatever Africa has and some parts of Latin America. 

So what I think is happening is you're seeing a shift in terms of both population and a shift in terms of initiative and knowledge. The interesting thing to me is that the Chinese and the Indians are studying with huge numbers in the Western universities, in the United States and also, I've been interested to see, very much in Australian universities, so you're quite used to it.

The truth of the matter is that we in the West are doing very little about learning about the East, learning about what happens in China, learning about what is happening in India. And our young people are just not encouraged or maybe not themselves go to study in these part of the world. Certainly people of my age never thought of doing it. And I'm afraid in we're in a transitional period where parents of my age are a bit less - have not encouraged their children to go and do Asian studies. 

I have very little doubt that it will be a necessity over the next 10, 15 years. And it is my hope that Australia could be a leading country in terms of that transition because of its proximity to Asia and frankly the importance of Asia to Australia in term of the economics.

JIM MIDDLETON: Is one of the logical implications of that shift the global economic institutions, the IMF (International Monetary Fund), the World Bank, G20, also need to change to reflect that changing balance of economic power

JAMES WOLFENSOHN: I don't have the slightest doubt that they need to change. They were invented really after World War II. And there's no question that the balance of the shareholding and the traditions of that 50 plus years have certainly served us well. But the world was pretty much the same until the end of the last century, but starting in 2002 we've seen a significant move in terms of share of global income towards Asia.

The international institutions have not yet adjusted for that. And in another 10 years or 15 years or 20 years we will see a totally different ranking in terms of the economic power of both the world and the representation that you need in those international institutions. It certainly cannot, in the long term, be right that a French person should head the International Monetary Fund and an American should head the World Bank. I don't have the slightest doubt that in 10 years time that will be different.

JIM MIDDLETON: Is 10 years too late, though? Is this now a timely moment for leadership of the World Bank to go to a representative of one of the fast growing and increasingly large developing economies?

JAMES WOLFENSOHN: It only stands to reason that an institution which is concerned with development, and where development has taken place and where some of the developing countries have now reached sizeable positions. After all, China is now the second largest economy in the world to the United States ahead of everybody else.

So it wouldn't be surprising if at some moment a Chinese colleague would head the World Bank. It wouldn't be surprising if someone from Latin America or someone from India with global skills would head it. In my judgment, I think that that would be a healthy development. It's already happened in the management level.

And I think it would be - personally I think that at some point if not the next one it would be an important development to see happen.

JIM MIDDLETON: James Wofensohn it's been a pleasure talking to you.

Economic power shifting to Asia from the West?

Today, as much as China is the centre of global manufacturing, India has become the international hub for global service industries. India’s IT and outsourcing exports amount to over US$ 50 billion.

The economic resurgence of China and India has also made way for the emergence of Thailand, Indonesia, Pakistan and Vietnam as manufacturing bases. This shift of world economic power back to Asia is highlighted in the ADB Key Indicators (for Asia and the Pacific) for 2010.

Today, the Asia Pacific accounts for 38% of the world economy. Europe comes second and North America third. Within Asia over 67% of the GDP comes from three countries – China, India and Japan. It is predicted that Asia will be the main driver of global growth over the next two decades with a newly-emerging Asian middle class of nearly 1.5 billion.

Since 1980, 400 million Chinese people have transcended poverty lines. By 2030 the Chinese middle class is expected to exceed 600 million. In numbers – this will be the largest middle class in the world; and the world’s third largest consumer market. India will be the fifth largest in the world with 520 million consumers. It is this demographic transformation of 1.5 billion Asian consumers, which will fuel global economic growth.

Inclusive growth

However, China and India to fuel global economic growth need to encourage inclusive growth and oppose all forms of trade protectionism. They need to improve the global monetary system and promote new modes of development.

One of the most significant changes today is the collective rise of emerging countries. The emerging countries have become an important force in global affairs. They are no longer in the backseat of global economic governance.

The emerging economies are now institutional players, rule makers and protectors of interests. Many global issues cannot be solved without the participation and support of emerging economies. Currently, China is the world’s second largest economy. Many predict that China’s GDP will soon surpass the US. An IMF report concluded, that calculated on PPP basis, China’s GDP will overtake that of the United States in 2016.

Some scholars predict that global power is ‘shifting’ from the West to the East. 

However, many analysts believe that there is no need for developed countries to lose sleep over this. Developed countries have for centuries accumulated incredible wealth and social and economic infrastructure, which still give them an advantage in capacity and influence over the East.

On the other hand, while the developing countries’ rapid economic growth has resulted in a more balanced distribution of global economic power, they don’t have much of a say still in global political and economic affairs.

Many emerging/developing countries are still far behind the developed countries in overall capacity, international outreach, institutional building and economic and social growth. Global issues are fundamentally about development. World peace and security cannot be built in the absence of stronger developing countries, smaller South-North gap, fewer living in abject poor and a better world order.

China’s challenges

China is today the largest developing/emerging country; it has had an extraordinary economic rise built foremost on the backs of low priced workers. China is seeing fast urbanisation and going through a rapid modernisation process. However, China’s growth is totally unbalanced. On per capita income they are 90+ in the world.

Based on United Nations standards, there are over 150 million Chinese people living in poverty. To become a true global player, China faces many challenges: In 2010, China’s economy grew by 10.3 percent to almost six trillion US dollars.

Yet, the foundation for development is weak. China has a huge population and frequent natural disasters. There is an increasing gap between the Eastern China and Western China, urban, rural regions and the rich and poor.

China also has an ageing population they need to take care of. China therefore would need to invest big to improve health care, education and housing. In addition the real wages in China have increases over 12% per year from 2000-2009 and this could result in some of the manufacturing jobs shifting to India, Cambodia and Vietnam.

China’s emergence

One of the most popular debates is the possibility that the United States will be joined or even surpassed as a superpower by China. What makes a superpower, and what would it take for China to match the United States? A genuine superpower does not merely have military and political influence, but also must be at the top of the economic, scientific, and cultural pyramids.

The most recent genuine superpower before the United States was the British Empire. Many Europeans like to point out that the EU has a larger economy than the US, but the EU is a collection of 27 countries that does not share a common leader, a common military, or a uniform foreign policy.

No doubt the only realistic candidate for joining the US in superpower status by 2030 is China. Unlike the US, China has a population of over four times the size of the United States, has the fastest growing economy of any large country, has the buying power and is also mastering sophisticated technologies. But to match the US economy by 2030, China would need an economy that matches the US economy in size.

If the US, with an economy of $14.7 trillion in nominal terms, grows only by 3% a year for the next 20 years, it will be $ 27 trillion in 2030. This is a modest assumption for the US.

China, with an economy of $5.88 trillion nominal terms (not in Purchasing Power Parity terms) grows at 8% a year for the next 20 years straight will be around $ 27 trillion in 2030.

China will have to sustain these growth levels for a long period of time (no country, let alone a large one, has grown at more than 8% over such a long period).

In other words, the progress that the US economy would make from 1945 to 2030 (85 years) would have to be achieved by China in just the 20 years from 2010 to 2030. Even then, this is just the total GDP, not per capita GDP, which would still be far to catch up because of China’s huge population, US currently $47,000 and China $4200.

Also, the weak dollar also leads some currency experts to believe/ that the US will lose economic dominance in the next few years. The US dollar comprises a dominant 60%-65% of global currency reserves, even greater share than it had 10 years ago, while the second highest share is that of the Euro (itself the combined currency of 21 separate countries) at just 25%.

So is there no currency that has any chance of overtaking the US, particularly a currency that is associated with a single sovereign nation? The Chinese Yuan represents fewer than 3% of world reserves, and China itself stockpiles US dollars and Euros. Clearly, US dominance in the global currency market is enormous, and very unlikely to lose that edge in the foreseeable future.

Furthermore, unlike the US brands Chinese brands have always been labelled as cheap and obscure quality, and suffer from weaker popularity compared with brands. But the Chinese market is consolidating quickly and has already nurtured some well-known brands in recent years. However, they need combine their image with US factors, to prove their brand competitiveness to domestic consumers and set up high-end brand images.

The US to retain its dominance will however have to manage the debt ceiling (foreign debt $ 13.5 trillion and domestic) and get their private sector that collectively owns over $ 2 trillion to stand up and lead the recovery without depending on fiscal stimulus from Obama.

(The writer is CEO, HR Cornucopia.)