Monthly Archives: April 2012

Why ADB is based in Manila

I always wondered how the Asian Development Bank (ADB) got to be located in Manila until I read this article. Incidentally, the person responsible for this, Cornelio Balmaceda is a distant uncle of mine from my mother side as well as the writer.

 

ADB headquarters: Manila, not Tokyo

By: 

Monday, April 30th, 2012

One of the biggest events to be hosted by the Aquino administration is the 45th annual meeting of the Board of Governors of the Asian Development Bank (ADB) from May 2 to May 5 this year. Finance Secretary Cesar Purisima has dubbed the event as the country’s “coming out opportunity to showcase the dividends of good governance and its role in building an economy.”

Perhaps this is an appropriate time to look back and ask some questions: Why was Manila chosen over Tokyo as the permanent site for ADB headquarters? The principal international financial institutions in the world, the International Monetary Fund, and the World Bank, not surprisingly, are located in the United States.

One would think that the ADB would be located in Tokyo in recognition of Japan’s leading economic role in Asia. But it was Manila that got the nod as the site for ADB headquarters.

Who brought about this amazing development that saw the capital of a developing nation chosen as the home of the leading financial institution in this part of the world?

Cornelio Balmaceda was commerce and industry secretary during the administration of President Diosdado Macapagal. In December 1963 at the First Ministerial Conference on Asian Economic Cooperation, Balmaceda was elected chairman of the gathering. On the fourth day of deliberations, the conference adopted a resolution putting forth the principles and objectives of Asian cooperation. The resolution called for the establishment of an Asian Development Bank.

In March 1965, the 31st Economic Commission for Asia and the Far East (ECAFE) session held in Wellington, New Zealand, approved a resolution “to set up a high level consultative committee of experts designated by nine regional member governments, to advise and assist in the formulation of measures for the establishment of the Bank.”

A month later, the Philippine government designated Secretary Balmaceda as the Philippine representative to this nine-nation Consultative Committee. At the opening meeting of the group, he was elected chairman and declared, “It is the considered view of my government that the establishment of a regional bank for Asia and the Far East is one of the most significant and important, if not the most significant and important undertaking, that ECAFE has ever launched during its 18 years of existence. My government is giving its full support and is prepared to cooperate to the fullest extent in bringing about the successful establishment of the proposed Asian Development Bank.”

C.S. Krishna Moorthi, representative of India in the Consultative Committee, had this to say about Balmaceda: “The proposed bank when it comes into being will owe a lot to Mr. Cornelio Balmaceda who has served its cause over the last three years, with zest and with confidence despite earlier hesitation from some countries; we would like to record our warm appreciation of his services to the cause.”

U Nyun, executive secretary of ECAFE, spoke on the work of the Consultative Committee under “the able and distinguished leadership of his Excellency, Secretary Cornelio Balmaceda of the Philippines.” He said, “We are most grateful to the Chairman and members of the Consultative Committee for performing this difficult task and carrying the work forward to the present stage of completion.”

Why Manila?

In an article before the voting was conducted for the site of ADB, Balmaceda explained why he believed that it should be Manila:

“The selection of the location of the headquarters of ADB will be based on the conditions obtaining in the proposed site that are most conducive to the smooth and successful operation of the Bank and the attainment of its objectives.

“This is what the Consultative Committee had in mind when it approved the recommendation of the committee of experts, that the location must meet certain requirements, namely, accessibility, availability of financial institutions, convertibility of local currency, acceptable living conditions, willingness of the host country, and existence of other UN agencies.

“It is not therefore, the amount of subscription that a country can put in that will be considered in determining the location of the Bank, nor the extent of economic development that it has already attained.

“The primary objective of the Bank is to help accelerate the economic development of the developing countries in Asia. To accomplish this, the Bank must not only know the hardships, problems and dreams of these countries, but must also look at these hardships, problems and dreams through the eyes of these countries. The Bank must therefore be located in a developing country.”

The Philippines, led by Balmaceda, waged a relentless campaign among Asian countries to have Manila chosen as the ADB site and was able to get the pledge of support from eight countries: China, Vietnam, Iran, Pakistan, Afghanistan, Ceylon, Malaysia and Thailand.

On Dec. 2, 1965, in the third and final balloting, Manila won by one vote over Tokyo as the permanent site of the Asian Development Bank.

Balmaceda received congratulatory messages from local and foreign government leaders for the work he had done that led to the establishment of the ADB and consequent selection of Manila as the site of the ADB headquarters.

Eugene Black, former president of the World Bank, wrote Balmaceda to express his appreciation “for all that you did to make the Asian Development Bank conference a success.”

Former Justice Roman Ozaeta of the Philippine Bar Association also sent a similar message: “I congratulate you for your excellent performance as Chairman of the Ministerial Conference on Asian Economic Cooperation, and for your signal achievement in securing Manila as the site of the Asian Development Bank. . . . the entire nation owes you a profound debt of gratitude.”

On Dec. 28, 1965, Balmaceda was awarded the Presidential Award of Merit by President  Macapagal. In a handwritten note before leaving the presidency, Macapagal paid tribute to his former Cabinet member, saying: “Your crowning achievement was the establishment of the Asian Development Bank in the Philippines. Posterity will remember you as one of the great administrators in our government and as one of our greatest citizens.”

In May 1966, Takeshi Watanabe, representative of Japan in the Consultative Committee (later elected president of ADB) said: “It is impossible to pay tribute to all who worked very hard on this common endeavor. But I don’t think you have any objection to mention particularly the name of Mr. Cornelio Balmaceda.”

In 1966 under the administration of President Ferdinand Marcos, Balmaceda was appointed special adviser to the president on ADB affairs. He was also elected chairman of the 14-nation Committee on Preparatory Arrangements for the establishment of the ADB. When the ADB went into operation, he was named the Philippines’ first alternate director of the bank.

* * *

Balmaceda passed away 30 years ago in April 1982. Several years later, my cousin Gloria Balmaceda-Gozum published a book “Cornelio Balmaceda—A Legacy of Honor and Integrity.” It contains memoirs, articles and speeches of her father, including accounts of events that led to the establishment of the ADB. She saw her father as “a man who never forgot his beginnings and who treasured his parents and his family. He was a brilliant man, but a humble one who preferred to keep his pride and joy in his achievements to himself.”

Each time I pass by the ADB building in the Ortigas Center, I am reminded of Tata Cornelio and how easily we forget the work of a few good men who place service to country above personal glory.

 

Continuous learning and training is our key to long-term success

The future is coming soon fast if the third industrial revolution is happening now. How we prepare for it is a matter of continuous learning for new skills that will be required.

From the Economist

The third industrial revolution

The digitisation of manufacturing will transform the way goods are made—and change the politics of jobs too

Apr 21st 2012

 

 

THE first industrial revolution began in Britain in the late 18th century, with the mechanisation of the textile industry. Tasks previously done laboriously by hand in hundreds of weavers’ cottages were brought together in a single cotton mill, and the factory was born. The second industrial revolution came in the early 20th century, when Henry Ford mastered the moving assembly line and ushered in the age of mass production. The first two industrial revolutions made people richer and more urban. Now a third revolution is under way. Manufacturing is going digital. As this week’s special report argues, this could change not just business, but much else besides.

A number of remarkable technologies are converging: clever software, novel materials, more dexterous robots, new processes (notably three-dimensional printing) and a whole range of web-based services. The factory of the past was based on cranking out zillions of identical products: Ford famously said that car-buyers could have any colour they liked, as long as it was black. But the cost of producing much smaller batches of a wider variety, with each product tailored precisely to each customer’s whims, is falling. The factory of the future will focus on mass customisation—and may look more like those weavers’ cottages than Ford’s assembly line.

Towards a third dimension

The old way of making things involved taking lots of parts and screwing or welding them together. Now a product can be designed on a computer and “printed” on a 3D printer, which creates a solid object by building up successive layers of material. The digital design can be tweaked with a few mouseclicks. The 3D printer can run unattended, and can make many things which are too complex for a traditional factory to handle. In time, these amazing machines may be able to make almost anything, anywhere—from your garage to an African village.

The applications of 3D printing are especially mind-boggling. Already, hearing aids and high-tech parts of military jets are being printed in customised shapes. The geography of supply chains will change. An engineer working in the middle of a desert who finds he lacks a certain tool no longer has to have it delivered from the nearest city. He can simply download the design and print it. The days when projects ground to a halt for want of a piece of kit, or when customers complained that they could no longer find spare parts for things they had bought, will one day seem quaint.

Other changes are nearly as momentous. New materials are lighter, stronger and more durable than the old ones. Carbon fibre is replacing steel and aluminium in products ranging from aeroplanes to mountain bikes. New techniques let engineers shape objects at a tiny scale. Nanotechnology is giving products enhanced features, such as bandages that help heal cuts, engines that run more efficiently and crockery that cleans more easily. Genetically engineered viruses are being developed to make items such as batteries. And with the internet allowing ever more designers to collaborate on new products, the barriers to entry are falling. Ford needed heaps of capital to build his colossal River Rouge factory; his modern equivalent can start with little besides a laptop and a hunger to invent.

Like all revolutions, this one will be disruptive. Digital technology has already rocked the media and retailing industries, just as cotton mills crushed hand looms and the Model T put farriers out of work. Many people will look at the factories of the future and shudder. They will not be full of grimy machines manned by men in oily overalls. Many will be squeaky clean—and almost deserted. Some carmakers already produce twice as many vehicles per employee as they did only a decade or so ago. Most jobs will not be on the factory floor but in the offices nearby, which will be full of designers, engineers, IT specialists, logistics experts, marketing staff and other professionals. The manufacturing jobs of the future will require more skills. Many dull, repetitive tasks will become obsolete: you no longer need riveters when a product has no rivets.

The revolution will affect not only how things are made, but where. Factories used to move to low-wage countries to curb labour costs. But labour costs are growing less and less important: a $499 first-generation iPad included only about $33 of manufacturing labour, of which the final assembly in China accounted for just $8. Offshore production is increasingly moving back to rich countries not because Chinese wages are rising, but because companies now want to be closer to their customers so that they can respond more quickly to changes in demand. And some products are so sophisticated that it helps to have the people who design them and the people who make them in the same place. The Boston Consulting Group reckons that in areas such as transport, computers, fabricated metals and machinery, 10-30% of the goods that America now imports from China could be made at home by 2020, boosting American output by $20 billion-55 billion a year.

The shock of the new

Consumers will have little difficulty adapting to the new age of better products, swiftly delivered. Governments, however, may find it harder. Their instinct is to protect industries and companies that already exist, not the upstarts that would destroy them. They shower old factories with subsidies and bully bosses who want to move production abroad. They spend billions backing the new technologies which they, in their wisdom, think will prevail. And they cling to a romantic belief that manufacturing is superior to services, let alone finance.

None of this makes sense. The lines between manufacturing and services are blurring. Rolls-Royce no longer sells jet engines; it sells the hours that each engine is actually thrusting an aeroplane through the sky. Governments have always been lousy at picking winners, and they are likely to become more so, as legions of entrepreneurs and tinkerers swap designs online, turn them into products at home and market them globally from a garage. As the revolution rages, governments should stick to the basics: better schools for a skilled workforce, clear rules and a level playing field for enterprises of all kinds. Leave the rest to the revolutionaries.

Governance framework in Australian PPPs far from perfect

This recent news article from the Sydney Morning Herald about the country’s most dominant player in PPPs shows even in a country like Australia the level of governance framework is far from perfect particularly on disclosure and transparency. However, it is good to note there are no reports of improprieties in the selection process.

Taxpayers left in dark over public private partnerships

April 28, 2012

They are the hotshots of structured finance, the corporate overlords of our public hospitals and high-security government buildings, army bases, courthouses and convention centres.

They preside over $10 billion in public assets. They have stormed the world of government privatisations, yet few have heard of John O’Rourke, Ray Wilson and Paul Oppenheim.

The three investment bankers parted way with the Dutch giant ABN Amro in 2004 and set up Plenary Group to invest in, develop and operate privatised assets in partnership with governments.

Just eight years down the track, Plenary has won no fewer than 20 public private partnership (PPP) deals in Australia and Canada.

Their prolific deal-making even thrust O’Rourke and his team into Dealogic’s global top 10 last year for project finance transactions – in the elite company of Exxon and the Russian oil giant Gazprom.

Having whipped the venerable Lend Lease in the beauty parade for the Melbourne Convention Centre mandate in 2009, a $1.4 billion deal, Plenary now finds itself head to head with Lend Lease again in a bidding duel for the new Sydney Convention Centre.

Unlike many of its rivals in the infrastructure space though, Plenary is not listed on a stock exchange where its financial statements are there for all to see, and where it can access public equity.

Although a few entities within its burgeoning corporate empire do disclose, Plenary’s ultimate financial position is unknown. A byzantine maze of companies winds to a cul-de-sac: a private trust controlled by the three Plenary principals and associated entities.

Zero transparency. As one privatisation source told Weekend Business, the use of trusts at the top of corporate structures is a ”massive loophole which promotes a totally opaque disclosure regime and leaves the public [and government] in the dark as to the true financial position of hundreds of high-profile corporate groups. As a result, there is no public disclosure whatsoever of trusts holding billions of dollars of sensitive government PPP assets.”

Plenary itself can hardly be expected to disclose any more than it has. Its chief, O’Rourke, was helpful in providing detailed responses to questions, at least within the remit of his firm’s legal and regulatory obligations.

”We defer to the government,” O’Rourke said this week. ”Each project has its own disclosure regime. [Our reporting] includes full transparency in the way the project is financed.”

The Department of Treasury and Finance and Partnerships Victoria – which look after PPPs – were not so forthcoming. Both were unable to confirm this week if they even had access to the ultimate accounts of Plenary. Some responses to questions, said a spokeswoman, might ”take a few days”.

Transparency however is a serious responsibility of government, particularly in light of such large financial transactions involving public assets.

Like other PPPs, Plenary’s structures are highly leveraged.

The 2011 financial accounts for the Melbourne Convention Centre, owned by Plenary Conventions Pty Ltd, were lodged late last week. They showed such aggressive debt levels that the company was technically insolvent. Its liabilities, that is, exceeded its assets.

This doesn’t mean the Plenary parent company is in financial trouble. As O’Rourke says, infrastructure assets are often highly geared. The convention centre PPP was performing beyond expectations, he said.

Also typical of infrastructure projects, each of Plenary’s projects is housed in its own structure. The debt is project financed, non-recourse, so if one went belly-up it would have no effect on the others.

And so far, Plenary’s record is spotless, well almost. Although some projects have performed better than others, the only failure has been that of the South Wharf Retail project associated with the Melbourne Convention Centre following the collapse of the troubled Austexx DFO Group – one of Plenary’s partners.

Yet this has led to a peculiar situation where the Tax Office is trying to wind up a company which is 100 per cent-owned by Plenary Group on the ”grounds of insolvency” because Plenary is refusing to pay $2.35 million in overdue BAS payments.

The Tax Office action, again deferred by the Federal Court last week, is against Plenary Conventions Tower Pty Ltd and relates to a tax debt of the convention centre hotel and retail business of Plenary Group after the Austexx collapse. It followed the placement of two Plenary Group 25 per cent-owned associates, South Wharf Retail Pty Ltd and South Wharf Tower Pty Ltd, into external administration in November 2011.

”The matter is before the courts and I can’t really comment,” O’Rourke said. Although he did explain that the group had left cash in the vehicle for the tax to be paid but the ”lenders have locked up the funds”.

Given the government had tipped in $370 million for the development of the convention centre, was it suitable to allow Plenary’s related companies to be wound up for not paying tax?

That is now a matter for the courts. ”All of our projects are run by non-recourse stand-alone businesses established to operate and maintain the PPP assets,” a Plenary spokesman, Kelvyn Lavelle, said this week. ”These lodge their financial statements with ASIC and are fully compliant.”

There is no doubt that the failure of Austexx has put some pressure on Plenary, though. O’Rourke said the South Wharf Retail deal had been refinanced by Plenary and its joint venture partner Colonial First State.

”We joined with CFS to buy out Austexx’s interest,” he said. ”Our ownership interest is in a new vehicle which again has project finance specifically secured against the South Wharf asset.”

O’Rourke declined to be drawn into specifics about the increased debt exposure taken on by Plenary Group except to say that it was north of $100 million. A recent press report, unconfirmed, put the figure at $160 million.

Whatever the exposure, it is only relevant to the group’s asset base and capacity to repay. Yet thanks to the poor disclosure regime there is no public information about this.

Given the tax dispute and the fact that the convention centre company is operating under a high-risk capital structure after receiving $370 million of government funding, there is even more reason for full transparency by government of its PPP partner’s accounts. The City of Melbourne might also explain the fate of its $43 million investment in the South Wharf Retail concept.

From the information which is now available, the company at the top of the corporate tree (Plenary Group Pty Ltd) does not reveal its financial position.

A spokeswoman for the Australian Securities & Investments Commission confirmed yesterday that as Plenary Group was the holder of an Australian Financial Services Licence its financial statements did not have to be disclosed, despite its status as a ”large proprietary company”.

Strangely, three of its subsidiary companies lodge their audited accounts with ASIC annually. Plenary Group Pty Ltd certainly seems to qualify as a ”large proprietary company” but it has never lodged, at least visibly. ASIC said that its 2010 accounts had been filed but were not available to the public.

In any case, as O’Rourke said, the real ”game is in the trust”. Plenary Group was merely the corporate trustee. The group’s assets in Canada, he said, were structured along similar lines. Deutsche Bank, which supplies the debt for Plenary Conventions, also has equity.

The important point is how much of the $400 million of debt, which had been arranged by its senior partner in the convention centre project (Austexx), Plenary has guaranteed.

Plenary Group is one of the largest (if not now the largest) participants in the Australian and Canadian PPP markets. Its financial position is of vital interest to Australian and Canadian governments.

Plenary Group Unit Trust effectively owns all its assets and distributes its income to the four individual majority owners and two corporate minority owners.

Some of the largest government PPP assets in Australia and Canada therefore are majority-owned and controlled by four individuals – the founding members of the Plenary Group, Messrs O’Rourke, Oppenheim, Wilson and Ms Cox, who is the widow of the deceased founder Jim Cox.

According to ASIC searches, Plenary Conventions Holdings Pty Ltd (the former 50.1 per cent owner of Plenary Conventions), has recently sold down 39.9 per cent of its shares to the Canadian fund manager CDPQ. This means that the convention centre is now 30.1 per cent owned by Plenary Conventions and 20 per cent owned by CDPQ with the other 49.9 per cent owned by a New Zealand-based institutional investor.

O’Rourke says the equity sales to market professionals are not part of a prudent sell-down to address risk but rather reflect the success of Plenary Group. They are a vote of confidence in the company which owns the convention centre.

Despite their spectacular success, there are now signs of timidity or consolidation. O’Rourke says Plenary will deploy the cash from recent asset sales to expand the group’s interests elsewhere

Read more: http://www.smh.com.au/business/taxpayers-left-in-dark-over-public-private-partnerships-20120427-1xpzi.html#ixzz1tKJ5p1BW

Even in Boom times, jobs are a problem

In Australia, the mining boom is growing the economy so strongly,  finding enough people for the jobs required is a major problem. And while this is a good problem, it is still a problem. A shortcut solution is the FIFO (Fly In, Fly Out) practice where people are flown in from different parts of the country to work for 10 days and fly out again after. These makes them transients even in their workplaces and like the OFWs (Overseas Filipino Workers) develop no roots with their jobs. While OFWs would probably like seeing their families every 2 weeks as compared to 2 years in most cases, the affects on their families is the same. There are other solutions available but they take time and effort to be made available. However, there is a need to do this as the FIFO is not a sustainable business practice.

Managing the structural forces unleashed by the mining boom

27 April 2012
ByIan Harper

Australia’s stark comparative advantage in mining is both a boon and a bane to our economic development. Investment in the mining industry as a share of Australia’s GDP has already reached unprecedented levels and looks set to double in coming years.

The mining industry is almost single-handedly responsible for Australia experiencing close to trend annual growth while the rest of the developed world languishes.

Yet the mining boom unleashes mighty structural forces that bear down on the Australian economy. A strongly appreciating Australian dollar – driven by high commodities prices and strong demand for Australian mineral exports – undermines the competitiveness of non-mining export activities, including manufacturing and services exports, and encourages local consumers to prefer imports over locally-sourced goods and services.

Shortages of skilled labour – in fact, any labour at all – in mining regions drives wages and salaries to stratospheric levels, in turn bidding up prices for accommodation, food and local services. This makes life very difficult for individuals and families who do not benefit directly from inflated incomes and yet also face inflated prices for basic goods and services in regions affected by the mining boom.

Broadly speaking, investment has moved from the south and east of Australia, where most people live and work, to the north and west of the continent, where most of the mineral wealth lies. There is a parallel movement of capital away from low-productivity sectors like manufacturing and retail trade towards high-productivity mining and related services. This is not only to be expected but also welcomed, as Australia struggles with declining average productivity levels.

How we cope with the changing pattern of demand for labour, especially skilled labour, will determine how well we manage the mining boom. Ways must be found simultaneously to meet the needs of the mining sector and to ensure that the non-mining sector realises improvements in efficiency and productivity sufficient to allow it to survive the boom.

Indeed, this is the non-mining sector’s best hope: that productivity levels can be raised so that labour is released to serve the mining industry without harming output levels in the rest of the economy.

It’s not only the economic fabric that is stressed and strained by the booming sector “problem”. Social challenges also arise when investment and jobs move away from where people live and community life is established. One trend is the rapid take-up of “fly in/fly out” (FIFO) employment patterns.

One respondent to a recent Senate inquiry expects FIFO employment to increase six-fold over the next 20 years, while relocation and local recruitment will barely double. FIFO might represent a handy way to avert the cost of relocating workers and their families to remote regions, but it comes at a cost to family relationships and community life more broadly.

It also stymies the broader economic development of the regions blessed – or cursed – with mineral wealth. It is the equivalent at a local level of wholly imported capital and labour working the mines in Africa, leaving local residents with little if anything to show for their “development” apart from higher food prices.

There are numerous alternatives to FIFO as a means of closing the geographic and skills gaps opened up by the mining boom. In a recent report entitled Where’s your next worker?, Deloitte explored 12 alternative strategies for bringing workers to jobs and jobs to workers.

Promoting the use of shared services is clearly one of them. This includes but is not limited to offshoring. “Near-shoring” – that is, accessing shared services providers located interstate within Australia rather than overseas – can often be a more competitive alternative when full account is taken of management costs and cultural differences. Either way, there is a pressing need for productivity improvements in the non-mining sector as there is for services to be supplied to the booming mining sector, and shared services models help to satisfy both needs.

Beyond shared services, there are other ways to augment the supply of skills without moving local workers around so much. Boosting skilled migration must continue as a priority and, in this vein, the government’s recently announced US–Australia Bilateral Employment Initiative is to be welcomed. Here is a way of tapping unemployed or underemployed tradespeople in the United States for short-term employment in Australia, where demand outstrips supply.

Crowd-sourcing” skills is yet another and more innovative solution. Digital communications and social media are in their infancy, yet the potential for tapping expertise over the internet is huge. Australian internet start-up, Kaggle, is just one example of what is possible, where technical problems are thrown to the crowd with little more than the thrill of the challenge offered by way of motivation.

Other solutions include enhancing opportunities for retirees, home-based carers, people with disabilities and indigenous Australians to participate more actively in the paid workforce. In the case of indigenous Australians, at least one of the gaps – the geographic gap – is generally already closed. But others, including skills and disadvantage, still loom large.

More can be done to improve employee engagement as well as re-engineering jobs so that workers are more effective in what they do.

Delivering more and better skilled labour is not just about moving workers around, although this will be part of any solution.

Importantly, measures which improve the productivity of the existing workforce, including at a distance from the workplace, will help resolve the tensions born of our prodigious mineral endowment.

The measure of how successfully we manage the mining boom is how well we respond to the resulting structural pressures placed on labour markets.

Ian Harper is a partner at Deloitte and a director of Deloitte Access Economics Pty Ltd. This formed part of a address Ian gave at the Shared Services & Outsourcing Convention in Melbourne.

Work smarter than working more

In Australia where we are known for the long weekend, more people work work over 40 hours a week. I am not sure in the case of the Philippines but most people would like like to work more largely due to economic reasons and because a lot of them are casual workers (no work, no pay). Most recent studies show too much work is harmful just as too little work. This is where the concept of work-life balance is promoted to prevent this excess. Unfortunately, there was a recent petition made by the large Australian banks to change the existing labour laws to allow flexibility in getting people to work on weekends in this 24/7 environment we now have. While the convenience of having banks open during Saturday mornings has been beneficial to people who normally have roster work, I wonder whether this warrant a wholesale adoption of the practice of getting people to work on weekends. Right now, the current practice already may limit people the opportunity of observing Sunday for family and religious needs.

Stop Working More Than 40 Hours a Week

By GEOFFREY JAMES | April 26, 2012 |

D. Hurst / Alamy

D. HURST / ALAMY

There’s been a flurry of recent coverage praising Sheryl Sandberg, the chief operating officer of Facebook, for leaving the office every day at 5:30 p.m. to be with her kids.  Apparently she’s been doing this for years, but only recently “came out of the closet,” as it were.

What’s insane is that Sandberg felt the need to hide the fact, since there’s a century of research establishing the undeniable fact that working more than 40 hours per week actually decreases productivity.

 

In the early 1900s, Ford Motor ran dozens of tests to discover the optimum work hours for worker productivity.  They discovered that the “sweet spot” is 40 hours a week–and that, while adding another 20 hours provides a minor increase in productivity, that increase only lasts for three to four weeks, and then turns negative.

Anyone who’s spent time in a corporate environment knows that what was true of factory workers a hundred years ago is true of office workers today.  People who put in a solid 40 hours a week get more done than those who regularly work 60 or more hours.

(MORE: Why Companies Should Force Employees to Unplug)

The workaholics (and their profoundly misguided management) may think they’re accomplishing more than the less fanatical worker, but in every case that I’ve personally observed, the long hours result in work that must be scrapped or redone.

Accounting for Burnout

What’s more, people who consistently work long work weeks get burned out and inevitably start having personal problems that get in the way of getting things done.

I remember a guy in one company I worked for who used the number of divorces in his group as a measure of its productivity.  Believe it or not, his top management reportedly considered this a valid metric. What’s ironic (but not surprising) is that the group itself accomplished next to nothing.

In fact, now that I think about it, that’s probably why he had to trot out such an absurd (and, let’s face it, evil) metric.

(MORE: 4 Perks Employees Love)

Proponents of long work weeks often point to the even longer average work weeks in countries like Thailand, Korea, and Pakistan–with the implication that the longer work weeks are creating a competitive advantage.

Europe’s Ban on 50-Hour Weeks

However, the facts don’t bear this out.  In six of the top 10 most competitive countries in the world (Sweden, Finland, Germany, Netherlands, Denmark, and the United Kingdom), it’s illegal to demand more than a 48-hour work week.  You simply don’t see the 50-, 60-, and 70-hour work weeks that have become de rigeur in some parts of the U.S. business world.

If U.S. managers were smart, they’d end this “if you don’t come in on Saturday, don’t bother coming to work on Sunday” idiocy.  If you want employees (salaried or hourly) to get the most done–in the shortest amount of time and on a consistent basis–40 hours a week is just about right.

In other words, nobody should be apologizing for leaving at work at a reasonable hour like 5:30 p.m.  In fact, people should be apologizing if they’re working too long each week–because it’s probably making the team less effective overall.

This post was originally published at Inc.comGeoffrey James‘ “Sales Source” (formerly “Sales Machine” on CBS) is the world’s most-visited sales-oriented blog. His best posts, with many extras, are in his new book: How to Say It: Business to Business Selling@Sales_Source

Read more: http://www.inc.com/geoffrey-james/stop-working-more-than-40-hours-a-week.html#ixzz1tAe9WgHc

What one Filipino can do with his coconuts

Here’s one success story of a Filipino using what is clearly in abundance in the country and maximizing its every use for the benefit of the community.

Pulling Bicol up from poverty with coco fiber ropes

The story of Dr. Justino Arboleda

By: 

Saturday, April 14th, 2012

DR. ARBOLEDA: He pulled Bicol up with coco fiber rope.

In the early 90s, when the then dean of Bicol University’s College of Agriculture, Dr. Justino Arboleda, first heard of a report naming Bicol as the second poorest province in the Philippines, he was incredulous. “I could not believe it! How could Bicol be the second poorest province?” he asked. “We are so rich in coconut trees, the tree of life itself.”

He then continued, “So we conducted our own investigation in the university and to our dismay, we found that the report was correct.” Thus started Dr. Arboleda’s crusade to discover what had caused Bicol’s poverty and, more importantly, how to help alleviate it.

The quest eventually led him to leave his comfortable spot in the academe. He went straight to where these poor people were—the coconut farmers—to be able to give them an alternative means of livelihood by starting his own coconut husk processing company, now known as Coco Technologies Corporation (Cocotech).

“In school, we always hear that the coconut tree is the tree of life, that every part of the tree is useful,” he explains. “But in real life, we do not use every part of the tree. The coconut husk, for instance, is thrown away more than 99 percent of the time. It is considered farm waste—but when you think about it, there are actually so many things you could do with the coconut husk!”

As an agricultural engineering graduate from the Tokyo University, with a master’s and a doctorate degree to boot, Dr. Arboleda certainly knew what he was talking about. All the know-how, he already had. There was just one crucial thing that kept him from turning coco fiber (from coconut husk) into a profitable business venture: funding.

“At that time, nobody believed you could make money from coco fiber,” he says. “Wherever we went, they laughed at us. One banker that we tried to borrow from even scolded me. He says, ‘You in the academe are so full of researches, but you are unwilling to invest your own money into them.’”

With this challenge thrown in his face, Dr. Arboleda decided to do exactly what that banker said he would not do. He took his family’s savings, borrowed what he could from his siblings, and with the P250,000 that he was able to pool, plus the 5-by-10-meter piece of land his in-laws lent him, he started his tiny coco husk processing factory.

Incidentally, for him to be able to focus on the business, Dr. Arboleda also resigned from his dean position in Bicol University. “I knew I would need to be away most of the time to market our products, and I did not want people to say that I continued to receive a salary even when I was not present at the university.”

With his safety net of a fixed income gone, Dr. Arboleda took on consultancy work to support his family’s needs as his business strove to get off the ground. This consultancy sent him to overseas conferences. When it sent him to Germany less than a year after the business started, he took advantage of the opportunity to market his coco fiber products.

He educated his audience on coco fiber’s superior ability to absorb moisture, pressure, sound, and odors. He explained that coco fiber has natural antifungal and antibacterial properties. It is resistant to insects and mold. It could be used to insulate buildings from heat, cold, and sound. Coco fiber doormats ensured that all dirt and water from the streets stayed outside the shiny buildings’ doors. Coco fiber was good for car seat cushions, cat scratching poles, planting materials, even fertilizer. To top it all off, it was affordable, durable, and completely biodegradable.

INSTALLING coconut fiber at Estero De Paco

The Europeans knew a good thing when they saw it. Suddenly, Dr. Arboleda had a huge export market. When he came home, he had to ask his in-laws if he could expand his factory to cover the whole farm. They agreed on a lease price, and the factory grew.

For several years after that, Dr. Arboleda was able to give livelihood to around a thousand households in Bicol. The people who spun his coco fiber ropes, which formed the base of many of his products, earned more money than they ever earned from just farming. Even the children were allowed to help, but only under Dr. Arboleda’s condition that they stayed in school. If the kids dropped out of school, the family was removed from the list of contractors. The families, of course, kept their kids in school. It all worked as it was supposed to.

Then disaster struck. One day, while visitors were at the factory, somebody accidentally dropped a lighted cigarette on a pile of coconut husks. “We are normally very strict against smoking near the factory, but visitors can be a bit hard to monitor,” Dr. Arboleda said. A raging fire resulted, and just like that, the factory was burned to the ground. Fortunately, they were insured, but the damages were not fully covered. The company had to shoulder the rest.

They were able to rebuild. But as luck would have it, just as they were starting to get on their feet again, that once-in-a-lifetime typhoon Reming struck. It was a typhoon Bicol would never forget, for the whole province was devastated.

As for Cocotech, their newly rebuilt factory was flattened. To make matters even worse, the coconut trees in the province were all felled, and there were no coconuts that could be sourced from Bicol for two whole years.

“At that time, I really wanted to give up,” Dr. Arboleda recalls. “But I could not abandon my employees.” And so little by little, they started again. For a time, they outsourced their raw materials from other provinces. It took six years for them to again rebuild their factory—but this time, they made sure the structure was typhoon-proof.

Recently, Dr. Arboleda was able to present his products and his work to President Noynoy Aquino. He showed the president how his erosion-controlling coco nets would allow the government to create longer-lasting ripraps at a fraction of the cost they would incur if they used concrete instead.

The coco nets helped plants grow on the riprap, their roots held the soil tightly, and they prevented landslide not only because the plant roots took in the water but also because the coco fiber nets were highly absorbent.

In fact, Dr. Arboleda’s technology had already been used in earlier years to prevent landslide in the Tagaytay Highlands. His coco nets were also used in the ripraps along the Subic-Clark-Tarlac Expresway (SCTEx). Now, under President Aquino’s directive, they will be used in the Tarlac-Pangasinan-La Union Expressway (TPLEx).

With a project of this magnitude, Dr. Arboleda once again faced his biggest headache: funding. “Our clients take 60 to 90 days to pay us,” he explains, “but our workers need to be paid on the spot.”

Fortunately, this time, Dr. Arboleda found an ally. Steering away from all the institutions that had rejected him in the past, he says, “We presented our case to Plantersbank, and they listened. They were very supportive, and they loaned us the money we needed to pay our workers so that this project could be done.

“I only wish I had met them earlier,” he laughs.

Today, Coco Technologies Corporation has a 7,000 square meter factory in Bicol, plus a separate warehouse in Quezon City. They are exporting products to Europe, Japan, and Canada. They are giving livelihood to around 2,000 households in Bicol.

In addition, they are offering free training to everyone who wants to follow in their footsteps.

“The market out there is huge, there’s plenty for all,” says the Bicolano hero. Indeed, there is life in the coconut tree. But it took one Dr. Arboleda to bring that life to Bicol’s poor.

There will be only one Erap

After Marcos and Cory, the only president with similar strong recall would be Erap. Unlike the first two who are a study of contrasts, one evil and one good, Erap is one clearly for the masses. And despite what has been said of his administration he continues to have the people masses vote. And with that vote in mind, he carries on with his sense of public service at 75 and beyond. This commentary from political analyst Randy David best describes how he continues to live in the ordinary Filipino’s consciousness as one of their own kind helping them in their needs.

The unsinkable Erap

By: 

Thursday, April 19th, 2012

As he marks his 75th birthday today (Thursday), Joseph Ejercito Estrada, the one the masses adoringly call “Erap,” has all the reason to look back at his sturdy political career of 45 years, and say he’s not done yet. No other president, apart from Ramon Magsaysay and Cory Aquino, has been able to retain the loyalty and adulation of the ordinary Filipino as much as Erap has.

Analysts had scoffed at his bid to recapture the presidency in 2010. Yet he landed in second place, garnering nearly the same number of votes that he got in 1998 when he was elected president. The affection that the masses have lavished on him translates into electoral votes not only for himself but also for persons with whom he’s identified, like his wife and son. The constituency he commands is between 9 and 10 million, roughly 25 percent of the national vote.

A recent Pulse Asia survey reports the value of an endorsement given by the nation’s key political leaders in the 2013 senatorial elections. Topping the list of strong endorsers is Vice President Jejomar Binay at 73 percent, followed by President Aquino at 66 percent, and Erap at 51 percent.  This is fascinating, to say the least.

Aquino and Binay were winners in the last election, and Binay himself is touted to be the strongest contender for the presidency in 2016. Erap holds no office and is not even making movies, yet he remains a political heavyweight. The same survey shows that, in contrast, an endorsement from detained former President and now Pampanga Rep. Gloria Macapagal-Arroyo will be a kiss of death for any senatorial candidate. Up to 70 percent of those surveyed said they would reject any candidate she endorses.

What we have here in this remarkable political tableau is a set of personalities representing differing profiles of political leadership in the post-Marcos years.

Cory Aquino, and by extension P-Noy, is the figure of moral leadership. Its constituency cuts across all social classes. Its power resides in its capacity to transcend class disparities so as to project the image of a unified moral community. Its vision is of a nation that can overcome the complex problems posed by corruption in government through the power of personal ethical example. Its approach to the problem of mass poverty owes less to any structural analysis that prescribes redistribution than to the spirit of charity and sharing that leaves the unequal social order untouched. It remains a powerful vision despite its palpable failure to lift the masses from the pit of poverty.

Erap, and now Binay, is the figure of populist leadership. Its constituency comes from the lower “D” and “E” social strata, which roughly correspond to more than half of our people who suffer from chronic economic insecurity and social exclusion. The drawing power of populist leadership resides in its ability to articulate the frustrations and hopes of the underclasses in a deeply hierarchical society. Its preferred vocabulary taps into active class resentments against a profligate ruling oligarchy, even while its own icons may not themselves be paragons of frugal living. Its social vision is that of an inclusive society where no one gets left behind. Yet its choice of programs betrays a fixation with patronage. Its Achilles heel is governance. The populist leader tends ironically to be authoritarian in his approach to governance.

And, lastly, Gloria Macapagal-Arroyo, who rose to the presidency by a fluke. She represents the figure of technocratic leadership, at least during the early years when she seemed content to serve out the remaining term of the duly elected president she replaced after a middle-class-based civilian-military coup ousted him.

Indeed her mandate came from the fact that she was taking over the reins of government from an administration that appeared to be mired in unprofessionalism and lack of appreciation of the urgent challenges of a highly competitive world. Highly educated and politically pedigreed, she traveled extensively and projected herself abroad as the modernist leader of an emerging economy who understood the long-term requirements of governance and sustainable development. Alas, all her pretensions to modernity collapsed when, in the face of recurrent challenges to her legitimacy, she sought refuge in the well-trodden path of a transactional presidency.

Had GMA remained committed to the project of a modern state, building institutions while ignoring personal influence, and promoting economic sectors that are not the preserve of feudal privilege, she would have blazed a wide path for a new generation of reform-minded politicians. Her ignominious record as president has only made it even more difficult for educated leaders with a modern outlook to be trusted by the electorate.

On the other hand, the rise of Binay—who gained enormous popularity from his association with Cory Aquino and Erap Estrada—shows that Philippine politics remains riveted to the alternating impulses of moralism and populism. No one would have thought this possible in 2001, after Erap was forced to vacate Malacañang. But, seven years later, in 2008, Cory surprised everyone when she told Erap she was sorry for her role in his removal. She said it was a mistake.

To this day, many have not understood the full import of Cory’s gesture. The way it appeared to me conveyed only one message: Here was the icon of moral leadership bowing to the authority of the people’s will.

Better Telco governance in the Philippines

In a globally competitive world the Philippines needs to get to use all the technology it can get to keep itself competitive if alone catch up. And while the private sector has been able to do its part to enable the country to have this capability, it is equally important the government has to provide the needed efforts to have the governance framework present. Reading this article I get the impression the government regulator does not have the robust and diligent capability to address the many customer complaints present.

One interestingly information I know is in Australia when a stolen or lost mobile is reported, the mobile is immobilized by the Telco operator making it useless by whoever who has possession of it. Such practice does not exist in the Philippines. In February alone 1,862 mobile handset were reported stolen and 8,935 for the entire last year.  At PHP2,500 a handset that’s over PHP22 Million pesos of profits which the government can focus its efforts to deprive this illegal market from having.

From BusinessWorld Philippines

April 23, 2012

Poor Internet connection, billing top customer complaints in 2011

CUSTOMER COMPLAINTS on poor Internet connection and billing rose by more than a half last year, according to data from the National Telecommunications Commission (NTC), a situation attributed by service providers to a surge in demand.

In its one-stop public assistance complaint report sent yesterday, the regulator said under the “other complaints” category, 50% comprised poor broadband network connection and 42% were disputed billing charges.

There were 1,199 complaints last year, it added, up by 43.1% from 783 in 2010.

The data also showed that other complaints reported as of February stood at 210. Comparative data were not available.

Sought for comment, Ramon R. Isberto, spokesperson of Philippine Long Distance Telephone Co., (PLDT), said the complexity of broadband service amid a spike in subscriber growth has contributed to the rise in Internet connection-related complaints.

“You should note that broadband subscribers have grown sharply,” Mr. Isberto said in a text message.

“Also, this is a more complex service — you have to deal not only with connectivity but also with customer devices like computers, laptops, and smartphones that are more complicated than legacy handsets,” he added.

For her part, Yolanda C. Crisanto, Globe Telecom, Inc. head for corporate communication, echoed Mr. Isberto’s sentiments.

“The changing market dynamics especially the increased usage of mobile data through smartphones will impact the back-end system that existing players are using,” she said in a separate text message.

“Today’s customers have better access to sophisticated services with the influx of smartphones, tablets and other devices,” Ms. Crisanto said.

“The challenge for the players now is to improve our systems that would empower the customers to enjoy the full capacity of their devices.”

The NTC report, on the other hand, showed that complaints of lost cellphones, text scam (fraudulent messages) and text spam (unwarranted messages usually meant for promotions), dipped last year.

Reports of lost or stolen mobile phones stood at 8,935 units, down by 15.5% from 10,574 in the previous year. Data also showed that 1,862 cases of lost or stolen mobile phones have been reported as of February. Comparative figures were not available.

The number of reported text scams also slightly fell to 1,506 from 1,516 in 2010. But as of February, the NTC has received 238 text scam complaints.

Cases of text spamming have realized a heftier reduction by 45.56% to 283 from 520 in 2010, even as the NTC has recorded 50 cases as of February.

“The issued MC (Memorandum Circular) No. 04-07-2009, where content/service providers shall no longer be allowed to send or initiate push messages has influenced the number of 2010 complaints against 2009,” the NTC said.

After the merger of PLDT and Sun Cellular operator Digital Telecommunications Philippines, Inc. (Digitel) last year, PLDT has now 70% of the market share, leaving Globe Telecom with 30%.

Shares of PLDT slid by 0.16% to P2,546 apiece while Globe Telecom rose by 0.63% to P1,100 apiece when the stock market closed yesterday.

Mediaquest Holdings, Inc., a subsidiary of the Beneficial Trust Fund of PLDT, has a minority stake in BusinessWorld. — C. H. C. Venzon

Article location : http://www.bworldonline.com/content.php?Section=Economy&title=Poor Internet connection, billing top customer complaints in 2011&id=50480

Another quiet first technology from Australia

Here is one reason why we need to promote clean energy technology in Australia (and in the Philipppines too) to help make using it to be better and more beneficial the various renewable energy options to meet our power needs.

From CleanTechies.com

Enjoy the Silence: The Quietest Wind Turbine in the World

Published on December 19th, 2011 by EnergyRefuge.com

An Australian company called Renewable Energy Solutions Australia Holdings Ltd. (RESA) has created what it says is a super quiet and efficient wind energyturbine.

Suggestively called Eco Whisper, the wind turbine employs 30 smaller ones capped with a speciallydesigned cowl ring that keeps them silent in most meteorological conditions. A cone shape allows the blades to automatically rotate into the direction of the wind, with no need for a heavy tail structure.

Besides being more silent, the blades are more efficient, too. RESA says the turbines increase efficiency by 30 per cent at average wind speeds, and will keep rotating even when winds are very slow.

Main features:
.20kW horizontal axis wind turbine
.Virtually silent operation
.6.5m blade diameter
.21.1m height
.30 blades extending outwards
.Dynamic slew drive
.Solid, lightweight structure
.High performance in all wind conditions

The manufacturer says EcoWhisper is suitable for commercial, manufacturing and industrial sites, airports, ports, mining resource facilities, council sites and industrial development sites. It can also be installed on shopping centres, industrial parks, schools, universities and others. Off grid rural communities could also benefit.

It sounds like an exciting new development in wind turbine design!

A Global accounting system to count carbon emissions

Reading this article you get the view there is a need for a global accounting system to count the ways countries commit to reduce their carbon emissions to prevent further climate change which is not yet in place. It also puts into question the practice of exporting the polluting practices of developed countries to developing ones thinking this meets the requirement.

 

From TIME Magazine

Cutting Carbon Means More than Fancy Bookkeeping
By BRYAN WALSH Tuesday, Apr. 24, 2012

A pair of coal trains idle on the tracks near Dry Fork Station, a coal-fired power plant near Gillette, Wyo, April 29, 2010.

Matthew Brown / AP

 

You don’t get much greener than Oregon. The Pacific Northwestern state is home to Portland — the capital of American progressivism — and is a leading booster of alternative energy, with laws mandating that the state’s major utilities produce a quarter of their electricity from renewable sources by 2025. In addition, Oregon is blessed with bountiful and carbon-free hydroelectric power, which is one reason its per capita carbon emissions are half that of the national average. Coal power has all but disappeared from Oregon — the state’s last coal-fired power plant, outside the coastal town of Boardman, is set to close by 2020.

But the picture is a little more complicated than that. Even as Boardman is set to shutter its plant, the town is weighing the construction of a huge new coal-export facility, one of several that have been proposed in the Pacific Northwest to help export Powder River Basin coal from Montana and Wyoming to the energy-hungry markets of Asia. If all the proposed ports were to be built, more than 150 million tons of carbon-intensive coal could be exported from the Northwest, nearly 50% more than the U.S.’s coal export total last year. Even as American coal consumption declines to its lowest level since 1986 — thanks to tougher air-pollution regulations and cheap natural gas from shale deposits — we could end up sending more of the stuff abroad.

(MORE: War on Coal: Why Polluting Plants Are Shutting Down Nationwide)

That’s the dirty secret of cutting carbon. Oregon — and America — may be getting off coal, but if it just ends up being burned elsewhere, the climate won’t be any better off. According to an analysis released this month by the Breakthrough Institute (BTI) — a nonpartisan think tank — many developed countries that appear to be reducing their greenhouse-gas emissions may be playing this same bookkeeping game, essentially relocating their carbon footprint to other nations in the form of outsourced manufacturing or exported fuel. To put it more bluntly, they’re cheating — and the rest of the world is paying the price.

Balancing carbon output and economic growth is a hard thing to do. The goal in any decarbonization effort is to reduce the quantity of CO2 that’s emitted for every unit of economic output generated. The world needs to decarbonize at the rate of about 4% a year until 2050 in order to keep atmospheric carbon concentration at the 450-parts-per-million level that scientists broadly agree is required to prevent serious climate change.

(VIDEO: Climate Central: Taking the Carbon Out of Coal)

BTI analyzed energy data from 1971 to 2006, drawn from 26 developed countries, and found that we’re nowhere near that magic 4%. The annual decarbonization rate has been about 1.3% since the 1980s, and only a handful of countries have been close to 4%. That group includes Sweden, which has decarbonized at 3.6% a year, mostly by replacing oil-burning power plants with nuclear and hydro after the oil shocks of the 1970s. France has managed to decarbonize at 2.8% a year by following a similar route, phasing out oil power in favor of state-sponsored nuclear and hydro.

France and Sweden are not alone in the decarbonization points they’re putting on the board. The BTI report shows that Ireland and Britain have managed to decarbonize rapidly too — at 3.2% and 2.8% a year respectively. But in both those cases, the scores have been much more a matter of shifting from carbon-intensive agriculture and manufacturing than of moving to cleaner power. Manufacturing as a share of British GDP declined from 28% in 1971 to 11% in 2006, more than double the average decline in the other nations that are part of the 34-member Organisation for Economic Cooperation and Development. Imports as a share of British GDP rose from 21% in 1971 to 30% in 2000 — but the carbon created by those imported goods and services is off the U.K.’s books.

(MORE: Climate Rules: Why Natural Gas Will Be the Big Winner in New Greenhouse-Gas Regulations)

Globally, this kind of faux greening has taken a toll. According to a 2011 study in the Proceedings of the National Academy of Sciences, outsourced emissions have essentially canceled out any carbon reductions made under the Kyoto Protocol. That means we’re doing even less than we think — and no one thinks we’re doing that much to begin with.

The lesson of the BTI report is that climate action has to be global, which means — sooner rather than later — emissions will also have to fall in large developing nations like India and China. That won’t be easy, though the examples of countries like France and Sweden show that it can be done if we really choose to. It also means we need to do everything we can to keep polluting fuel like coal in the ground, not exported to countries that have weaker environmental standards and dirtier industries. As for Oregon, if it wants to keep being green, it needs to help a world that’s still hooked on coal — not act as a dealer.

Read more: http://www.time.com/time/health/article/0,8599,2112907,00.html#ixzz1t0HrLPhM

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