Rankings and levers

October 12, 2008

Newspapers have been quoting the survey by the World Economic Forum in which business leaders have been rating the solvency of world banks.

The rankings however were compiled just before the recent £50 billion bail-out by the UK, the nationalisation of the Icelandic banks and the larger US bail-out.

The website has the co-authors interviewed from the 3rd to the 7th of October. The report itself was published on the 8th October.

RANKINGS

1. Canada

2. Sweden

3. Luxembourg

4. Australia

5. Denmark

6. Netherlands

7. Belgium

8. New Zealand

9. Ireland

10. Malta

11. Hong Kong

12. Finland

13. Singapore

14. Norway

15. South Africa

16. Switzerland

17. Namibia

18. Chile

19. France

20. Spain

21. Barbados

22. Bahrain

23. Slovak Republic

24. Brazil

25. Estonia

26. Austria

27. Panama

28. Mauritius

29. Kuwait

30. Qatar

31. United Arab Emirates

32. Trinidad and Tobago

33. Senegal

34. Israel

35. Portugal

36. Iceland

37. Cyprus

38. Botswana

39. Germany

40. United States

41. Lithuania

42. Peru

43. El Salvador

44. United Kingdom

45. Greece

46. Benin

47. Costa Rica

48. Malawi

49. Guyana

50. Malaysia

51. India

52. Puerto Rico

53. The Gambia

54. Montenegro

55. Mexico

56. Croatia

57. Czech Republic

58. Jordan

59. Ghana

60. Suriname

61. Brunei Darussalam

62. Latvia

63. Saudi Arabia

64. Kenya

65. Jamaica

66. Honduras

67. Zambia

68. Burkina Faso

69. Slovenia

70. Sri Lanka

71. Pakistan

72. Philippines

73. Republic of Korea

74. Romania

75. Thailand

76. Madagascar

77. Colombia

78. Cote d’Ivoire

79. Italy

80. Bulgaria

81. Hungary

82. Cameroon

83. Georgia

84. Oman

85. Tunisia

86. Paraguay

87. Nigeria

88. Armenia

89. Morocco

90. Dominican Republic

91. Bolivia

92. Malia

93. Japan

94. Tanzania

95. Moldova

96. Bosnia and Herzegovina

97. Poland

98. Nicaragua

99. Venezuela

100. Uruguay

101. Guatemala

102. FYR Macedonia

103. Syria

104. Albania

105. Nepal

106. Mozambique

107. Russian Federation

108. China

109. Uganda

110. Serbia

111. Egypt

112. Ukraine

113. Vietnam

114. Turkey

115. Bangladesh

116. Azerbaijan

117. Taiwan, China

118. Ecuador

119. Mauritania

120. Mongolia

121. Indonesia

122. Zimbabwe

123. Tajikistan

124. Kazakhstan

125. Cambodia

126. Burundi

127. Chad

128. Ethiopia

129. Argentina

130. East Timor

131. Kyrgyz Republic

132. Lesotho

133. Libya

134. Algeria

Yes. That’s right.

The UK lies behind Peru and El Salvador.

Now given this report was a survey of the world’s economists whose advice our banks were no doubt taking; should we believe it?

Are the UK’s banks really behind Peru, El Salvador and Senegal?

Or is it an accurate representation that is slightly out of date, compiled as it was slightly before the bail-outs?

That must depend on whether you believe the bail-outs will work.

If reports are to be believed the Royal Bank of Scotland is next in line to be nationalised tomorrow. If that happens then there will be further pressure on the remaining UK bank’s to be nationalised too. The banking sector could be picked off one by one by the market and the taxpayer forced to pick up the tab.

On that Iain Dale post there have already been comments about the English taxpayer bailing out the Scottish bank.

It must be a pity, to all those who carp, that Scotland is not already independent.

An independent Scotland with a similar oil fund like our neighbour Norway could be similarly insulated from these turbulent times.

It would also have the economic levers to maintain its economy best, not just for the South-East of England as remains the case today. Remember Eddie George, the former Governor of the Bank of England: Unemployment in the north is a price worth paying for affluence in the South!

Although the credit crunch is global, take a look back at those rankings.

Sweden, Luxembourg, Denmark, Belgium, Netherlands. All small countries lying in the top 10.

Even Ireland, who have recently guaranteed all deposits in their banks, are sitting 9th.

The argument that Scotland is too small to be financially unstable is farcical! I don’t hear anyone saying that Denmark is too small and should be run from Berlin. (Not since the days of Adolf Hitler and the Second World War anyway!)

As countries large and small struggle with the credit credit crunch from the U.S. and Russia down to Iceland with its 300 000 population, this population argument of independence must be seen to be invalid. Iceland, with a population slightly smaller than North Lanarkshire, isn’t exactly Miramont Gardens in Pimlico!

Passport to Pimlico

What matters now is that we take the right decisions to get out this mess.

Those decisions may be different for each country. They may even be different for England, Scotland, Wales and Northern Ireland.

That’s why its important key economic levers are devolved away from Westminster.

Otherwise the Eddie George syndrome will hamper ‘the North’ recovering for years.

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Georgia and the oil hungry Crocodile

August 10, 2008

In my last post I suggested that it wouldn’t be in Russia’s best interests in the region if South Ossetia was independent.

Paradoxically though they are right behind the South Ossetians in their bid for independence.

Its not really a genuine wish for their self determination. A genuine South Ossetian state that wasn’t pro-Moscow like Georgia would be another nightmare for Russia, opening up tensions in its own ethnic Caucaus regions.

Its nothing more than the old divide and conquer strategy.

That’s why the Abkhazia and Ajaria independence movements are also sponspored by Russia. Purely to destabilise Georgia, nothing less.

If it was only about South Ossetia then why are Russian planes bombing Georgian cities? Military tactics or an excuse to bring Georgia to its knees?

Russia does not like Georgia’s pro-Western stance. Their attempt to join NATO.

Georgia is seen as the epitome of an former Soviet republic embracing Western philosophy.

The New York Times has this appraisal:

“It’s scarcely clear yet how things will stand between the two when the smoke clears. But it’s safe to say that while Russia has a massive advantage in firepower, Georgia, an open, free-market, more-or-less-democratic nation that sees itself as a distant outpost of Europe, enjoys a decisive rhetorical and political edge.

In recent conversations there, President Saakashvili compared Georgia to Czechoslovakia in 1938, trusting the West to save it from a ravenous neighbor.

“If Georgia fails,” he said to me darkly two months ago, “it will send a message to everyone that this path doesn’t work.”

During a 10-day visit to Georgia in June, I heard the 1938 analogy again and again, as well as another to 1921, when Bolshevik troops crushed Georgia’s thrilling, and brief, first experiment with liberal rule.”

“You should understand,” Mr. Saakashvili said, mocking the Europeans who urge forbearance on him, “that the crocodile is hungry. Well, from the point of view of someone who wants to keep his own leg, that’s hard to accept.”

The Georgian President’s analogy of Czechoslovakia in 1938 when Hitler invaded – on the pretext of liberating German citizens – was also reinforced by the Swedish Foreign Minister:

“Attempts to apply such a doctrine have plunged Europe into war in the past… And we have reason to remember how Hitler used this very doctrine little more than half a century ago to undermine and attack substantial parts of central Europe,” Bildt said.

“We did not accept military intervention by Milosevic’s Serbia in other Yugoslav states on the grounds of protecting Serbian passport holders,” he added.

Poland and the Baltic States are also on the side of Georgia in the conflict:

“The EU and NATO must take the initiative and stand up against the spread of imperialist and revisionist policy in the east of Europe,” leaders of the four countries said in a joint statement.

“The Russian Federation has overstepped a red-line in keeping the peace and stability in the conflict zone and in protecting Russian citizens outside its own borders,” the statement added.

Again from the New York Times:

“Marshall Goldman, a leading Russia scholar, argues in a recent book that Mr. Putin has established a ‘petrostate,’ in which oil and gas are strategically deployed as punishments, rewards and threats.

The author details the lengths to which Mr. Putin has gone to retain control over the delivery of natural gas from Central Asia to the West.

A proposed alternative pipeline would skirt Russia and run through Georgia, as an oil pipeline now does.

‘If Georgia collapses in turmoil,’ Mr. Goldman notes, ‘investors will not put up the money for a bypass pipeline.’ And so, he concludes, Mr. Putin has done his best to destabilize the Saakashvili regime.”

Already we are seeing problems with the oil supply.

Azerbaijan has now cut off their oil exports through Georgia.

And it is now reported that Russian jets have bombed the main oil pipeline that runs through Georgia to Turkey .

Here’s an old map showing the oil routes in the area. There are two oil pipleines shown in Georgia. The largest oil pipeline (on the map as planned) is now in place and runs straight through to Turkey. Its run by BP and is the one that is reportedly bombed.

Oil routes in Georgia

And wouldn’t Russia like the Georgian oil pipelines in their control!

You have got to feel sympathy for the South Ossetians, their capital Tskhinvali lying in ruins.

I’m reminded of the attributed words of Calgacus, the Pictish warrior, who said of the Romans attempting to invade what is now Scotland:

“They make a desert and call it peace.”


Scottish broadband take-up

June 15, 2008

Scottish broadband take-up is the second highest in the UK at 53 %, behind England at 58 %, marginally ahead of Northern Ireland (52%) and significantly higher than Wales (45%).

Although low by comparison to other countries, this figure accurately reflects Scotland’s low population density in many areas. This is in no small part due to the previous Scottish Executive’s decision to try and push Scotland’s rural broadband infrastructure across to the remote Highlands and islands – a move which would have not been economically viable if left to market forces. Without that Scotland would probably have a broadband take-up comparable to Wales.

Due to the rural broadband push, around two-thirds (67%) of Scotland is connected to an unbundled exchange. This compares with a figure of 84% in England.

Thus the SNP have argued for a final push for broadband connectivity for exchanges. They managed to secure a £3.4 million grant from the European Union to begin this task in April 2008.

Competition Commissioner Neelie Kroes commented: “I am pleased to endorse public funding that will allow residential and business users in Scotland, who still do not have access to affordable broadband services, to reap the full benefits of the knowledge-based economy.”

Hopefully with this initiative, broadband will reach Scotland’s remotest communities.

The effort taken by the previous Executive and the new Scottish Government means that the Highlands and Island have a broadband take-up at 62%; higher than the average broadband takeup in England. In rural areas of Scotland overall, the figure (59%) was comparable to England’s average.

The main cities of Scotland:- Aberdeen, Dundee, Edinburgh and Glasgow showed variation. Three: Aberdeen, Dundee and Edinburgh had take-up rates of 62 – 64 %. Glasgow showed a take-up rate of only 32 % – that is a rate only slighly better than the Czech Republic (30 %) and other Eastern European countries in the recent ITIF report.

The Ofcom report explains the discrepancy by pointing out that only 44 % of Glasgow households own a laptop or PC, compared to a Scottish average of 64 %, and by low household incomes.

The Glasgow figure does not look like catching up with the rest of Scotland. Of those who do not have broadband in urban Scotland (48 % of the population) only 15 % said they were certain or fairly likely to get broadband in 2009. That would raise the Scottish urban take-up from 52 % in 2008 to 59 % in 2009.

If the same 15 % figure was applied to Glasgow its take-up would rise to 42 %, pretty much everyone who currently owns a PC in the city – so I’d suggest that the 15 % figure would be lower in Glasgow too. I don’t think we’ll see a glut of people in Glasgow buying PCs next year so that the 42 % will be reached.

We can see from this the low take-up rate in Glasgow is skewing Scotland’s broadband figures as a whole.

Take out the Glasgow figures and the Scottish broadband take-up rate would be about 62 %.

That is higher than anywhere else in the UK, and higher than Australia, and beginning to catch on Canada.

Its clear that Glasgow’s Eastern European-like broadband take-up rate is affecting our country.

Perhaps it’s not only the rural broadband push that we need to consider. Would the European Union give a grant for Glasgow?

That’s a sobering thought since Glasgow is hosting a major sporting event in 2014.

Lets look at the World leader in Broadband take-up, South Korea (93 %). Perhaps they can teach us lessons.

South Korea has put broadband in every residential and office block in the country. Large residential and office blocks have had fibre connections since 1997.

The speed of the broadband connections remain the fastest in the world. That has meant that the online gaming industry has exploded in growth in South Korea. Many gamers from around the world have settled in the country for that reason.

With this broadband backbone, South Korea is now the 13th richest country in the world by GDP. Its economy is the 4th largest in Asia.

At the start of the 21st century, the South Korean Government began a National IT project. It is now the world’s leading IT nation. It now has plans to become the world leader in robotics, and seeks to put a robot in every South Korean home by 2020.

By comparison Glasgow’s plans; putting wifi in Glasgow’s Underground trains and regular trains to Edinburgh – are just tinkering around the edges.

Until radical policies address the social problems of Glasgow, and housing is built with broadband as standard; Scotland will continue to lag on the IT superhighway hard shoulder.

The song was ‘Glasgow belongs to me.’ Without Broadband to open up the world’s possibilities that’s all a Glaswegian will get.

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Broadband take-up

June 14, 2008

These are the latest World Broadband ratings by ITIF:-

I’m going to concentrate this blog on the first column. That of broadband penetration; what percent of the countries population has access to broadband internet at home.

A recent Ofcom study found the UK’s figures slightly higher than ITIF, sitting at 57%. I hope this is indeed the case. I’ll use the Ofcom figures as accurate for the UK and the ITIF figures as accurate globally. Where the Ofcom figures match in the case of Belgium and the US, I’ll put the UK behind both countries as a low ranking 57%.

Sorting the ITIF list purely on Broadband takeup we get:-

1. South Korea 93
2. Iceland 83
3. Netherlands 77
4. Denmark 76
5. Switzerland 74
6. Norway 68
7. Canada 65
8. Finland 61
9. Australia 59
10. Belgium 57
11. United States 57
12. United Kingdom 57
13. Luxembourg 56
14. Japan 55
15. Sweden 54
16. France 54
17. Spain 49
18. Germany 47
19. Republic of Ireland 46
20. Austria 45
21. Portugal 44
22. New Zealand 42
23. Italy 41
24. Czech Republic 30
25. Hungary 29
26. Poland 23
27. Turkey 23
28. Slovakia 22
29. Mexico 20
30. Greece 18

I think that broadband takeup is the more relevant figure posted by ITIF. Speed and price are market factors, but the takeup figure roughly shows the percentage of people that use the internet and roughly shows your market audience. (Obviously countries with extremely large populations with lower takeup are not on the list e.g. China, India, Russia.)

Now regular readers might suspect that I’ll be analysing the UK figures in detail, and breaking them down to England, Scotland, Wales and Northern Ireland. They would be right!

As this blog already is on the long side though, I’ll refrain from the compare and contrast – till later.

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