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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Weekend warriors

June 18, 2008

Sometimes cited as a place where an alcohol ban has been successful, the islands of Chuuk (formerly Truk) in the Federated States of Micronesia, has recently suspended the act.

The Federated States of Micronesia lie in the Pacific Ocean, north of Papua New Guinea. They and its western neighbour Palau form the Caroline Islands.

The first Old World explorers to the Caroline islands were the Spanish (1526) and Portuguese(1527), though the Spanish did not assert control till 1875. They sold the islands to the Germans in 1899.

Incidentally, German Caroline Island stamps are very collectable, if you have any. The very early ones are just German stamps with the word Karolinen printed over them.

The Germans lost the islands to the Japanese at the start of the First World War, and the Japanese lost the Islands to the United States in the Second World War.

The Federated States of Micronesia gained its independence from the US in 1986; Palau achieved it in 1994. Both countries still have a compact with the United States that allows the US to station its defence posts in the islands in return for financial aid.

One of the islands in the Chuuk group, Moen, had a referendum of the prohibition on alcohol in 1977 with a 93 % Yes vote, a move prominently supported by the Moen women and the local Protestant church. This was to try and stop the young men getting drunk at the weekend; so called ‘weekend warriors’.

The effects of this prohibition were to drive drinking underground, and drinking after a short lull returned to its previous levels before it was introduced. Tax revenues were also affected. So long as the drinking was in private and without disturbance, the police had a relaxed attitude.

People however felt the streets safer and the alcohol ban was enforced in neighbouring islands in the Federated States of Micronesia.

This year though the ban has been suspended. The Micronesian nation has become a magnet for tourists, particularly for scuba divers, and particularly in the Chuuk islands at the heart of the alcohol ban.

Tourists and prohibition just don’t go together. The ban had to end. Foreign money was much more important than a temperance movement.

There has been little evidence for a temperance movement in Scotland, but the alcohol comsumption figures are at startling levels.

In particular the rise of underage drinking is a worrying trend.

Alcohol consumption in Scotland

We can see from the graph that alcopops have came from nowhere and ciders have increased. These are drinks prodominately associated with young drinkers.

The violence and anti-social behaviour of our young people in some ways match the ‘Weekend warriors’ tag of the Chuuk islands.

Their ban didn’t quite work.

Reports are that the Scottish Government is considering an increase of the legal age to buy alcohol in off-licences and supermarkets from 18 to 21. This is an attempt to stop underagers buying alcohol in off-licenses; its far easier for them to appear 18 as it is to appear 21. However 18-year olds and over can still buy alcohol in pubs and clubs. It is hoped that such environments will provide an element of supervision for young adults.

Nowhere near a ban then.

Scotland’s drink culture is engrained. Years of trying to change the culture, promotion of healthy drinking levels or abstinence, education, advertising bans etc. just haven’t worked. Children being admitted to Scotland’s hospitals for alcohol abuse are testament to that.

As with the smoking ban introduced in 2006, legislation is always the last resort taken to changing the culture. Its also the most effective.

Lets hope any new legislation is helpful. These proposed ideas may not go far enough to curb Scotland’s ‘Weekend Warriors’ and change the drinking culture.

But they’re a good start.


Northern Irish and Welsh broadband take-up

June 17, 2008

I’ve taken both countries together, as their average broadband speed is the slowest in the UK; Northern Ireland (2.26 Mbps) being the slower of the two. Wales is slightly better on 2.59 Mbps.

Both countries are the lowest in the UK for broadband take-up. Northern Ireland is slightly behind Scotland at 52 %, and Wales is crawling at a take-up of 45 %. This would put Northern Ireland at 17th in the ITIF take-up ranking if included, in front of Spain. Wales would be at 21st just in front of Portugal. This is in comparison to the UK’s 12th position on broadband take-up, though Wales is slightly better than nearby Liverpool’s rate of 40 %, and Glasgow’s rate of 32 % which is the lowest in all of the UK.

BT claim in Wales that the country has 99 % access to broadband, a claim that has been disputed by the Welsh Consumer Council.

The Pembrokeshire firm Telecom Facilities seeks to improve the access to 100 % by a novel idea – they plan to put wifi basestations in church spires to bring broadband to rural communities!

That’s such a good idea it deserves to be taken on in rural communities throughout Scotland, England and Northern Ireland too that are still without broadband.

The Liberal Democrats in Wales have not been slow to point out the discrepancy of speed. Mark Williams, the MP for Ceredigion, has stated: “These results show the true picture of broadband services in the UK. While London enjoys the full benefit of super-fast connections, Wales is left with the internet equivalent of two cups and a piece of string.”

Meanwhile, Northern Ireland was the first country in the UK to achieve 100 % Broadband access in its exchanges. This is in comparison to Scotland; Ofcom does not even know how much of Scotland is beyond the reach of broadband!

Northern Ireland has one of the average lowest weekly wages in the UK and one of highest comparative spends on communications. Thus, even with a low weekly wage people are still spending on communications.

It also has a higher rural population than the rest of the UK. Rural broadband take-up was slightly higher (54%) than urban take-up (52%).

Although both have low broadband speeds and take-up rates, there is some good news on language. There are some 14000 articles on wikipedia written in Welsh and around 6000 articles written in Ulster Scots.

That’s a fair achievement considering the low take-up and speed.

Just think what could be done if the take-up was improved.

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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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