Author: Ben Debski

Carbon wars

Posted on by Ben Debski

What began as a well-meaning attempt by the European Parliament to reduce carbon emissions by the aviation industry is on the brink of ending up as a full-scale trade war between Brussels and a furious group of nations headed by America.

And it’s all coming to a head. In April the US Senate will consider a ban on American airlines from complying with the European initiative, known as the emissions trading scheme (ETS), designed to clean up its airspace.

In this, America is following China, the first nation to block its airlines from observing the scheme, and India which did so in late March. “In accordance with the government’s directive, no Indian airline will comply,” announced civil aviation minister Ajit Singh in a slap in the eye for Brussels. “The carbon tax will therefore not be levied.”

Furious at what they see as European lawmakers’ high-handed and arbitrary action, these  opposing nations see the scheme as an unwarranted attack on their aviation industries and sovereign rights. They point out that the scheme applies not just to emissions in European airspace but to emissions on the entire flight, there and back.

Also lined up against Brussels is much of Latin America as well as some eastern European nations, while Russia is expected to follow China and India in a boycott.

Patience is wearing thin. At a late-March hearing of the bi-partisan transportation committee in the US Senate, chairman John Mica urged the White House to take action against Europe unless the European Commission modifies its stance. “We have to have a united front and show people we mean business,” he warned. One option under consideration by the Obama administration is retaliation against European airlines flying into North American airspace in the shape of higher landing charges or other penalties.

Hard lines
Both sides have taken hard lines. Europe’s climate commissioner Connie Hedegaard is the banner-waver for the scheme and has been shuttling back and forth between Brussels and Washington to try and strike some kind of compromise. However she insists the EU will only soften its position if the International Civil Aviation Organisation, the United Nations body, strikes a global agreement with its members. There’s no sign of this happening at the moment.

Meantime the deadline for a face-saving resolution of the issue is running out. The scheme will start hitting airlines in the bottom line from next year when they have to buy permits for their carbon emissions. The current year is a transitional one but current costs are rising and future costs will be even higher.

As Lufthansa chief executive Christoph Franz points out, European airlines are already spending millions preparing for the scheme. But by the end of 2020, they will be paying an estimated $12bn collectively; and that at a time when they’re being hit by sky-high fuel prices and low profits.

Anxious Airbus
One of Europe’s biggest export companies, Airbus, has also been caught up in the issue. In protest at ETS, China suspended earlier this year a US$14bn order for the aerospace manufacturer’s passenger aircraft and India is threatening to do the same.

An alarmed Airbus has added its weight to the rest of Europe’s aviation industry –  airlines, engine manufacturers, materials and other suppliers – to plead with Brussels to resolve the dispute before it’s too late. In a rare show of solidarity, even Boeing has joined forces with its great rival and approached the European Commission to hand the impasse over to the UN.

“This is not about Boeing and Airbus. It is about what is best for our customers and how the industry as a whole can reduce its carbon footprint,” Jim Albaugh, civil aviation director for the American group, told Reuters. “In my opinion the European ETS mechanism is not the right approach. It should be suspended and we should work at the ICAO.”

For good measure the scheme has also antagonised the thriving business jet industry, which lobbied against it from the outset. Some operators may have to retrofit newer, more fuel-sipping engines to older aircraft to avoid high penalty charges, points out Steve Brown, vice president of operations at America’s National Business Aviation Association. He suggests operators also look at the advisability of fitting winglets, conducting weight-saving analyses of the payload, and limiting passengers’ baggage allowance among other economies.

Fuel saving techniques offer the biggest pay-off, he suggests. Engines should be started up only when the aircraft is facing in the out-bound direction and, if possible, only one engine used for taxiing. In-flight engines should be run at maximum-range cruise power settings, as research by Gulfstream Aerospace shows.

Gold-plating
Because the scheme gives relative autonomy to different nations to apply it in their own way, business-jet operators fear a “gold-plating” exercise whereby some countries add extra conditions. UK’s Environment Agency, for instance, charges European operators f3,000-5000 – and US operators as much as US$9,000 – for routine compliance in the form of “subsistence fees” and related costs while the process is free in some countries such as France, at least for the moment.

The seeming unfairness of the charges has particularly irritated American operators, they told the magazine. As aviation consultancy Universal Weather’s Adam Hartley, supervisor of the global regulatory services team, points out: “These fees apply before the operator has done anything to the environment.”

Under pressure from business-jet operators such as NetJets, Brussels has made some concessions. For instance, paperwork has been greatly reduced for so-called “small emitters” that produce less than 25,000 tonnes of carbon a year (up from the original ceiling of 10,000 tonnes) or less than 243 flights over three consecutive four-month periods. However that concession, which affects 900 operators, followed a three-year battle by the European Business Aviation Association.

Some of the least happy operators remain US-based Fortune 500 firms whose executive jets typically fly straight in and out of Europe for business meetings. “And the majority of those emissions are not in European airspace,” points out Hartley. Furthermore, many (mainly US) operators were assigned quotas based on the routes they flew two or more years ago, but don’t any longer.

Addng to the chorus of disapproval, Fabio Gamba, chief executive of the European Business Aviation Association, the political pressure on the European Commission to ”abandon, defer or reduce” the scope of the scheme has been “growing by the day”.

26 countries against
At the moment Brussels’ main problem is that ICAO’s member nations are broadly opposed to the scheme under which offending airlines are liable to pay h100 per tonne of excessive carbon emissions. Of the organisation’s 36 member nations, 26 are hostile. They argue that the European scheme should be limited to EU airlines only. It’s highly improbable therefore that the scheme will survive in its current form if it lands on ICAO’s plate.

America’s general aviation industry in the form of the big commercial airlines have spearheaded the battle and goaded the White House into action. Late last year Airlines of America, representing the major carriers, lost out in Brussels when the European Commission’s advocate general advised the scheme was “compatible with the provisions and principles of international law invoked.”  That was a first step to a binding ruling by the European Court of Justice. Next, Airlines of America took the fight to UK courts but have since bowed out and handed the baton to Washington as international pressure grows.

A truce?
What is the likelihood of peace breaking out?  Bosses of most general carriers, even European ones, are fast running out of patience with Brussels. Although he supports greener and cleaner airlines, Lufthansa’s Christoph Franz believes a truce is called for. “It is imperative to avoid a trade war,” he said at an International Aviation Club lunch in Washington in late March. “We are already in the middle of the mess. In order to avoid a trade conflict, for the time being we should sideline the EU ETS and get a commitment to negotiate ETS through ICAO.”

Stephen McNamara, spokesman for Europe’s biggest low-cost operator Ryanair, believes the scheme should be abandoned altogether. Describing it as an “eco-loony tax”, he says airlines account for less than two per cent of all emissions. Anyway, he added, the cost will only be passed on to passengers at a rate of h15-20m in 2012 and, of course, much more next year when it comes fully into force. (Other airline chiefs accept that aviation causes about four per cent of emissions in Europe.)

Meantime Brussels could be backpedalling. The latest message from the European Commission is that, while it’s “confident all airlines will comply with European legislation,” it suggests the ball could yet be thrown into the United Nations court. As spokesman Isaac Valero Ladron said recently, Brussels was “firmly committed to a global agreement and the continuation of work at ICAO.”

In short, if the UN authority was able to strike an agreement, the European Commission would move to amend its laws accordingly. By anyone’s standards, that would amount to a climb-down.

When jets lag

Posted on by Ben Debski

There was a time when business travel was all about privilege. Executives who had clawed their way up the ladder to the giddy heights where boarding a jet plane was testament to their achievement, came to expect a level of service and luxury approaching that lavished on the upper classes who had ruled the world before industry took over.

Times have changed. Now, with digital communication technologies keeping the world online 24/7, executives find they have no time to switch off, and time itself, rather than luxury, is what they are demanding from their travel providers.  Despite continuing to charge premium prices for business class service, however, the industry is struggling to deliver.

Many corporate travel policies now proscribe business class on all but long-haul flights, where the ability to stretch out for a sleep is deemed to be value-for-money. On shorter flights, consider the prices being charged: a recent check on the internet shows a leading flag carrier charges g283 for a midweek two-day journey from Berlin to Madrid when booked one month in advance.  A business class seat on the same flights would set you back f944.

Despite what they say, the airlines cannot actually deliver you to your destination any faster. They may let you board the plane first, but then you have to sit and wait while the economy class passengers are loaded in the back. Your luggage may be unloaded first, but you have to get through the same interminable queues at passport control as everyone else; often, by the time you get through to the baggage claim area the luggage from the entire flight has been sent down.

When it comes down to it, only the airports themselves can shave time off your journey, yet getting through an airport today takes more, rather than less time than it did ten years ago. The main delays occur around the security and border control areas. While it is clearly in everyone’s best interests to make flying as safe as possible, the seasoned business traveller must still endure the frustration of standing in a queue with first-time travellers who hold up an entire line of people while they repack cases and remove their shoes for the security scan.

One solution being tested in several major airports is the use of iris recognition software that is linked to a database of pre-supplied personal information. At a recent IATA conference, the head of the US Transportation Security Administration announced plans to trial a system that will differentiate between regular travellers and those less experienced. Unfortunately, several iris recognition systems have already been abandoned because they were breaking down or taking longer than the immigration officer doing a manual check.

But the travel industry is waking up to an opportunity to profit from the plight of the time-pressed business traveller. Low-cost airlines across Europe charge extra for the privilege of boarding ahead of the masses, and airports are beginning to charge for the use of their Fast Track security lines. Paying the price does not always guarantee a faster journey to your flight: if the plane is at a remote stand, the priority boarders will just get onto the transit bus quicker, and passengers who have paid for the right to use Fast Track security often find themselves queuing behind families with small children who have been told to join the Fast Track queue to speed up the other lines.

Despite these occasional frustrations, however, many savvy business travellers told to avoid business class are combining several of these services and finding their experience is not dissimilar to what they used to get in business class – but at a fraction of the cost. With one or two airline loyalty cards plus an airport lounge access card costing around h399 per year in your wallet, and paying for the Fast Track service in the most congested airports, you may find yourself with that precious extra half hour in the office or the airport to deal with emails.

Even the benefits of long haul business class are being challenged: One blogger suggests that by purchasing three consecutive economy class seats (£329 each) on a flight from London to Hong Kong, you could stretch out for a snooze and save yourself £1,065 on the price of a business class seat.

Shirley Redpath is a business journalist, and enjoys globetrotting on a regular basis

A continent apart

Posted on by Ben Debski

Outside the two main continental gateways, Cairo and Johannesburg, and the small number of regional hubs like Nairobi, Addis Ababa and Accra, very few African destinations are served by the big international carriers, while the footprint of African national carriers remains a fraction of what it was in the colonial era.

There are nearly 3,000 airports between Cairo and the Cape, but fewer than 280 currently host regular scheduled flights, and significantly less if only long-haul flights to and from international destinations are included.

In the second decade of the 21st century, Africa still throws up some truly bizarre anomalies.

A passenger wishing to make the short flight from Freetown in Liberia to Banjul in the Gambia, for example, still needs to take a flight from Freetown to Accra in Ghana, book a connecting flight to London, then fly on to Brussels, before finally reaching their West African destination – travelling more than 15 times the short-hop distance between Freetown and Banjul.

Over the past two decades, dozens of airlines like Ivory Coast’s Air Afrique have disappeared, and hundreds of routes served in colonial times have been withdrawn, as one after another African national carrier went bankrupt because of decades of breath-taking inefficiency, stunning incompetence and corruption on a grand scale.

Few travellers today remember any of these excesses – but some of them were epic. Ghana Airways under independence leader Kuwame Nukruma, for example, used to schedule a regular flight from Accra to Moscow. The aircraft invariably had only a handful – and often no passengers, and haemorrhaged money. But impoverished Ghana was happy to fly empty aircraft to the Russian capital to let the world know that it had close ties with the former USSR during the Cold War era.

President Robert Mugabe regularly commandeered Air Zimbabwe’s schedule aircraft to take him and his wife and family on diplomatic and shopping trips to Europe and the Far East – enraging thousands of passengers – myself included – who had paid hard cash for their tickets, and who were left stranded by his imperial antics. So it’s hardly surprising that Air Zimbabwe doesn’t fly anymore.

That kind of attitude to commercial realities helped eventually to drive scores of African flag carriers into the ground. Running an airline is a difficult and complex operation. You need to have sophisticated ticketing systems, dedicated staff, aircraft that are regularly maintained, adequate ground infrastructure – no carrier is going to allow its sparkling new Airbus to land in a country where the runway at the international airport has potholes and no landing lights – and a reasonably cooperative political environment to succeed. Africa falls down on every one of those criteria.

But the tide is now beginning to turn. Loss-making Air Botswana was turned around by new management which introduced the novel idea that everyone who flew on the airline had to buy a ticket. Most African national flag carriers were government-run affairs, and staff from pilots to baggage handlers (and their extended families), felt that it was their birth right to fly for nothing as a perk of the job. Little wonder that most of them went bankrupt.

Moreover, with continental Africa hosting six of the world’s ten fastest growing economies in 2011, the demand for business travel in Africa has been growing exponentially. The number of regional carriers – which help feed business travellers to the handful of hubs that operate long-haul destinations, are starting to multiply. While the traditional carriers in Europe and America have been slow to recognise this growth, carriers from the new emerging markets in China, India and Brazil have not – and the number of South-South air routes is growing fast.

Stelios Ioannou is currently embarking on a new venture in West Africa.

In an African version of EasyJet called FastJet, Sir Stelios wants to acquire 15 aircraft to link Accra with six regional capitals. Africa-focused conglomerate Lonrho has already launched its Fly 540 low-cost airline in East Africa, and domestically in Ghana and Angola, and it has ambitions to expand. It may still be hard to reach most African destinations – but perhaps not for much longer.

Michael Dynes is a business and lifestyle journalist, specialising in subjects related to African culture and economics

The default dynamic

Posted on by Ben Debski

The European debt crisis has been, and continues to be, a learning curve for all member states. While exposing the fundamental frailties of some nations – those economies that had been largely based upon ill-advised strategic borrowing decisions taken in the last decade – it has also served to highlight the economic integrity of others. Principally this is Germany, which for the past 50 years has steadfastly adhered to a policy of domestic industrial development and economic austerity.

But today, whereas some member states are struggling and require financial assistance from their more stable neighbours, austerity is also proving to be a very bitter pill to swallow.

The plight of Greece, and to a slightly lesser extent Portugal and Ireland, have been well documented. But Italy faces a similar fate. If Italy defaults on its debt of g1.9trn, the fallout could seal the fate of the eurozone.

Recently, Italy’s borrowing rate reached a record g7.5bn following a bond auction. Furthermore, the yield on its current three-year bonds is almost eight percent, and its 10-year bonds also have spiked to 7.56 percent.

History repeated?
But this problem within the EU has repercussions that have the potential to be felt much further afield. Goldman Sachs and some US banks guaranteed somewhere in the region of h1trn of European sovereign debt by selling swaps or insurance against which they have not reserved.

However, the fees these banks received for guaranteeing the value of European sovereign debt instruments has largely been dropped into a pot to report operating profits and pay bonuses.

This is the type of accounting that brought Lehman Brothers and AIG to their knees. Subsequently, if any of the European sovereign debt fails, US financial institutions that issued swaps or unfunded guarantees against the debt will be in for a massive shortfall. The failure of European sovereign debt, therefore, could have a spectacular knock-on effect, essentially re-igniting the US financial crisis. This could therefore culminate in a new round of bailouts and quantitative easing.

Germany, however, is the key nation to help save the euro, the EU itself, and any possible repercussions amongst countries that rely on sovereign loan repayments. The reliance on Germany is not simply because it is the wealthiest of all the EU nations, but because its industrial strength is one that could initiate and support a bailout fund.

Germany’s credentials as the leader of the EU began shortly after the second world war, when, in 1952, it became a founding member of the European Coal and Steel Community – essentially the precursor of the EU. Further to this, partly because of the curbing of its powers of autonomy in the wake of the conflict, but largely because of its astute policies, Germany has unwittingly propelled itself to the forefront of the EU pack, today shaping up as the only member state capable of implementing any form of economic or fiscal reforms to save struggling nations, and indeed the EU.

Standing on the shoulders of giants
While other major EU economies have failed or are in deep recession, Germany has posted growth of three percent for more than two years running. Nicolas Sarkozy, in a battle to win re-election, now openly cites Germany as a model and has enlisted German chancellor, Angela Merkel’s help in the campaign to repair his own damaged credibility.

Indeed, no other nation is better placed to lead the EU out of its current malaise. Since the euro crisis began in 2009, Germany has been the only country to have the financial shoulders to decree the double Greek bailout, and its unwavering demand for austerity help has seen the demise of the profligate Silvio Berlusconi in Italy and George Papandreou in Greece. It has also imposed what has been termed a fiscal compact for EU budgetary discipline.

Despite its prosperity and benevolent position towards fellow EU members, some states seem to have long memories. The unification of the East and West blocs in 1990 should have assuaged anxieties, but this, instead, seemed to re-ignite French, British and Russian fears over the new republic.

Since then its dedication to the EU – Germany having long been one of the most passionate supporters of European integration – should have been cause for celebration. But some quarters responded to Germany’s assertiveness with scepticism, unfortunately recalling the regime of the 1930s and 40s.

Furthermore, in more recent times, Germany’s opposition to the wars in Libya and Iraq was greeted with discontent and a sentiment of disunity. In short, whereas for many years within the EU Germany has held the same rights (and therefore the same obligations) as its neighbours, there remain within Europe people who worry about too much German leadership rather than too little German leadership.

Also, the austerity regulations that Germany and other leading member states has placed on member states such as Ireland & Portugal – with the ultimate objective of them maintaining their own autonomy and identity – has created resentment.

Finally, some commentators have pointed to pivotal actions or omissions by Germany in the mid-2000s that may have been the precursor to the crisis suffered in Southern Europe. From the beginning, there has been a method enabling the EU to police the economies of member states by following the rules that had been laid down for the single currency in the Maastricht Treaty. This was called the Stability and Growth Pact. In 2003, France and Germany had both overspent, and their budget deficits had exceeded the three percent of GDP limit to which they were legally bound.

Whereas the Commission had the power to fine them, the finance ministers – of what was then the 15 eurozone member states – gathered in Brussels and voted the Commission down, essentially letting France and Germany off the hook by deciding not to enforce the rules they had signed-up to and which were designed to protect the stability of the single currency. Some quarters have recently cited this event as one of the first breaches in European policy, and have suggested that Germany has assumed too much power in the wake of this.

The lynchpin nation
If Europe chooses to interpret Germany as an increasing global power that should be checked, then it only needs to look to its abstinence in the Libyan crisis, and should draw comfort from » its lack of interest in non-European conflicts, along with likes of Brazil, Russia, India and China, all of which have abstained from aggressive UN  resolutions since 1973. As is the case with these undoubtedly powerful nations, Germany is not willing to deploy its military.

But despite its criticisms, Germany remains a crucial partner, whether Europe likes it or not. The EU needs to realise quickly that Germany faces a period of great uncertainty, is looking for international partners, and will be open and susceptible to external influences. This is an opportunity for increased interaction and conversation between Germany, its mainland European neighbours, and – perhaps crucially – the UK.

What many EU nations fail to realise is that Germany is, on the whole, sceptical of the EU, and increasingly this discord is forcing the power from the hands of civil servants and political theorists, and back into the proletariat. Essentially, the German people have a number of questions that remain unanswered, and these will be decided by votes of the majority, and this could have a dramatic effect on Germany’s position on the EU over the next decade.

Therefore, it is important to separate Euro scepticism from the realist perspective, both in Germany and in the rest of Europe. In the case of the Euro zone crisis, despite its growing appetite for ‘Euroscepticism’, in the short term it would make little sense for Germany to allow faltering Eurozone economies to default, and to remove itself from the single currency and the overall project of saving the euro.

While many EU nations do not approve of the idea of an EU led by Germany, the EU itself simply could not survive without Germany, and the determination of the German government to save it. For many Conservatives in the UK such a collapse may be desirable politically, but it remains inescapable that such an event would signal the beginning of an economic disaster within the EU.

Looking at the issue from a UK perspective, in the medium term, if the UK can retain much of its sovereign power with limited fiscal responsibility in Europe, whilst Germany continues to underwrite the eurozone, this should be viewed as a beneficial compromise, and one which should be accepted in order to survive the current economic turmoil.

In the long term, the EU should aim to work closely with Germany, as this strategy will be invaluable in ensuring that when the eurozone emerges from the current crisis, a more realistic, and economically-driven EU, emerges, as opposed to the current political and bureaucratic that the EU is subject to today.

One of the world’s most powerful nations sits patiently at the centre of the eurozone, as both the chief architect and financier of the single currency.

For Germany, the leadership of the EU goes beyond the survival of the eurozone, but  also examines its own foreign policy for the last two decades.

Leader of the pack
It cannot be denied that Germany today certainly holds the purse strings.

But this is status is not by pure fluke – it is down to its own austerity measures and prudence. Since the introduction of the Euro, Germany has had the lowest rate of inflation among the major countries, followed closely by France. The highest inflation rates have been in Greece and Spain. While these inflation differentials are not huge, they are large enough to strain a system of fixed exchange rates.

Furthermore, when it comes to productivity, Germany has clearly pulled away from the pack. Partly because of its reforms of its labour market over the last decade, but also because it has been Europe’s powerhouse economy for many decades – achieving vastly higher productivity growth than its neighbours.

As an illustration of this, since 2000, German unit labour costs have risen about 20-30 percent less than unit labour costs in the other EU countries. That gap has left Germany with a large intra-Europe trade surplus. In contrast to this, most other EU nations run at a deficit.  The German economy today is the result of very well organised and structured set of policies. Germany has a pivotal influence on the finance and regulation of Europe, strong as it is on issues of global trade and manufacturing.

Germany is solely responsible for managing the European financial crisis, yet it has been highly reluctant to interfere in global situations.

Both the German government and the voters are very much aware of its strength, and appear to be growing sceptical weary of spending taxpayers’ money on bailing out Greece – or indeed of staying in the EU at all. In a recent opinion poll, 46 percent of Germans believed that Germany would be better off without the EU.

Today, Germany knows that its power will continue to derive from soft institutional structures and economic strength, as opposed to an aggressive foreign policy. What the EU nations should recognise, however, is that its current economic clout is focused on the continuation of the EU as a common economic structure.

Having said that, the German authorities are not ignoring public opinion. And that opinion is, on the whole, that the underwriting the rest of Europe’s fiscal and financial woes is a step too far. But Germany, even in hearing the sentiment of its own people, remains dedicated to the European Union. Indeed, Merkel, has recently acknowledged the growing unrest amongst her own electorate, recently addressed public concern by assuring voters that every country is responsible for its own debts.
But Germany still stands as the nation at the forefront to assuage the EU’s financial issues. If the eurozone fails, Germany will need to again restructure its economy and re-define itself on the world stage. If it bears the brunt of the storm it will sit at the heart of one of the most powerful economic bodies in the world.

The long haul
European financial analysts are waiting for the supposed inevitable collapse of the eurozone. They may see this as the end to the continuing woes of the global recession; economic analysts may yet have to wait as Germany’s resolve to see the continuation of the EU seems unerring.

Historically, the EU itself was born out of a great crisis, long before the notion of a unified Europe was conceived. In this vein of achievement and continuation, Germany sees that the crisis within the Eurozone offers the greatest opportunity yet to embed fiscal unity and central control of the European economy within Brussels.

But Germany’s recently-introduced ‘fiscal compact’ plans were largely met with agreement, with 27 of the 29 leaders of the member states accepting the proposals. However, David Cameron’s veto vote cannot have sat comfortably with Germany, and despite reassurance from Angela Merkel that Britain remains a key partner within the Union; the move may be interpreted by many German politicians as another voice of dissent, this time from of the EU’s largest economies.

More than twenty years after German unification restored national sovereignty, Germany remains uncertain of its role within the EU.

Accordingly, some German analysts fear that if the country finds itself both dominant and disliked, it could abandon its pivotal commitment to the EU. It should come as no surprise, therefore, that Germany is reluctant to assume the natural mantle of the leader of the pack.

Earthly powers

Posted on by Ben Debski

Old-style colonialism may have withered on the vine after the British and French wound down their respective empires in the 1950’s and 60’s, but colonialism itself – aided and abetted by globalisation – never truly went away. Nowadays, there’s an updated template with Africa once again finding itself in the firing line.

It’s called ‘land grabbing’, or, as some would prefer to describe it, “investing in a smaller country to help it sustain growth.” Whatever description one chooses to use, large-scale acquisitions and the leasing of land in developing countries by outside parties has continued apace in recent years.

The game changer was the world food price crisis of 2007-2008, which resulted in an influx of companies from strong economies that saw the advantage and necessity of buying up foreign (often African) land as a means of boosting their own food production. From a socioeconomic standpoint it’s not difficult to see why the siren call of the so-called ‘land grab’ has gained resonance. This is largely because global food production, according to some estimates, will need to increase 70 percent by 2050 in order to feed the expected nine billion mouths on the planet at that time.

With the cultivation of under-utilised land seen as one solution to the problem it should come as no great surprise that agricultural businesses from food-importing countries have flooded into regions such as Africa to set up farms in a desperate bid to increase their supplies and protect themselves from price volatility in an era of possible climate change.

Who is the typical land grabber?
While transactions can take place between domestic outfits and governments of the target country, foreign investors fit the most common profile. Clients may vary, and would-be land buyers can be anything from transnational companies and governmental bodies, such as sovereign wealth funds, through to individuals and universities. Also active have been private equity funds and pension funds.

But in a major report published in January 2012, the International Land Coalition (ILC), found more evidence of harm than good for developing countries. The ‘Global Commercial Pressures on Land Research Project’ – incorporating a total of 27 case studies, thematic studies and regional overviews – included the latest data from the extensive and ongoing Land Matrix project.

Begun as a collaborative effort by a number of organisations back in 2009, the Land Matrix project monitors large-scale land transactions and (for purposes of the ILC report ) covers land deals from 2000-2010. Those deals, amounting to 203 million hectares of land in total, equate to a vast area that is comparable to the size of North West Europe.

The ILC meanwhile is a global alliance of civil society and intergovernmental organisations working together to promote secure and equitable access to (and control over) land for the rural poor. Since its founding in 1995, it has grown to encompass 81 organisations in 40 countries. These include the UN and Bretton-Woods institutions, multilateral organisations, producer and farmer organisations, research institutes, trade unions, NGOs and community-based organisations.

Of the publicly reported deals in the ILC study, 948 land acquisitions totalling 134m hectares (or 66 percent of the global total) are located in Africa, of which 34m hectares have been cross-referenced.

“Cross-referenced” data refer to deals referenced from multiple sources – the cross referencing process involving an assessment of the reliability of the source of the information, triangulation with other information sources – and, if necessary, confirming the numbers with in-country partners in the networks of the Land Matrix partners.

By contrast 43m hectares were sold in Asia (29m hectares cross referenced); while in Latin America 19m hectares were offloaded (6m hectares cross-referenced). The remainder (5.4m hectares reported, 1.6m hectares cross-referenced) were in other regions, notably Eastern Europe and Oceania.

The report notes that this pattern of distribution may reflect the strong media interest in African deals, as much as real-world differences in the volumes of transactions. For example, some food-importing African countries such as Ethiopia that are or were major recipients of food aid have attracted extensive media reporting, while anecdotal evidence suggests there has also been strong acquisitive interest in Australia, New Zealand, and North America.

The report cautions that acquisitions in OECD countries are generally not reflected in the data, as private transactions between one commercial user and another that do not involve a conversion of tenure system or away from smallholder production, are not included in the Land Matrix project.

Crucially, though, the high levels of interest in acquiring land in Africa, for example, appear to be driven by a perception that large tracts of land can be acquired from governments with little or no payment – and for good reason – with most of the world’s rural poor having historically lived with insecure tenure over resources. While traditionally there have been few significant threats regarding continued access to such resources, lack of legal entitlement to them has become increasingly problematical. This has occurred as outside governments and commercial organisations increasingly look for alternative methods of getting food to their own people.

Consequently, rural land users now face the realistic prospect of dispossession in many cases. As the report states, when the term “land grabbing” is used, it follows a formula agreed by ILC members in the Tirana Declaration of May 2011, in which it was defined as acquisitions or concessions that are one or more of the » following: (i) In violation of human rights, particularly the equal rights of women; (ii) not based on free, prior and informed consent of the affected land-users; (iii) not based on a thorough assessment, or are in disregard of social, economic and environmental impacts, including the way they are gendered; (iv) not based on transparent contracts that specify clear and binding commitments about activities, employment and benefits sharing and; (v) not based on effective democratic planning, independent oversight and meaningful participation.

Africa at the core of the land grab
With Africa at the centre of the land grabbing sphere a significant chunk of deals have unsurprisingly already been struck – with Ethiopia, Sudan, Tanzania, Zambia and Sierra Leone featuring prominently.

The Ethiopian government has freely courted foreign investment and its offer has been embraced by a number of countries, including China, Saudi Arabia and India. Dramatic stories surrounding land lease in the country have circulated in the media for some time. In 2010, The BBC reported that the government of Meles Zenawi was pioneering the lease of three million hectares of land; an area the size of Belgium. One local man, speaking on condition of anonymity told BBC reporters at the time: “You cannot speak freely about the land issue now.”

Against this backdrop the Saudis have indicated they are hoping to produce as much as one million tonnes of rice per year, most of which will be used for the domestic market.

Indeed, a deal struck by Sheikh Mohammed al-Amoudi, one of the world’s 50 richest men, attracted particular attention. He is set to invest $2.5bn by 2020 developing a rice-farming project in Ethiopia via his food company, Saudi Star Agricultural Development plc.

To realise his ambitious plan, al-Amoudi has leased 10,000 hectares (24,711 acres) in the country’s western region of Gambella. The contract runs for 60 years at a cost of 158 birr ($9.42) per hectare annually. He is reportedly looking to rent an additional 290,000 hectares from the government.

“There is lots of land in Ethiopia, especially in the lowland areas,” said Haile Assegide, CEO of Saudi Star, in a recent Bloomberg interview.  “So, if you develop this lowland area and help make Ethiopia self-sufficient in food, I see no real problem.”

Abera Deressa, the government minister who in part orchestrated the agricultural development policy opening up land leasing, says foreign investors have been brought in to boost agricultural output by as much as 40 percent. Deressa has however stressed that the rural situation in some parts of Ethiopia has to be updated.

“Pastoralists have enough land for their cattle,” he told the BBC. “But at the end of the day we are not really appreciating pastoralists remaining as they are. We have to improve their livelihood by creating job opportunities.  “Pastoralism, as it is, isn’t sustainable. We want to change the environment.” The goal, according to Deressa, is for investors to bring skills and infrastructure to some of the most neglected regions, as well as helping create thousands of jobs for the rural population.

Long-term risks
While there are benefits to the cultivation of crops on foreign land by international units, critics argue the drawbacks far outweigh any advantages. Local farmers, they stress, lose out as they rent their land at cheap rates to foreign investors. The loss is greater still when taking into consideration that a large percentage of people still rely on food aid.
One of the land grabbing sphere’s most ardent critics is the Oakland Institute. The organisation has published a report based on its findings concerning land deals in Ethiopia, Tanzania, South Sudan, Sierra Leone, Mali and Mozambique. It has warned that hedge funds and other foreign firms have acquired worryingly large swathes of African land, often without offering official contracts. It added that some firms obtained land after deals struck with gullible tribal leaders or corrupt government officials.

“The research exposed investors who said it is easy to make a deal – that they could usually get what they wanted in exchange for giving a poor tribal chief a bottle of Johnnie Walker”, said Anuradha Mittal, executive director of the Oakland Institute in an interview.

“When these investors promise progress and jobs to local chiefs it sounds great, but they don’t deliver,” he added.

Allowing commercial operators to consolidate their hold over global food markets, as well as using land for other export commodities, including biofuels, is creating insecurity in the global food system that could potentially be a much bigger threat than terrorism. Meanwhile, Ethiopia’s Agriculture Ministry announced last year that it plans to relocate 45,000 households – amounting to three quarters of the population of Gambella – by mid-2013.

Posing a further threat, according to environmentalists, is that many of the farms established by foreign investors infringe on Ethiopia’s protected game reserves. In Gambella, for instance, most farms are being ear-marked for rice and sugar production, two of the most water-intensive crops around. And likely to impact local wildlife.

World Bank takes the brickbats
In a 2010 report the World Bank found that of 463 projects covering at least 46.6m hectares it monitored between October 2008 and June 2009; 21 percent of these projects were defined as being ‘in operation’ more than half under ‘initial development’ and nearly 70 percent having been ‘approved’.

Critics were quick to charge that the bank’s data was incomplete as it monitored projects in only 14 countries (as opposed to an original proposed 30) and that it was downplaying the level of commercial activity being undertaken.

Others, such as the Oakland Institute, have consistently argued that the Foreign Investment Advisory Service and the Remove Administrative Barriers to Investment programme, both projects of the International Finance Corporation (IFC), the Bank’s private sector arm, have “been working – often behind the scenes – to ensure that African countries reform their land laws and fiscal regimes to make them attractive to foreign investors.”

The Bank swiftly rebuffed these charges saying the IFC had consistently recommended governments implement systematic land regularisation programmes that recognise all forms of tenure, formal and customary, including those of pastoralists, or others with weak formal rights.
A spokesman added that the bank’s concern is that large-scale agricultural investment “does not disadvantage smallholder farmers who depend on the land for their livelihoods.”

Writing for Al Jazeera in June 2011, Joan Baxter, a research fellow at the Oakland Institute, noted that investment promotion agencies acting on behalf of governments were developing and advertising a veritable ‘smorgasbord of incentives not just to attract foreign investment in farmland but also to ensure maximum profits to investors.’

Baxter added these included extremely generous tax holidays for 10 or even 30 years, zero percent duty on imports, and easy access to very large tracts of land, sometimes over 100,000 hectares. “Investors may pay just a couple of dollars per hectare per year for the land, and in Mali, sometimes no land rent at all,” she said.

Also noting that the Sierra Leone Investment and Export Promotion Agency was openly boasting about the extremely low labour rates and flexible labour laws in the country, as well as privileges it accords investors, such as 100 percent foreign ownership in all sectors and full repatriation of profits, dividends and royalties, Baxter said that such giveaways: “cast doubt on claims by African governments, and others trying to defend the land deals, that this kind of “agricultural investment” will solve unemployment, generate revenue for cash-strapped governments, reduce the dependence on aid, and bring economic development.”

One example was a $400 million deal in 2010 between Sierra Leone and Addax Bioenergy of Switzerland – the country’s biggest ever agricultural investment – to produce sugar for bioethanol. In a briefing note the Oakland Institute noted that Martin Bangura, the Member of Parliament (MP) for the area and member of the ruling party, described himself as the “bridge” between his people and the company.  He promised community members that their rice-growing areas, known as the Bolilands would not be used by Addax and urged people to accept the project. Community members subsequently reported to Oakland Institute that they had trusted their MP only to be misled – the bolilands having been drained in late 2010 to begin sugarcane cultivation

Change in the air
While land grabbing has been a worrying general trend, a comforting shift may be imminent. Following findings that some investors have not utililised leased land appropriately, the Ministry of Agriculture in Ethiopia, at the very least, has said it will re-evaluate the current status of land for investment purposes before allowing any further contacts to be signed.

Additional pressure is being applied by the UN’s Food and Agriculture Organization (FAO), which recently confirmed a new set of UN-backed global guidelines on responsible land use had won international consensus – an achievement reached after three years of debate.

The welcome news will see land grabbing regulations tighten while it will also increase food security. In addition, the package will be pushing for equal rights for women in securing title to land, as well as creating transparent record-keeping systems accessible to the rural poor and protecting traditional land rights.

Prior to the guidelines being officially recognised, a voluntary code of conduct was put into place reflecting concerns that powerful economies such as China and the Gulf Arab states had bought up too much land in Africa and Asia.

The code has been set-up to give investors and developers alike clear guidelines on best practices, while at the sane time  providing civil society land rights groups with benchmarks they can use in their work on behalf of rural communities. The voluntary guidelines will play an important part in answering the challenge of ending hunger and assuring the food security of every child, woman and man in an economically, socially and environmentally sustainable way, according to FAO Director. General Jose Graziano da Silva. However, with much still be gained from land acquisitions,  only time will tell if these measures can instigate a lasting and meaningful legacy.

No ordinary horseplay

Posted on by Ben Debski

Affectionately known as the most exciting two minutes in sports, the Kentucky Derby is one of most famous, most prestigious and longest running sporting events in the world. Each year drawing some 150,000 live spectators (and millions more via telecasts), the Derby is probably the world’s best-known horse race. It has also played a focal role in the history of racing in America.

On account of its farming traditions, the bluegrass belt of America has long been known for producing superior racehorses. Horse racing in Kentucky dates all the way back to 1783, when locals would race steeds on Market Street in downtown Louisville. In order to free up city thoroughfares, private tracks were subsequently built on and around local farms to allow for more effective training and racing of colts. The Kentucky Derby itself, however – in addition to the other big-name US horse races that followed – was actually modelled on the great traditions of equine competition in Great Britain and Europe.

The first hurdles
During his travels to the British Isles and the continent in the early 1870s, 26-year-old Colonel Meriwether Lewis Clark, Jr. – grandson to William Clark of Lewis and Clark expedition fame – spent some time visiting the organisers at the Epsom Derby and Grand Prix de Paris races. These most prestigious of the Europe’s horse races had already become part of the fundament of high society across the Atlantic, and Clark saw this pedigree as a way of achieving his dream of bringing high-class horse racing to the US.

Once Clark returned to the States, he set up the Louisville Jockey Club both to showcase Kentucky’s horse breeding industry and to fundraise for the construction of a proper new horse racing facility outside the city. To finance the building of the track – along with a clubhouse, grandstand, porter’s lodge and six stables – Clark sold 320 membership subscriptions to the track at $100 each. The 80 acres of land for the track, located three miles south of downtown, was donated by Clark’s uncles John and Henry Churchill (whence “Churchill Downs”, the name of the track to this day).

The inaugural Derby was raced several years later in May, 1875, when some 10,000 spectators watched 15 thoroughbreds run around a 1.5 mile course. African-American jockey Oliver Lewis rode a chestnut colt named Aristides to victory in 2 minutes 37 3/4 seconds; its owner, Hal Price McGrath, took home a vaunted purse of $2,850.

Over the decades, the track changed hands several times, resulting in a range of improvements and enhancements made to both race and track. A new grandstand was constructed in 1895, complemented by two large twin spires atop the roof – ornaments that have since become the symbol of the Derby itself. This course distance was shortened by 0.25 mile a year later to facilitate horses running in the early spring (the Derby is restricted to 3-year-old horses, meaning a colt only ever has one shot at immortality). In 1908, pari-mutuel machines were installed in the stands and the minimum wager was reduced from $5 to $2.

The 20th Century and beyond
As early as the 1920s, the Derby had become North America’s best-known horse race, drawing top thoroughbreds from all across the country. It spawned other competitions, too: in 1930, sportswriter Charles Hatton coined the term “Triple Crown” to refer to a single horse consecutively running the Derby, the Preakness Stakes in Maryland and the Belmont Stakes in New York. The race was first telecast in 1952, while a “film patrol” was installed two years later in order to allow for semi-instant replays for race officials.

Since then, the financial and wagering sides of the Kentucky Derby has become seriously big business. In 2004, jockeys were allowed to wear corporate advertising logos on their clothing. A year later, award distribution was modified such that horses finishing fifth would receive a share of the purse (previously only the first four finishers did so). Today, Churchill Downs has become a world leader in simulcast wagering and combined betting, with the single day of the Kentucky Derby now taking in as much as $100,000,000. Similar to US sporting events such as the Super Bowl and NCAA basketball, the Derby unites casual fans of sport in general, inspiring otherwise gambling-averse people to bet on horses.

In the days of the original Epsom Derby stakes, large crowds of people would descend on the town from London not just to see the race but to enjoy other entertainment as well – magicians, clowns and minstrels who would occupy the crowds in the fairground. This tradition has since made its way over to the States. For two weeks before the Derby, the city puts on the Kentucky Derby Festival; a series of events that include marathons, balloon and steamboat races and Thunder Over Louisville, which is the largest annual fireworks display in North America.

As with many legendary sporting events, many other Derby traditions have developed over the years. At each final ceremony, for example, the winner is bestowed with a lush garland blanket of 554 red roses – hence the moniker “The Run for the Roses”. Women often appear in long dresses donning large hats, and usually remain the talk of the town for weeks afterwards (the extravagant umbrellas women used to carry, however, have since been outlawed at the track). The highest of high society members and most dapper of spectators tend to occupy the VVIP “Millionaire’s Row” box seats, high up by the spires.

A more casual, down-at-heel crowd, meanwhile, heads for the Infield – the flat, grassy area just inside the track that has mediocre views of the race but sees some serious drinking and partying before, during and afterwards. And the Mint Julep, iced bourbon with mint and sugary syrup, has remained the drink of the race for more than a century.

As a consummate national tradition, the Kentucky Derby has become as American as apple pie and baseball. But the race’s heroes are not just its devoted riders and illustrious spectators. The fastest record thus far is one minute 59 2/5 seconds, set in 1973 by Secretariat, a Triple Crown winner whose hallowed image adorned the covers of Time, Newsweek, and Sports Illustrated.

In polo position

Posted on by Ben Debski

Barbados may not be the immediate choice for a polo playing destination – Argentina, South Africa Brazil – these are countries more used to being saddled with this moniker. Yet, this tiny island is home to no less than four separate polo clubs, hundreds of ponies and dozens of players  – and a polo history dating back to 1884.

It was the most last-minute transatlantic trip I’ve ever taken. A Facebook message on the Thursday afternoon translated into a flight the following morning. The best fun in life is almost always unplanned and completely ad hoc – and this was no exception.

Barbados is, as with most tourist destinations, somewhat contrasting. This place attracts them all; from clumps of lobster-red, overweight Brits, to NYC cap wearing Americans, all the way up to the polo tourists, who jet in for a tournament or two…but more on that later.

Friday nights are fish fry nights at Oistins, on the South Coast. Cue dozens and dozens of little huts selling the most amazing grilled fish; Marlin, Shark, Kingfish, Dorado – all accompanied by a vast stage with incredibly loud music. The best hut is George’s; but with huge, huge queues. My boyfriend left me with a brace of girls and a couple of bottles of rum. Oh, the rum – it has a lot to answer for – especially when I found myself on the stage, the only white girl, dancing merrily away to the reggae beat…the fish was delectable, by the way.

The night was yet young – on to Priva, a club on the West Coast, for a polo party. Some of the best British professionals were there; playing in Barbados is really win/win for them – they get their eye in before the English season starts in May, they escape the dreary March weather, they play golf, go sailing, party hard and get paid to boot. It’s a heady lifestyle, and one that I’ve been lucky enough to live for the last few years.

This weekend was all about the final of the Barbados Open – the most prestigious of all the polo fixtures in Barbados. The final had an extra competitive element – father and son were playing on opposite sides. Sir Charles (Cow) Williams, property magnate and staunch Bajan, was playing against his son, Teddy. Even more extraordinary, Cow will be 80 years old this year. How many sports exist whereby the participants can play against family members, much less continue to play at such an advanced age? This is a unique game.

The grounds have undergone significant investment. Maintaining a polo field to a high standard is expensive and time consuming – and absolutely key. The playing surface has to be many things; smooth, flat, not so hard that the horses get jarred up, not so soft that they cut the surface up when they stop sharply. The ball must run true when hit; not possible on a hard bumpy field or one covered in divots. It must not be slippery; a horse cornering at speed puts tremendous forces down onto a small surface area – if they lose their back feet they fall, and fall hard. Injury to both horse and rider is almost inevitable in that situation – if a car is only as good as its tyres, then a polo pony is only as good as the playing surface.

Fortunately, the island is by and large, free draining limestone. The fields are sanded and irrigated, and the climate favours the grass.

The match was close; the hundreds of spectators and sponsors witnessed a fight to the wire; the teams were incredibly even, and superb performances by Jack Kidd (brother of supermodel Jodie and Barbados resident) and Oli Taylor – both big, strong guys who can hit the ball far and hard. They just had the edge on Cow’s team, winning by a single goal.

Polo isn’t polo without a party. After the final, the rum consumption began in earnest. The Lion’s Castle field, high in the hills looking down to the sea, was a fabulous setting to what was a suitably raucous shindig. Cue much dancing on the bar, players carrying one another around on their shoulders, champagne being drunk (what wasn’t being liberally sprayed all over the other players, guests and the DJ’s Macbook Pro) and then slowly the cars began to leave, leaving little toothless gaps in the hills behind the polo ground, as one by one the rather less than sober drivers made their way home. Hey, it is Barbados.

The following day was spent on a Catamaran – owned by a polo player, of course. The boat had been around the world, at a leisurely pace (seven years) as the owners worked around their business interests and the seasons. Well, who wants to sail a boat in winter? Quite.

Our soujorn was much more sedate. We sailed just with the foresail; gently easing along the west coast, allowing a very different view of the island. The east coast is savage; as it is quite literally the first landmass for the waves to hit all the way from Europe. There would be nothing relaxing about sailing around that side of the island.

We anchored about 200 metres off the beach, facing a little innocuous looking bar called Juju’s. Juju’s, as it happens, does grilled fish, and does it well. We all dived off the Cat and swam ashore – accompanied by Sea Turtles and the odd dreadlocked local aboard a Jetski.  A lazy lunch; Marlin with fried breadfruit, as we dripped saltwater onto the seats. No matter. The bar owner didn’t mind, and neither did we. The swim back was rather less energetic – the Cat never seeming to get any closer. As we discussed the personalities in the polo world, the stories got funnier and more risqué the more champagne we consumed. Back in the marina at Port St Charles, the sun went down on a group of happy Englishmen (and women) drinking rose as the water caressed the hull – but once again, the night wasn’t over.

Jack Kidd had extended an invitation to “pop over” to his family pad – Holders. Thinking there’d be just the three of us and him, I was somewhat taken aback and then stunned into quiet by the sight of 3,000 people sitting in absolute silence listening to English musicians Joe Stilgoe and Hannah Waddingham playing Cole Porter songs, in what can only be described as an enchanted forest. The trees formed a canopy over the crowd; branches lit in soft hues of green, red, blue…the sense of serenity and magic was extraordinary, palpable. Unwittingly, we’d stumbled into the highlight of the Holders Season; the biggest performing arts festival in the West Indies.

This island is full of completely unique experiences; ones that the average tourist will never discover. There is so much to do and see if you immerse yourself into it. Eat street food from the boot of a car, dance on a stage with the locals, watch polo (or play it!), listen to Cole Porter in a forest. A life less ordinary, a path less beaten, means a much richer life with infinitely more rewarding experiences. What are you waiting for?

A tale of two cities

Posted on by Ben Debski

“It seems like a city built on precipices, a perilous city. Great roads rush downhill like rivers in spate. Great buildings rush up like rockets.” When author and journalist GK Chesterton surveyed Edinburgh in 1905 and made his observations, he was looking at a city standing on the verge of greatness. That’s not taking anything away from the Edinburgh he surveyed – the city rang rich with history, the new town was completed, and commerce, culture, art and academia were plentiful – but something was missing.

Great promise
Edinburgh’s great cultural melting pot was not yet fully realised. In a few years the historic and contemporary facets of Edinburgh would fuse in a way that had never been envisaged. They would forge a unique identity, combining history, culture, entertainment and the arts, with a thriving business community and demanding tourist industry. The city would soon be on the cutting-edge, but not just yet.

In 1905 when Chesterton made his comments, a new building was just being completed in the city, a building that embodies the dichotomy of historic and contemporary culture. For over 90 years it was the beating heart of Edinburgh as the headquarters of the Scotsman newspaper.

Today this iconic landmark exists as the five-star Scotsman Hotel, a place where rich history is being preserved and contemporary Edinburgh is embraced. The hotel has a great legacy to live up to and so far it’s doing a remarkably good job.

A gateway between two towns
Take a look at the most panoramic photographs of Edinburgh, and you’re likely to catch a glimpse of The Scotsman Hotel. It resides as an appendage to the famous North Bridge, right next to the Royal Mile and at the base of Arthur’s Seat. Just look for the elegant structure by the bridge with a grand flagpole sitting atop it.

The Scotsman was constructed as part of an early 20th century project to widen the North Bridge connecting the old and new towns. The building, a 190ft tower, rushing up like one of GK Chesterton’s rockets, instantly became home to the then 75-year-old Scotsman Newspaper.

Looking around the hotel, clues are abound as to the building’s past. The famous marble staircase, once pounded up and down by editors rushing to and from the trading room, now takes pride of place as the centrepiece of the hotel.

The elegant wood panelling from the editorial offices remains picturesque and intact. But the crowning glory has to be the marble pillars and balcony located in the hotel’s restaurant, the North Bridge Brasserie.

These original features were once part of the newspaper’s trading floor, a grand, expansive room where advertising was painstakingly haggled over and a variety of big deals made.

Since it’s renovation to a hotel a great amount of refurbishment has obviously taken place. The printing rooms are now a state-of-the-art spa complete with Scotland’s first stainless steel swimming pool, steam room, fully equipped gym and a variety of treatment rooms.

The middle floors, once the editorial offices, are now luxurious suites and individually designed rooms, each quaint, unique and brimming with charm; whilst the pigeon lofts – whose occupants were essential for receiving and distributing the latest news across Scotland – are now a two storey penthouse complete with sauna. Yet despite all of these cosmetics, the hotel has lost none of its character. You can still taste the history today.

And this historical badge of honour is clearly worn by the hotel staff, who are earnestly passionate about working in such an august arena. Not least the resident doorman, who mans his post in what can only be described as a uniquely bright and colourful tartan.

The well turned out Ivor can often be heard enthusiastically answering questions about the hotel’s past, and on occasion, can also be heard proffering a sage “It’s better than having a boring family tartan,” to guests who enquire as to the provenance of his dress.

Serving a unique city
In the late 1940s the fledgling Edinburgh Fringe Festival sprang up, closely followed by the installation of the Royal Edinburgh Military Tattoo and a Hogmanay celebration that got bigger every year.  In the space of 20 years Edinburgh became a cultural melting pot like no other. This brought with it diversity, commerce and tourism on a grand scale – and the city has been a hip, fashionable and a very attractive place to do business ever since. By the 21st century these facets had grown exponentially.

For a few weeks of the year the city becomes the entertainment capital of the world, the rest of the time it is a bustling tourist hub for those seeking historical enlightenment. But at all times, Edinburgh is home to a thriving international business community, which needs to be provided for. As with their attitude towards the contemporary and historic sides of modern Edinburgh, The Scotsman Hotel manages to tread the fine line of successfully catering for both business and leisure clientele seamlessly and with immaculate facilities.

Business, pleasure or both?
Business deals are nothing new to the Scotsman’s bustling North Bridge Brasserie restaurant, back when it was an advertising trading floor it must have seen it all.  Things may not appear as hectic and cut-throat anymore; but the venue is certainly conducive to the high-powered business lunch, with its abundance of marble, towering balcony and private dining areas. The establishment is overseen by executive head chef Paul Hart, an award winning artisan who specialises in traditional Scottish cuisine with a contemporary twist.

Chef Hart is equally at ease catering to the upmarket bistro crowd during the day, as he is supplying exquisite a la carte dining of an evening. He’s also the man behind the extensive menus created for the myriad of conferences, product launches, meetings, weddings and social functions that take place at the hotel.

Since opening its doors in 2001, the hotel has built up a steady reputation as the go-to place for business events in the city; a place where clients and customers get to experience a genuine personal touch. Equipped with eight specialised rooms and areas, including function suites, a luxurious boardroom, drawing room and a private screening room; the hotel is prepared to welcome anything from intimate board meetings, to full on press and product launches.

The jewel in the crown of The Scotsman’s meeting rooms is perhaps their exclusive Screening Room & Cinema. It is the only hotel in the city to have one, and is purpose built for media, product and press launches.

Described as Edinburgh’s “best kept secret” by some, it is also set to play a role in the upcoming Edinburgh Festival.

As well as being the physical gateway between the old and new towns of Edinburgh, the hotel is a reflection of everything the city has to offer; the historic and contemporary; a marriage of business and pleasure, entertainment and commerce. It is a hotel for a 21st century city that has achieved greatness and wants to be greater – it embodies everything Edinburgh stands for.

For further information contact: Tel: (0)131 556 5565; Email:  reservations@thescotsmanhotel.co.uk; www.thescotsmanhotel.co.uk

Bricks and mortar shells

Posted on by Ben Debski

Rewind to December 2010 and there I was, sat in the Red Sea sunshine, sipping a beer and people-watching beside a swanky new marina. Gaps between the blocks of new apartments behind me revealed the fairways of an 18-hole golf course, interspersed with holiday homes and a few luxury hotels. While I wasn’t necessarily experiencing authentic Egypt – it could just as easily have been the Med or Caribbean sparkling in front of me – it was all very civilised.

Just a month after my stay at the resort of El Gouna, a self-sufficient five-star community surrounded by desert 20km north of Hurghada, things in Egypt turned markedly uncivilised, as the country got swept along with the Arab Spring uprisings – and the rest as they say is history.

The footage of the revolution we saw on UK TV was predominantly Cairo, a world – and few hundred miles of desert – away from Red Sea tourist resorts, and the environment I’d experienced a few weeks before.

Intrigued, I emailed a resident English lady, Jenny, I’d met in El Gouna who assured me it was business as usual there, just a lot quieter. Like us in the UK, she and her expat buddies were following events in the “outside” world on the TV. Noticeable effects within the resort included less people, due to foreign holidaymakers opting to stay away from Egypt, and the internet and mobile phone networks were down temporarily. Were her husband and she worried about it or considering leaving? Not a chance.

I doubt that when Jenny and her husband bought in El Gouna in 2007, they ever thought they were buying in a country that three years down the line would be subject to a revolution. I wonder if knowing what was to come would have put them off buying there? Actually, after speaking to Jenny about her experience, I don’t believe it would have done.

There are countless “El Gounas” all over the world, that’s to say self-contained resorts offering Western tourists and holiday homeowners a luxury lifestyle within a protected environment. Jenny’s story brings it home just how detached such resorts can be from the real world. It’s not necessarily a good or bad thing, just a lifestyle option for those who want it.

Many people have been put off buying in Egypt, but look closer to home and similar doubts will be going through anyone tempted by a property purchase in Greece right now. The obvious worry is that Greece could still leave the eurozone – not a welcome prospect for anyone who’s just forked out for a property there in euros.

Then there’s the – unlikely – scenario of the level of civil unrest increasing and spreading – the recent TV footage of Athens and other Greek cities hardly make you want to be there. But actually away from these areas – a bit like El Gouna in Egypt – I’ve a sneaky feeling life on many of the Greek Islands hasn’t changed much, with expat life continuing to revolve around the beach, village market and local taverna.

While the Greek government has increased taxes on property owners as part of its austerity measures, one British property agent on Corfu recently told OGC that supermarket prices are actually dropping there, as the main chains compete for business. She thinks taverna prices will follow suit gradually. On property, she noted: “Property is always comparatively safe, and whilst it is true to say that those already owning here are likely to make a loss if they want to sell now, if they can hold on a bit longer, or if they bought long enough ago to still have the exchange rate on their side, then it needn’t be all doom and gloom.

“There are some superb bargains around as those people who really need to sell realise that they will have to accept a lower price if they want to get their property to move. Greece will always have people wanting to come and live here as it is so lovely.”

Choosing where to buy a second home used to be uncomplicated. You went on holiday somewhere, fell in love with the place, had a look at the local property market and made the decision to buy a home there. You didn’t need to worry about the possibility of the local currency changing, the threat of revolution or your property depreciating in value. However, take a broad view of things and sensible approach to a purchase and not much has changed.

Ask yourself this: would the London riots of August 2011 have put you off buying a second home in the Cotsworlds…?

Richard Way is editor of The Overseas Guides Company and an expert on buying property abroad

The threat of the Karoshi

Posted on by Ben Debski

The stereotype of the Japanese workaholic is as clichéd as that of the tea-drinking Englishman. Tough times and soaring unemployment rates can bring out workaholic tendencies in most, but as it were, there is an engrained Japanese culture dictating longer hours and more effort than most. Alarmingly, karoshi, or, as the word translates, “death from overwork”, reaps about 10,000 victims a year – which is on par with the number of lives claimed by car accidents.

In 1969 the first case of karoshi was reported, when a 29-year-old married man working in the shipping department of Japan’s largest newspaper company suddenly suffered a stroke and died. His tender age and the fact that he hadn’t displayed any previous signs of ill-health established the association between extremely hard work and death; the term karoshi had entered the corporate environment, and so had the threat to fall victim thereof.

Karoshi culture
But it wasn’t until the latter part of the 1980s that public concern became widespread and the word became popularised. The sinister events that triggered the reaction were the sudden passing away of a number of esteemed business executives – all of whom were young and of excellent health prior to their collapse. The symptoms that sent them to an early grave ranged from acute heart failure spurred by high blood pressure to arteriosclerosis and cerebral haemorrhage – conditions known to be induced by stress that are also readily linked with karoshi. To keep track of the increasing problem and run a tally of the victims, the Japanese Ministry of Labour began publishing statistics on the fatal epidemic in 1987.

Capitalising on the sensational nature of the Japanese peculiarity, a range of karoshi-inspired products has surfaced. One such launch is the video game ‘Karoshi Suicide Salaryman’. “In this game many things are not what you’d expect,” reads the game producer’s introduction. “The goal of each level is counter-intuitive: you need to die…There are 50 clever levels and a boss fight at the end. We hope you have fun (killing yourself)!”

To those not at threat, karoshi might seem exotic to the point of entering black comedy territory, but in Japan it is part of everyday life, despite the fact that companies have started to take more responsibility for the health of their staff. “I used to live and work in London, and despite the fact that the city’s competitive company culture pushes staff hard, it can’t be compared to the level experienced in Japan, where work consumes most waking hours, and leisure time is hardly ever enjoyed at all,” says Naoki Shimizu, who works as an art director at an advertising agency in Tokyo.

“A good night’s sleep shouldn’t be taken for granted, and many Japanese men and women try to snatch a moment’s sleep wherever they can, be it on the train or in a coffee shop. The threat of karoshi is ever-present, but it doesn’t stop Japanese workers continuing to work far harder than is healthy.”

The roots Japan’s the extreme work ethic
The reasons behind Japan’s dangerous work ethics are many and can’t be attributed to a single concern. While Japanese corporations certainly advocate a system of long working hours, unpaid overtime and few holidays, the problem also lies within the psyche of the Japanese people, since the national heritage dictates hard work. Indeed, the days of the leisurely Edo Era (1603-1867) are long gone – a period which inspired pleasurable pursuits and long holidays.

The first seed of workoholism was planted during the Meiji Restoration of 1868, a face that brought about a definite shift in attitudes as the nation was encouraged to work hard in order to compete with aggressively advancing western nations. Japan’s unity policy, which was implemented during the American occupation in 1945, saw the nation’s industrious leanings being reinforced further.

Aside from deeply rooted work ethics, another fundamental element that has contributed to the rise of karoshi is the sense of obligation experienced by Japanese employees, since many are offered lifelong contracts. An ever-lasting commitment between employer and staff might seem an ideal arrangement to those living in the west were redundancies are on the increase. But evidently, it can also serve as a curse since such a devoted and paternalistic relationship is prone to bring about high stress levels and other adverse psychological factors associated with the obligation to overwork.

Even though the lifelong contract system was more commonly practised in the past than it is today, it has somehow cemented a sense of unhealthy respect for the employer, while staff expect very little in return, aside from salary. In addition, Japanese workers are said to lack self-interest, which means that they will very rarely fight back if they feel that they’ve been treated unjustly or being pushed too hard.

The medical specifics of karoshi victims are anything but sprawling; several medical studies support ties between high job strain and cardiovascular disease, which often has fatal consequences. The definition of ‘high job strain’ brings together many factors including high production demands, long shifts with plenty of overtime, coupled with minimum levels of control and lack of social support in the workplace. It also appears that karoshi is particularly prevalent at companies in which employees are subject to strenuous mental effort and delivering work to deadlines.

The legacy of Toshitsugu Yagi
Among the high volume of karoshi deaths racked up in the late ‘80s, one case received more attention than any other, namely that of Toshitsugu Yagi. There was nothing particular as such about the details of the 43-year old man’s karoshi fate. In line with most victims, he ended up paying a high price for his devoted diligence to his employer and died in 1987 from a myocardial infarction brought on by an extreme workload and serving very long shifts.

The case rose to prominence primarily since the victim’s widow, Mitsue Yagi, was refused compensation as Japanese Ministry of Labour decided that her husband had not died from occupational sudden death. To support its case, the institution claimed that Yagi had worked hard every day for many years and should therefore have grown used to his situation. A true victim of karoshi, the Ministry of Labour ruled, needed to prove that he or she had been working twice as many hours as compared to the norm one week prior to the point of death to be granted compensation. Yagi’s insurance policy weren’t inclined to offer compensation either, since the company assessed that the claimant’s husband had “only” put in a maximum of four hours overtime a day in the week before he died, a portion of time that didn’t qualify for a claim.

Despite the unsuccessful compensation claim, Yagi didn’t die in vain – as the illogical and unfair treatment of his case caused public outrage and resulted in his being hailed as something of an “eiyu” (hero) in his native Japan. Before his death, Yagi served as a spokesperson for the inhumane working ethics of Japan. Before his death, Yagi published a set of writings which flagged the hazards and cruelty of Japanese office conducts.

Solemnly, and quite desperately, in one of them he wrote:
“Let’s think about slavery, then and now. In the past, slaves were loaded onto slave ships and carried off to the new world. But in some way, aren’t our daily commuter trains packed to over-flowing even more inhumane? And, can’t it be said that today’s armies of corporate workers are in fact slaves in almost every sense of the word? They are bought for money.

Their worth is measured in working hours. They are powerless to defy their superiors. They have little say in the way their wages are decided. And these corporate slaves of today don’t even share the simplest of pleasures that those forced labourers of ages past enjoyed; the right to sit down at the dinner table with their families.”

To shed further light on the state of the nation’s work ethics and the risk associated with it, the Yagi family was featured in a much buzzed about video promoted by The National Defence Council for Victims of Karoshi following Toshitsugu Yagi’s death. The council was set up in 1988 and consults thousands of people a year who struggle to cope under the pressure of their employers. Today they still offer support and can be found online at http://karoshi.jp/english/index.html

New ruling brings justice – but few benefit
A company that has figured a fair deal in karoshi circles is Toyota. One of the most media-friendly cases reported was that of Kenichi Uchino, a 30-year-old Toyota employee who collapsed to his death in 2002.

ellingly, it was 4am when he died, and he was still at work. “The moment when I am happiest is when I can sleep,” the deceased man allegedly said to his wife, Hiroko, only days before he passed away, leaving her and the couple’s two young children behind. Toyota offered its condolences, saying in a statement that it would “monitor the health of its employees”.

While the car manufacturer’s vow appeared feeble, Kenichi Uchino case contributed to the improvement of the working landscape of Japanese employees via another route, and many years after his death. Offering a glimmer of light, on November 30th, 2007, the Nagoya District Court accepted Hiroko Uchino’s claim that her husband had indeed died of overwork at Toyota. Subsequently, the court ordered the government to pay compensation to the Uchino family. The case proved to be a legal landmark and since karoshi is now recognised as a cause of death for which employers can be held responsible, karoshi related compensation claims and lawsuits have increased.

But obtaining compensation is not a straightforward affair –they can only be achieved if the labour inspection office acknowledges that the cause of death was directly related to work. Moreover, the country’s justice system can be sluggish, which tend to deter some claimants.

The issue of claims aside, the most positive outcome of the groundbreaking 2007 ruling put pressure on companies to accept wider responsibility for the health of their staff, and the corporate environment has subsequently improved a little.

Efforts to kerb karoshi
In response to mounting pressure, many Japanese companies are now making an effort to establish a better work-life balance for their employees. Not surprisingly, Toyota has upped its game, and has attempted to limit overtime to 360 hours a year, which amounts to about 30 hours monthly.

Meanwhile, some companies run recorded announcements to urge their staff to go home or take a break at certain times, while firms such as Nissan have introduced telecommuting to ease the burden of employees with children. Taking the overtime issue more seriously still, a string of large corporations have begun operating with days strictly prohibiting overtime, requiring staff to leave the office promptly at 5:30pm.

Despite efforts made by businesses, employees have little choice but to manage their high volume of work, which means that few can take advantage of the new schemes introduced by employers. To duck the new “no overtime” policy, some workers are known to secretly remain in the office, while others opt to take their workload home to finish – homework is so common that it has acquired a designated term, namely furoshiki (cloaked overtime).

While initiatives have been taken by companies to avoid subjecting their staff to the gruesome fate of stress-related death, Japan’s cutthroat working culture is still renowned to be harsher than most. Shaky financial times and changes in Japan’s industrial structure have put further pressure on the businesses- and their staff- to perform. Until the company culture sees an overriding reform, karoshi remains a tangible threat.

An eastern sunset?

Posted on by Ben Debski

Who in their right mind would think that the Far East is in economic decline? It is the region of the world where any sane investor would be looking to invest their funds. China recently announced its expectations of growth for the coming period of 7.5 percent – a pullback from previous years but way ahead of what the Western world is experiencing and expecting over the next few years. So what factors affect economic growth?

The last few years have shown that growth in the levels of debt – government, personal and bank – have had a very significant effect on a given country’s growth. Consumer consumption can be a very important driver but when it is fuelled by cheap credit and the cheaper credit is stopped, consumer generated growth will dry up too.

Governments attempt to fuel growth by increasing the amounts they spend on investment and government services. However, they have to be able to maintain their credibility to keep on borrowing from international markets if expenditure exceeds income. As we have seen, a number of countries have lost economic credibility and as such lost access to third-party funds.

These countries have been forced to introduce austerity measures which in most cases will reduce growth in the short to medium term. Those who address the problem early, such as Ireland, will emerge and start growing again quicker than those who put their head in the sand, such as Greece, which ended up exacerbating the problem so that it will last so much longer.

Ultimately though, it seems that a bank debt crisis has the greatest effect on economic growth and sadly we are in one of those at the moment. A lot of the growth in the first part of this century was fuelled by bank debt which has since gone bad. This means that the banks’ balance sheets become weak and as such the banks stop lending until they have improved the strength of their balance sheet. This means that companies and consumers have less access to funds and as such are unable to expand, which in turn reduces growth.

The maturity of a country can have a major effect on a country’s growth. Could China continue to grow at 7.5 percent per annum if it had the same industrial history as the UK? Clearly not – and the reverse is true in that the UK’s growth is always going to be constrained in its ability to grow at a high rate as its industrial base is already substantial.

What is interesting in China is that its growth has been fuelled by exports and the cheapness of its products due to low labour costs and the buying binge of these products made possible by cheap credit in the Western world.

With the recession in the West, Chinese growth needs to be maintained by its own consumers and by government spend. Chinese consumption is growing but it is government expenditure that is the major influencer at this moment in time. But you do wonder how motorways to nowhere can be built. However, I am confident that the Chinese economy will continue to grow significantly over the next few years, even decades just given the sheer inventiveness and drive of the Chinese people and the need to keep their huge workforce employed.

So what will cause this growth in China and other Far East countries to decline?

Population growth or the lack of it is put forward as the key factor. Given China’s one child per couple policy, the expectation is that the population will start to decline over the next two decades and population growth is a major factor in driving economic growth. As noted, consumer consumption is a key ingredient for an economy and the more people, the more they will consume. Also, the age demographics will change as the average age of the population will also go up reducing consumer expenditure.

So where in the world will enjoy growth? India is an obvious choice where the population continues to grow and where the age spread is very much to the lower end of the average. Turkey is similar with a young and growing population making it a place likely to see increasing economic activity for quite a long time.

So what of the UK, the USA and Europe? Strangely – and certainly not obvious to me at first – is that the UK and the USA are expected to see growing populations. I thought that we had an ageing population less likely to have children and therefore in decline? However, it appears that immigration from primarily Eastern Europe of a younger generation is having a positive effect here in the UK. Similarly, in the USA immigration from South America is changing the dynamics. Europe on the other hand has a declining economy and subsequently, growth could be curtailed.

In the short to medium term, the Far East will continue to grow. In the longer term, it seems that there are better places to be – even though it is difficult for most of us to believe that this is the UK.

Charles Purdy is MD at SmartCurrency Exchange and a European economic commentator

Broadening horizons

Posted on by Ben Debski

Service excellence throughout the travel industry continues to advance year-on-year and the facilities provided by leading hotels, convention centres, airlines and cultural destinations across the world are raising the the bar higher and higher. When it comes to providing for the most discerning traveller, it is an honour for Rizon Jet to have been publicly recognised for its services in the Business Destinations Travel Awards.

Named as Best Fixed Based Operator in the Middle East, 2012, for its stunning VIP Terminal located at Doha International Airport, and voted for by customers and crew, it’s an accolade that marks a fantastic first year for the Rizon Jet Doha terminal, which opened in May 2011 and was officially inaugurated in March 2012.

Built for business
The Doha terminal VIP lounge is designed to accentuate the best of modern Arabic design, sporting a minimalistic approach and generous and airy space throughout. With an opulence and attention to detail that are more than a match for anything offered by even the most exclusive of airline operators, the Doha terminal caters for an international clientele in addition to Middle Eastern families and business travellers.

It boasts the very best in service standards giving customers access to luxurious lounges, business suites, beautiful restrooms and all of the facilities one might expect from a seven-star operator. In addition to this, dressing rooms, along with housekeeping and one-to-one concierge services give the traveller complete comfort with all needs catered for from laundry to personal tailoring. There are also snooze rooms and shower facilities available for crews.

To complement the spacious, integrated FBO’s each have base & line maintenance capability on a range of Bombardier and Hawker types and state-of-the-art hangarage for customers who require long-term parking and care. The facility also offers the PA a full suite of business tools from private floors, comfortable set-aside lounges and dedicated offices and boardroom. These are available to conduct business meetings both before departure and afterwards on return from travel.

Recipe for success
Rizon Jet is unique in being the only Middle East operator to have a luxurious VIP FBO based in the significant international aviation hub of London, Biggin Hill. Offering an unparalleled level of service and facilities, both Doha and Biggin Hill operations have been designed to change the way in which the modern FBO works by introducing innovation and technology to equip customers with everything necessary for their comfort and for enjoying successful business trips. Additionally, Rizon Jet focuses on providing a comprehensive suite of private aviation services ranging from aircraft charter, maintenance and management to aircraft sales and consulting.

Part of Ghanim bin Saad al Saad & Sons Group Holdings (GSSG) and the only independent private jet operator with its own terminal in Qatar, Rizon Jet is uniquely positioned to meet the demand of the burgeoning Gulf market. Moreover, with the company’s engineering capability, Rizon Jet intends to be a key player in providing engineering and maintenance services for the business jet and private aircraft in the gulf region. The company can provide seamless services in the Middle East and Europe through owned facilities in Doha and Biggin Hill.

Due to rapid growth during 2011, especially at the London Biggin Hill terminal, Rizon Jet is now confident of being fully ready for the anticipated increase of business brought in the run up to this summer’s Olympic Games in London. The company has been preparing by increasing capacity to handle anticipated demand and extending the range of aircraft services offered and has begun receiving advance booking requests from customers for the Olympic Games period.

For more information contact: enquiries@rizonjet.com
www.rizonjet.com