Lance Wiggs

Pathetic.

Official development aid worldwide actually fell by 8.4%, in real terms, last year. This meant a drop from 0.31% to 0.28% of OECD member’s GNI, rather than rising up towards the 0.7% of GNI agreed to at the Gleneagles G8 and UN Millennium + 5 summits in 2005.

Much of the change was because debt relief programs last year were not repeated - they should be and they should be extended.

Get informed on this stuff by reading Stiglitz’s book - “Making Globalization Work“, which captures the concerns of the globalization activists and NGOs and answers with some very practical solutions. It’s highly readable to boot.

NZ’s ODA contributions rose by 3.7%, but we are languishing at the back of the pack in dollar (acceptable as we are tiny) but also %GNI terms.

Some charts

Wheat, sugar and rice, along with “certain paper products” those are the items that will remain subject to tarrifs when we export them to China. They represent about 4% of our exports to China, so not a bad outcome.

All three grains are subject to some pretty serious subsidization and quota-driven distortions in the world markets, and we are not serious contenders in the field. So forget about it - let the USA and Europe carry on paying their farmers billions to grow uneconomic wheat and protect from cane sugar imports. This does deprive the developing world of huge export markets for their otherwise competitive farm proucts, but that is a different war.

Overall I’m impressed with the deal - pretty straightforward lowering of barriers and some cultural exchange (working holidays and the like) built in. No horrilbe DCMA copyright provisions, no distorting pseudo free trade - this is pretty close to a good as it gets, though dairy products will take until 2017-2019 and wool is subject to a quota.

Well done to both China and NZ’s negotiators.

The rules of origin seem to be pretty fair - a lot of “change to heading xxx from any other chapter”, by product, which I interpret as meaning that  if a country makes a product from sub product parts that came from elsewhere then it is still duty free.

But what of the human rights, I hear squealing from the left?

Well, another way to look at that question is to ask a similar question: do we believe that the USA should remove their distorting sugar quotas (that keep Cuba’s producers down), trade embargo and travel barriers to Cuba?

Of course they should - engagement is the best way to help another country move forward, and by being open with China we are able to help them welcome them to the world.

And besides - do we really think we, the last decent sized habitable land discovered by humans, can tell a 6000 year old civilisation, land of 1.3 billion, how to behave?

I think not - we punch above our weight, but they are in another game entirely

So you lose a $35 billion deal to a competitor that you have been keeping away from your major customer for years. What do you do?

Well if you are Boeing, the customer is the US Government (Airforce), the competitor is Airbus and the product is refueling tankers, then you start a blog.

and launch an advertising campaign.

and protest the tender process.

While Boeing can depend on getting some support from local Americans that want the local provider versus the “French” Airbus, in reality the situation is a lot more nuanced. Both competitors are really global companies now - Boeing has outsourced much of its manufacturing to Asia, while Airbus will set up manufacturing in the USA for this deal.

Boeing are risking a lot by officially protesting this decision. If they lose then their reputation is damaged, and if they win then the buyers and users will forever remember that they are getting the second pick. There’s a smell of sour grapes to the whole affair, but perhaps Boeing is being smart by letting the US Government buyers know that they will make it tough for anyone that chooses a foreign competitor.

The comments on the blog are interesting - ranging from the barely articulate to the surprisingly informed.  Here’s one:

Bill Parson (Colorado Springs):

I write to express disappointment at Boeing’s decision to protest.

1. The Air Force asked for a tanker between 300,000 and 1 million pounds gross weight.

2. The Air Force in it’s RPF stated that they would award to the contractor who “met or exceeded the requirements.”

3. The Air Force in its RFP stated this was a capabilities-based, best value competition

4. Northrop Grumman offered more for the same price.

5. Why did Boeing tout:
- Made in America
- Jobs
- Fuel Savings
- Size

None of these were AF requirements?

….

and here’s another:

Paul Jernberg (Michigan):

I too am dismayed by the recent Air Force bid competition. Again the USAF appears to be buying something bigger than what they need or started out looking for (KC30) they also changed the rules of the competition in mid-stream. I also do not understand how/why Northrop was allowed to design the program that the USAF used to make their decision. I think maybe Mr. McCain should start an investigation into wrong doing by Northrop in this case.

I have spoken with the staff of our State Senator, MR. Levin (chairman of the arms committee), they have assured me that he is watching the GAO review very closely and will step in to do what is necessary if he feels the GAO does not respond in the appropriate manner.

Do not give up the fight, this is much too important.

Paul

Kudos to Boeing for putting up the blog and allowing comments to flourish.  Dangerous, but well done to open the conversation.

There is plenty of other commentary online - including pro-Boeing Tanker War Blog run by DC insiders and lobbyists,  Wired’s Danger Room has a great post and the WSJ has an article - which mentions the history that the Boeing blogs conveniently forget to mention:

The decision sparked outrage among Boeing’s supporters in Congress, as well as criticism for Republican presidential candidate Sen. John McCain, who led the fight to scuttle a previous deal that would have given Boeing the contract without a competition. That deal was doomed in part because it was later learned that a Boeing official had engaged in illegal employment negotiations with an Air Force procurement official who played a role in setting up the contract. 

Most of the financial commentary seems to indicate that Boeing has no chance - but like everything in DC, this is political, and anything can happen.

Score one for protectionism, and minus several ranks of the economic freedom index for New Zealand, after the Government intervenes to prevent a Canadian fund from buying into Auckland airport.

When the market drops by 2% after a new protectionist law is created it should be obvious to everyone the impact of ham-fisted interventionist Government policy.

This law means that the Government has reserved the right to change investment rules on a whim, and so the risk of investing in New Zealand has just risen substantially. Foreign investors will apply a higher risk rating to NZ, and so will demand higher returns for their investments. That means less foreign money coming in, and ultimately, lower growth.

Is this what the govenrment is promoting? Lower growth?

There are plenty of ways to protect “strategic assets”. Changing the investment laws is amongst the worst of them.

Sky may be forced to not bid for exclusive access to big events of “national significance”. Well, it’s one of several proposals apparently, so let’s not jump up and down yet.

The result would be less incentve for sky to bid for those events, and therefore a lower final price. That means less money to the organisers of those big events, and therefore less big events. Do we want that? (arguably yes, what with all the big matches from a multitude of sports that we are expected to keep up with.)
It would also mean that whatever free-to-air channel wins the rights to those events will insert lots of ads, rather than the relatively ad-free Sky environment.

As with the world cup over here in Australia, I’d vote with my feet and watch the event later on Sky, ad free, rather than the HD yet ad-filled version on the free to air broadcaster.

A timely topic as we head out on the annual Christmas travel-fest. It’s dangerous on those roads, and we all need to do something about it.

The NZ Government has come up with their list of measures to reduce fatalities on the road:

Increased demerit penalties for crossing stop lights
Increased demerit penalties for faster speeds as % of limit
Faster loss of license for reoffenders
Easier to confiscate cars
Less material fines
Longer training periods
BOC stays at 0.08%

Those are pretty good - I’m a big fan of the stop light one, but they don’t address the major reason why the USA, say, has a much lower rate of road death than we do.  It’s the quality of the roads, an segregation of the traffic.

BHP Billiton, meanwhile, is also passionate about reducing injuries, especially fatalities. BHPB worked on identifying the leading causes of fatalities, and now are spending considerable time, money and inconvenience to reduce them. (It is rather more inconvenient to die of course).

Here are some of the measures from one of what BHP Billiton calls  “Fatal Risk Control Protocols“.  FRCP 1 aims to eliminate fatalities from Light Vehicles across their sites.

If we were serious about moving from 300 to zero deaths per year, this is what you would see introduced:

15-20 kmph speed limit, depending on site
Zero tolerance for disobeying road signs
ABS and airbags mandatory in all light vehicles
Rollover protection mandatory for all 4WD vehicles
Reflective tape and a light colour
Segregation of pedestrians and traffic where possible
Segregation of light vehicles and industrial vehicles (or use flashing light & flag)
0.00% tolerance for alcohol for everyone on site
Comprehensive pre-start check for each vehicle each day by the driver
Lights on at all times
No mobile phones while driving

Penalties: Kicked off site, out of work, and difficult to get re-employed elsewhere in industry as you are clearly a safety risk.

That’s a great list, though that speed limit is never going to work on the open road . But frankly on a BHPB site I’d have no incentive or felt need to go any faster - safety is much more important to everyone than how quickly you can get from A to B.
Above all, safety on the road starts with the individual. You decide whether you will be safe - and that means making sure you are safe even when everyone else is not. Motorcyclists are very familiar with this approach - there are plenty of times when cars will kill you unless you take action, but there is no sense in being dead and right.

Looking at those BHPB requirements, which are derived from hard evidence, we see that many of them are eminently adoptable by ourselves.

e.g.
Buy a white car with ABS  & turn those lights on
Don’t drink anything before you drive.
Never go through a stop light
Drive within the limit of the road, vehicle and yourself.
If you are a motorcyclist, then make sure you wear light colours with reflective bits - if you are sliding along  the road you want the cars to see you.

And so - how am I going?

I have white, red and bright orange motorcycles, with lights always on
I almost never drink and drive, and when I do it is max two drinks and lots of time.
I have a pathological need to stop on orange lights (while looking in my mirrors)
I ride fast, but in control, and slow right down near people.
My bike clothing is light and reflective.
But sadly speed limits are relatively arbitrary for me. It’s safety first, limits second. Expect me to be under the limit in a small busy town, and don’t be surprised to find me well above the limit when overtaking.  The speed limit to me has been guidance, and while we should throw the book at people for ‘dangerous driving’, a few kms over a poorly crafted limit is no big deal to me.

So I’m not a fan of the increased demerit points for exceeding a speed (100 kmph) I can do in 3 seconds or so from a standing start.  But I do understand why it has to be this way.

But now let’s fix the roads.

Why is it so complicated to wire money from the USA to NZ? I know the US laws are convoluted, but BNZ certainly isn’t helping reduce barriers to free trade with these instructions:

Dear Mr Wiggs

Thank you for your enquiry about transferring funds from the United States
to Bank of New Zealand.

In order for funds to be sent successfully from Banks and Credit Unions in
the United States, the following instructions need to be followed. If these
instructions are not followed, there is a risk of your payment being
delayed or being returned to the United States.

The instructions the sender will need to forward to their bank in the
United States are:

“Pay via FEDWIRE type code 1000 Customer Transfer utilising product code
centre Payment through SWIFT by MT103 (Customer Transfer).”

Pay to Receiver:

ABA #021000089
Citibank N.A.
New York City, NY

For A/C with Bank:

A/C 10933728
Bank of New Zealand
Wellington

Favour Beneficiary:

xxxxx (me) Wiggs
xx-xxxx-xxxxx-xxx

Bank to Bank Info:

xxx Branch
xxxxxx
Wellington

There is an inwards processing fee of $15.00 to receive a TT. This fee is
generally debited from the amount transferred. The overseas bank may also
charge a fee to process the transfer.

If you have any questions about the above information, Mr Wiggs, or if I
can help further, please reply to this message or contact us on the numbers
listed below.

Thank you for contacting Bank of New Zealand.

Kind regards

xxx xxxxx
Customer Service Representative
Better Off - Bank of New Zealand

Phone - 0800 275 269 or +64 4 494 9098 from overseas
Fax - 0800 329 269 or +64 4 470 3071 from overseas
(Toll charges may apply for international numbers.)

Find your nearest Bank of New Zealand branch:
http://www.bnz.co.nz/About_Us/1,1184,3-52-146-465,00.htm

Via Freakanomics, it seems that for men US$222, and for woman US$94, is the true cost of a packet of cigarettes, when you add in the net preent value of the damage to your health and lifespan.

The public sector economist in me says that you should  step in when there is a big disparity between the price of something and its full externality-loaded value.

That means charging a tax on Carbon emissions so we can slow global warming, taxing  petrol to ensure there are less cars and less fuel used, and, yes, charging nearer to the real cost of those cigarettes.

While $222 is too high - people will just grow their own - why not change the paradigm, and make the cost $20 or $40 per pack? That’s really sending a strong message. Sure it will reduce tax income as we’d expect use to drop right off, but we are serious about health right?

Part of the blame for the underinvestment by Telecom, and under0-reaction by the NZ Government has to go on the National Party’s Maurice Williamson:

A rare written question from National Party communications spokesman Maurice Williamson to Communications Minister David Cunliffe in May… …asked Mr Cunliffe how New Zealand’s {broadband} ranking compared with its position in 2000

The written question was one of only a handful levelled at Mr Cunliffe by Mr Williamson since he took back National’s communications portfolio in August 2004. Since the last election he has made no media statements on IT or communications policy, maintaining a low profile that led Mr Cunliffe to dub him “the invisible man”.

This is not what we expect from the loyal opposition. Why the heck were National not all over this one - pounding the table in reaction to the pent up demand from a frustrated New Zealand?

Why?

It’s great news. Score plus one for Paul Reynolds, who is making all the right moves as he embarks on the Telecom turnaround.

I’m running on the promised ADSL2+ here in Perth, and it is fast enough for most purposes, with an upgrade path to 20 MB per second ahead for TCNZ.

Sadly - that 20 MB is in 2011, whereas it should have been right now. But it will still put us ahead, in 2011, of where everyone except Finland, Korea and Japan are today.

(yup - I can see the bad in almost anything)

The US State Department (foreign service) is enforcing postings in Iraq - there is no turning them down it seems, else you lose your job. That’s scary for 250 or so people who will be informed on Monday, and have just 10 days to reply. The only excuses allowed are medical it seems.

I know a few folk in the US State Department, which has traditionally attracted the best and brightest, from both sides of the partisan fence.  This is terrible news for them, for the Department and for those recruiting aspiring diplomats.

The correct answer would have been to wildly increase the incentives to increase the numbers of people that want the postings - even (especially) if the required pay matched or exceeded those of the contractors hired to protect them.

if you want to see what Al Gore could be like as a US Presidential candidate, then look at this camera phone video. He is passionate, and calls Bush on the blunders before 911.

It’s an utter transformation - the cumulation of the change that we partially saw in An Inconvenient Truth.  Has the Nobel emboldened him? Is the timing right for some Democraic backbone? Or is the world better off with Al continuing to evangalise on global warming,

via Celsias

Good news, from the WSJ blog:

Ted Truman, a former top Federal Reserve and Treasury staffer now at the Peterson Institute for International Economics think tank in Washington, with a scoreboard that ranks 32 sovereign wealth funds from 28 countries on 25 elements in four categories — structure, governance, transparency and accountability and behavior. His bottom line: New Zealand’s Superannuation Fund ($10 billion) and Norway’s oil-fueled Government Pension Fund-Global ($300 billion) score the highest. The Qatar Investment Authority ($50 billion) and Abu Dhabi Investment Authority (estimated between $500 billion and $875 billion) score the lowest.

Sadly  the Super fund is trivially sized in comparison with those others, but hey - perhaps they can follow the Yale model and turn out 20% year after year?

So Office Max (enterprise value US$4 billion), subsidiary Croxley Stationery, wins a NZ anti dumping case against 15 stationary importers from five South East Asian countries.

Apparently selling stuff in New Zealand for cheaper than other markets is bad.

The law is an ass - I’d rather have that cheaper stationary thank you, and I’d rather the US conglomerate competed fairly against it’s competitors without recourse to what is a woeful law.

Does the MED really think that 15 companies are COLLUDING to bring in stationary for less than it costs them overseas. Wouldn’t a rational mind think that perhaps we have a more competitive market here than they have in their home, and that all but one company in the NZ market are competing on a level playing field?

Companies will sell their products at the profit maximising price in any constituency. That means if there is healthy competition then the prices are lower, and if there is an oligopoly or monopoly then the prices will be higher. New Zealand has worked hard at free trade, at fair trade - and this sort of distorting decision puts us alongside, at least for stationary, the appalling trade laws in the USA.

what a difference a headline can make.

Both Stuff and NZHerald went with “NZ is 13th most taxed country in the OECD”.

The OECD has 30 members - something that took me - oh - about 15 seconds to find. Or you could look at the handy chart int he NZHerald article.