Walmart starts advertising price cuts, business opportunities - South Africa

Six days after United States giant retailer Walmart completed its acquisition of a controlling stake in Massmart, it started advertising price cuts and new business opportunities for South Africa.

Six days after United States giant retailer Walmart completed its acquisition of a controlling stake in Massmart , it started advertising price cuts and new business opportunities for South Africa.

An eight page colour advertisement in the Sunday Times newspaper was South Africa's first introduction to the Walmart brand.

The advertisement included a letter from "the people" of Massmart and Walmart announcing the merger and price cuts by the group's retailers Game, Dion Wired, Makro and Builders' Warehouse.

Massmart also said it intended creating 15,000 jobs in the next five years.

"While there are other exciting promotional campaigns planned, this offering so soon after the finalisation of the Walmart merger is a clear demonstration of Massmart and Walmart's intent to save people money to live better," Massmart CEO Grant Pattison said in a statement on Sunday.

Earlier, he told the Business Times there were no plans to open Walmart-branded shops as the local brands had "plenty of value", and there were plans to open 40 more of them in the next financial year.

However, these brands would be advertised under Walmart's blue and yellow logo.

Walmart completed a R16.5bn conditional transaction to buy a 51 percent stake in Massmart on Monday, after getting the go-ahead from the Competition Tribunal.

The merger was conditional on the setting up of a R100m supplier development fund, no merger-related retrenchments for two years, and recognition of the SA Commercial Catering and Allied Workers' Union for three years post the merger.

In the statement on Sunday, Pattison said the supplier fund was being created.

Walmart has 55 brands around the world in, among other countries, Canada, Brazil, China, Chile, Japan and Mexico.

Its share of Massmart would be a stake in emerging African markets.

Before the deal was concluded, the South African government and unions voiced concerns that it would lead to job losses and hurt local procurement.

However, the Competition Tribunal found that the conditions to counteract this, which were proposed by Walmart and Massmart, were sufficient and were enforceable.

"Both Massmart and Walmart remain committed to partnering with the South African government as well as all key stakeholders, and we stand by our stated commitment to encourage other international companies to invest in Africa's vibrant economy," Walmart CEO Doug McMillon said in the statement.

http://www.businessday.co.za/articles/Content.aspx?id=146837

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‘Balance African progress, climate change’

Climate change policy planning and funding of ameliorative efforts for global warming needed to take account of the “development trajectory” of the African continent, Finance Minister Pravin Gordhan told delegates to a climate change forum at the weekend.

Gordhan said he believed that Africa would be emerging as “a key player” in the world economy in the next 30 years.

He was speaking at the Climate Investment Funds (CIF) Partnership Forum, an annual event hosted by the African Development Bank (AfDB) and the World Bank where funding decisions on climate-smart development worldwide are taken.

“What Africa does require is that traditional paradigms of funding and aid need to be transformed,” he said.

“A new formula which links action on climate change to genuine development for the peoples of Africa for industrialisation and economic development… is needed.”

Such initiatives should be directed at genuine job creation and skills development “and urgent and systematic processes that will eradicate poverty on this continent as well,” he added.

Gordhan said he was “a firm believer” that Africa would become the site for research and development for new technologies and policies to fight climate change.

He said climate change was the “key issue facing humanity”, which he believed would test the human ability “to co-operate to overcome adversity, to overcome our instinct to act only within our own self-interest and attempt to act to redefine the global interest”.

“Let us ask ourselves how we can… reformulate the development trajectory on the African continent and use the opportunity… to ensure the benefits of growth don’t get left to a small elite,” he said, adding that the change should benefit Africa’s 1 billion people.

AfDB communications officer Chawki Chahed said that Africa would put nearly 40 percent, or $2.6 billion (R17.9bn), of the CIF’s $6.5bn to work across the continent this year.

The funding is earmarked for renewable energy and energy efficiency projects, climate-compatible development planning and sustainable forest management.

Delegates from 45 countries attended the forum. The African delegates hailed from Algeria, Burkina Faso, the Democratic Republic of Congo, Egypt, Ethiopia, Ghana, Kenya, Mali, Morocco, Mozambique, Niger, Nigeria, South Africa, Tunisia and Zambia.

Donwald Pressly  http://www.iol.co.za/business/business-news/balance-african-progress-climate-change-1.1088893


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Africa - Tripartite Free Trade Area negotiations

Launching the Tripartite Free Trade Area negotiations: opportunities and challenges

2011-06-15 Taku Fundira

Resources > By Topic > REGIONAL TRADE ARRANGEMENTS > SADC EAC COMESA Tripartite FTA

Taku Fundira, a tralac Researcher, discusses launching the Tripartite Free Trade Area negotiations: opportunities and challenges.

The Southern and Eastern regional economic communities (RECs) of the Common Market for East and Southern Africa (COMESA); the Economic African Community (EAC) and the Southern African Development Community (SADC) on 12 June 2011 signed an agreement at a Summit in Johannesburg, South Africa to launch negotiations of an expanded free trade agreement (FTA). The COMESA-EAC-SADC FTA also referred to as the tripartite FTA will be the continent’s biggest FTA comprising of26 countries spanning from Cape Town to Cairo with an estimated market potential of US$ 1 trillion.

At the Summit, Heads of State adopted a developmental approach to the integration process that anchors on three pillars namely; market integration; infrastructure development and industrial development. Negotiations will be in three phases, two of which are expected to be concluded within three years of signing the agreement (by June 2014). These phases which will run concurrently include market integration and infrastructure development. The movement of legitimate business people will also be negotiated during this phase. The final phase which will look at Industrial development and other trade related measures has no time frame allocated to it.

Launching of this tripartite FTA has been welcomed with mixed feelings. As already noted in our previous discussions, there are some benefits that can come out of such an arrangement. These include: duty free access to an enlarged market; an opportunity to simplify the Rules of Origin requirements; and elimination of non-tariff barriers (Fundira, 2009). However, it should be noted that there will be winners and losers in this agreement. Based on a computer analysis of such an FTA, in a recent tralac publication “Cape to Cairo: An Assessment of the Tripartite Free Trade Area,” we note that there are more losers than winners. 

The Global Trade Analysis Project (GTAP)¹  latest pre-release Version 8 database used to assess the welfare and trade gains from this FTA as determined by duty-free merchandise goods access and with a small (two percent) reduction in assumed non-tariff barriers to both merchandise goods and services barriers also factored in, revealed interesting findings (Jensen and Sandrey, 2011);

a)  For the final tripartite agreement only the results show that there are significant gains to Southern Africa, but only for South Africa and Mozambique. South Africa welfare increases by US$1,321 million or 0.22 percent of the real Gross Domestic Product (GDP).
b)  Results for the rest of SACU (Lesotho, Namibia and Swaziland) are disappointing with a welfare loss of $84 million, while Botswana similarly loses $16 million. 
c)  Most other tripartite partners gain or lose very marginally, excepting Mozambique which gains $57 million.  This is because most countries other than South Africa and Mozambique have access to other FTAs through their multiple membership of overlapping FTAs.
d)  For agriculture, the tripartite FTA is only beneficial in sugar and then only for the South African and Mozambique agricultural sectors.  
e)  Manufacturing is the big gainer for Southern Africa, but again really only for South Africa with lesser gains for Egypt and rest of eastern Africa (Kenya). 
f)  Revenue for the SACU tariff actually increases by US$49 million as a result of South African manufacturing imports from non-African countries to replace increased exports to the rest of east Africa. Employment and real wage outcomes are both positive for South Africa.

Although the findings depict a bleak picture with regards to the “winners and losers” from such an agreement, there is optimism on the prospects of the tripartite FTA as a driver of economic growth and development. As the expanded economic zone helps boost the region’s economies, smaller countries that stand to lose in the interim should regard this as a short term temporary setback that in the long run will benefit, once they identify and develop sectors where they have competitive advantage. According to South Africa’s Trade and Industry Minister Rob Davies, “integration would enhance Africa's chances of capitalising on the two drivers of its faster growth rates - the mineral boom and the growth in the domestic market” (SAPA, 2011). 

Despite the optimism, if past experience is by all means regarded as indicative of future success, the prospects of a successful establishment of the tripartite FTA are minimal. Arguments for this notion are based on the fact that currently, within the individual RECs, integration has not been as smooth and there are still problems with implementation. 

For example, in COMESA, although in theory, the REC has attained customs status, some members have not adopted the common external tariff, while in SADC; already the REC has missed a 2010 deadline to attain customs status with some members still not yet implemented the SADC FTA. A lack of “political will” and implementation deficiencies to comply with a rules-based regional trading arrangement which they negotiated, within the existing trade regimes are some of the reasons for such problems. It is therefore necessary that such issues are addressed and that Members are encouraged to comply with their FTA obligations..

¹  See the GTAP website at https://www.gtap.agecon.purdue.edu/ for a full introduction to the model.  

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South Africa approves Wal-Mart bid, govt could take action

South Africa approved Wal-Mart’s R16.5 billion (US$2.4 billion) bid for control of retailer Massmart with minimal conditions on Tuesday, giving the world’s top retailer a big boost in its plan to expand in fast-growing Africa.

South Africa’s Competition Tribunal told Wal-Mart not to cut jobs for two years, honor existing labor agreements, and work to develop local suppliers, concessions the US firm had earlier proposed itself.

The deal gives Wal-Mart a 51 percent stake of Massmart, a discount retailer that sells everything from liquor to televisions and has a presence in at least a dozen African countries.

The decision will be seen as a major advance for Wal-Mart, which had said it could drop its offer if the government imposed targets on using local suppliers.

“This is good news. It included concessions put forward by both parties so it’s a victory all round,” said Paul Theron, CEO of Johannesburg-based asset manager Vestact.


“It shows that South Africa is open for business, that large corporates are potential players for outside investment.”

Massmart must also “give preference” to reemploying 503 workers fired in 2010, set up a R100 million (US$15 million) fund to help develop local suppliers, and not challenge SACCAWU’s right to represent bargaining units for three years, the tribunal said.

The two companies said in a joint statement they were “pleased” with the decision and expected Massmart’s food business to grow by 50 percent over the next five years.

The decision was a victory for Wal-Mart, as it did not impose restrictions on where it sources it goods, said Brian Sozzi, a New York-based analyst at Wall Street Strategies.

“In two years it looks like they can go to town on labor costs,” he said.

“The whole thing with them is to get goods into the South African market as cheap as possible and sell them as cheap as possible.”

However, the ruling is a blow to South Africa’s influential labor unions, one of which is already considering an appeal.

“We are meeting with our legal representatives to explore legal options,” said Mike Abrahams, a spokesman for the South Africa Commercial, Catering and Allied Workers Union (SACCAWU), adding that the union could consider appealing to the Competition Appeals Court.

That could further delay the deal, which was first announced in September 2010.

The deal was a test case for major foreign investment in South Africa, which has the continent’s deepest capital markets but where unions are in a coalition with the ruling African National Congress.

Three government departments – economic development, trade and industry, and forestry and fisheries – and the unions had lined up against the deal, asking the tribunal to impose targets on local procurement and a freeze on job cuts.

The government and unions have said Wal-Mart’s global supply network could lead to a flood of cheap imports, sparking job losses and squeezing local companies.

“We would have hoped that the deal would be rejected or at least much more stringent conditions be imposed,” said Patrick Craven, a spokesman for the COSATU union federation.

“Our biggest concern remains completely unanswered, and that is the knock-on effect on jobs in other retailers and the manufacturing industry.”

The three departments said in a joint statement late on Tuesday they would need further study to determine whether the conditions were sufficient enough to prevent widespread job losses.

“Based on the outcome of the study of the conditions and the responses of Wal-Mart/Massmart, we will decide on the next steps to take. Government reserves its legal options at this stage,” the three departments said.


http://www.tralac.org/cgi-bin/giga.cgi?cmd=cause_dir_news_item&cause_id=1694&news_id=104482&cat_id=1026

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Walmart’s SA play leads to Africa

The Walmart issue stirred so many passions on both sides of the free market versus workers dictatorship divide that the only sensible decision the Competition Tribunal could settle on was something resembling the wisdom of King Solomon, who threatened to cut a disputed baby in half, prompting the real mother to speak up and save the child.

Except in this case, the tribunal simply split the issue down the middle, setting conditions that were not too onerous and making concessions that don’t cost too much.

Steven Kilfoil of corporate finance at Grant Thornton says, with a weather eye on potential foreign direct investment: “The decision is hugely positive. If they had imposed seriously onerous conditions, that would have been negative in a big way.

“We are trying as a country to get away from people just investing their money in (the JSE) and taking it away at a moment’s notice. We are trying to get them to invest properly in South Africa by building businesses. The South African play by Walmart leads to a much larger African play. If we had imposed serious conditions on Walmart, that would have been seen as prohibitive and anyone else contemplating investing here would have run away.

“Take the introduction of the Companies Act, we couldn’t get the dates right – amateurish is about the kindest thing that can be said about that. The foreign investor is looking for a place of safety and comfort and all he hears is talk of nationalisation and unions trying to intervene in how business is done. Let us just be glad that common sense has prevailed.”

That will give a lot of comfort to foreign investors.

Walmart

Attempts to elicit comment from the Economic Development Ministry of Ebrahim Patel on the landmark decision on Wal-mart being given permission by the competition tribunal – with certain conditions – to buy control of JSE-listed Massmart proved fruitless yesterday.

Understandably Zubeida Jaffer, the minister’s spokesman, could not comment as she took ill on Monday and was rushed to a Johannesburg hospital. Someone who answered her phone referred the matter to a Dumi Makwetla – apparently a new staff member – but he switched off his phone.

Jaffer’s assistant, Roslyn Daniels, was courteous, but unable to help. But she indicated that the minister was in a departmental meeting for two days in Johannesburg, with his senior staff. A call to Richard Levin, the director-general, was answered but he indicated he was “in an important meeting” and could not talk.

ANC spokesman Jackson Mthembu’s phone was engaged but then rang. It was subsequently switched off. The phone of second spokesman Keith Khoza took messages, not returned. A third man listed as spokesman Moloto Mothapo, a spokesman at Luthuli House during the municipal election campaign, has returned to Parliament in Cape Town to his old job as the chief whip’s spokesman. He indicated he could not answer questions on the ruling, which was a Luthuli House matter.

Finally spokesman Brian Sokutu said while the ANC welcomed the ruling “we share sentiments expressed by labour federation Cosatu that this massive investment which is certainly set to stimulate economic growth… should not lead to job losses. Job creation is one of the key ANC priorities with (the president) already having announced a special fund to create jobs”.

The silence of Economic Development, however, is perplexing, especially as Patel sought from Walmart in February “strong local procurement, that the South African supply base is supported and that our capacity to create jobs locally is highlighted”.

The conditions of the ruling pretty much carried out that mandate.

Competition Tribunal

For those puzzling over the what many consider to be rather light conditions imposed on Walmart and Massmart, the following from the Competition Tribunal may shed some light.

“Our job in merger control is not to make the world a better place, only to prevent it becoming worse as a result of a transaction.” These are the words of the tribunal in a statement issued yesterday, which announced its decision to approve Walmart’s acquisition of 51 percent of Massmart, with conditions.

It added: “This narrow construction of our jurisdiction has not always been appreciated by some of the interveners who have sought remedies whose ambition lies beyond our purpose. It is not our task to determine whether those ambitions are legitimate public policy goals; only whether they lie within our powers.”

This goes some way to explaining why the conditions imposed on the merging parties are so moderate, especially given the effect the deal will have in South Africa, on suppliers specifically. A full explanation from the tribunal is expected in 20 days.

The tribunal says it is required by law to be aware of public interest concerns, but the law limits its ability to remedy concerns. In addition, the purpose of public interest concerns is not to protect firms from losing out to market forces, but to protect a substantial public interest.

So it may see a problem looming, but not have within its scope the means to remedy it. That is not to say that the tribunal has taken the view that the deal will present problems. In fact, it says a likely outcome of the merger based on Walmart’s history is low prices and consumer choice.

But it concedes that just how significant those benefits will be is not clear.

Walmart itself cannot (or will not) put a number to this claim, despite many acquisitions over many years in many parts of the world, which could provide quite specific details on just how much (or how little) consumers have benefited.

Questions over the merits of this deal are not likely to evaporate now that it has been approved. Instead evidence of the many touted benefits are eagerly awaited.

Edited by Peter DeIonno. With contributions by Peter DeIonno, Donwald Pressly and Samantha Enslin-Payne.

http://www.iol.co.za/business/opinion/business-watch/walmart-s-sa-play-leads-to-africa-1.1076735

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WORLD INDUSTRIAL PRODUCTION ON THE RISE

World manufacturing output has grown by 6.5 per cent in the first quarter of 2011 compared to the same period last year, the United Nations Industrial Development Organization (UNIDO) reported today.

“The figure clearly indicates the progress of the recovery of world industrial production from the recent financial crisis,” UNIDO http://www.unis.unvienna.org/unis/pressrels/2011/unisous085.html said, in the first edition of its new plan to report industrial statistics quarterly. Formerly the presentations were annual.

The report, based on an analysis of quarterly production data, said developing countries were in the lead with their manufacturing production increasing by 11.5 per cent. The major contribution to this growth was by China, with its output growing by 15 per cent.

Newly industrialized countries also performed well, with Turkey displaying a growth rate of 13.8 per cent, while Mexico’s was estimated at 7.4 per cent and India’s at 5.1 per cent.

The manufacturing output of industrialized countries increased by 4.4 per cent during the named period, with strong growth of 7.1 per cent observed in the United States, the world’s largest manufacturer.

Major European economies, including France, Germany and the United Kingdom, also demonstrated significant growth in manufacturing output. But other European countries, such as Greece, witnessed a 6.9 per cent drop, while Portugal and Spain maintained a marginal growth of less than one per cent.

Japan’s figures fell by 2.4 per cent. The full impact of the March Tsunami disaster was not yet reflected in manufacturing production data for the first quarter.

Negative growth was observed in North Africa, where the manufacturing output of Egypt and Tunisia fell by 8.9 per cent and 7.4 per cent respectively.

The UNIDO report also contains the growth estimates for the first quarter by major manufacturing sectors. It suggests that production of general machinery has increased by more than 15 per cent, electrical machinery and apparatus by 12 per cent, and medical and precision equipment by 11 per cent.

While industrialized countries performed well in high-tech sectors, their growth in traditional manufacturing areas such as food and beverages, textile and wearing apparel was quite low. Developing countries maintained higher growth across all sectors.

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South Africa, Walmart / Massmart Merger

Gerhard Erasmus, a tralac Associate and Paul Kruger, a tralac Researcher, discusses the Walmart/Massmart Merger - The Role of International Law in Regulating Competition, Investment and Trade.


BACKGROUND

The recent hearings before the South African Competition Tribunal on the proposed Walmart/Massmart merger were dominated by arguments about the impact of the proposed deal on jobs and local procurement.  Some have argued that the Tribunal should decline permission for the merger, and that if it could not do so, it should impose restrictive conditions on Walmart, which wants to buy 51% of Massmart for about R16.5bn. The South African trade unions, the government and some retailers want specific conditions about future labour practices and imports to be imposed as part of the conditional approval for the transaction to go ahead.

A number of important international legal issues have also been raised. Arguments on behalf of Walmart suggest that several international agreements impact on the domestic regulation of trade, competition, investment and related aspects. These matters are often connected. This paper discusses these issues and the reasons why international trade law applies to investment, competition and this particular merger. The relationship between national and international law also needs clarification, as does the role of the government in this matter.  One of the additional questions to consider is whether private parties can invoke these agreements; or do they only apply on the inter-state level?

Walmart has subsequently offered certain concessions but during the hearings before the Competition Tribunal its legal representatives have argued that restrictive conditions (depending on how they are formulated) may violate South Africa’s obligations under the WTO agreements. It would be impermissible, they argued, to discriminate against Walmart by obliging it to comply with obligations which do not bind its competitors. What are these international obligations and why would the suggested conditions constitute violations of international rules? Do these international agreements apply domestically? 

IS IT ABOUT PROTECTIONISM?
There have been suggestions that the intervention by the South African government before the Competition Tribunal is inspired by protectionist motives. The implication seems to be that it is improper for the authorities to be involved in these hearings. There is nothing improper about the government being concerned about an investment of this kind and to raise questions about its consequences. The other parties and commentators are free to entertain different views. They may challenge assumptions that employment can be protected in the manner proposed by the government and the unions and may offer alternative ideas on how best to secure welfare gains and consumer benefits. They may even pass judgment on the government’s motives and call them ‘protectionist’. The fact that the government raises its concerns now is, however, not wrong or inappropriate.   These hearings take place before a public forum and the purpose is to obtain information from the parties concerned and to test the evidence; before making a final ruling on the conditions applicable to the merger. Ultimately the criteria laid down in South Africa’s competition legislation apply, while certain international obligations should also be considered. There is a qualification though; the government’s concerns can, insofar as they relate to binding international legal arrangements, only be accommodated within the ambit of permissible exceptions, in addition to complying with the Competition Act and general administrative law requirements. The accommodation of the international dimension is one of the challenges now facing the Competition Tribunal.  

Governments are, as a matter of course, involved in matters of this magnitude; overseeing foreign investment is an accepted governmental function. Many states have legislation dealing with foreign investment and official permission is often required; as happened when foreign investors bought shares in Absa and Standard Bank in South Africa a few years ago. 

In the globalised economy national market regulation measures frequently have international ramifications. Compliance with international obligations then enters the equation. There are many examples. Only last week the WTO Appellate Body gave a ruling in the EU/USA dispute about state subsidies paid to the Airbus and Boeing companies and the effect thereof on fair trade. It does not come as a surprise that the same consideration (the effect of the state’s international obligations)
applies to measures about competition and mergers involving foreign companies. 

The procedure with respect to the present merger is not at fault. The transparent involvement by the government, together with other parties, acknowledges a basic rule of law requirement. The issues are openly debated. In South Africa (and in certain neighbouring countries) questions concerning the promotion of competition are regulated by law. The Competition Tribunal is an independent forum and will give a decision on the merits and in terms of its legal powers. If a particular party with the necessary standing feels aggrieved about the final ruling, it will be possible to take the matter to the Competition Appeal Court and even to the regular courts. South Africa has a dedicated legal arrangement consisting of detailed legislation and institutions (Competition Commission, Competition Tribunal and Competition Appeal Court) to investigate, decide and review competition related questions and rulings. This includes procedures for protecting the rights of parties and to ensure that the applicable legal norms are fully adhered to. Remedies will be granted where due. 

This happened in Namibia with respect to Walmart’s recent merger notification in Windhoek. The facts of that case are mentioned below in order to highlight an important aspect of the present matter, the general rules-based nature of the procedure and the fact that decisions by competition authorities should be justiciable.

THE REGIONAL CONTEXT
The competition hearing in South Africa is the final hurdle for Walmart’s entrance into Africa, as the necessary approval has already been obtained in the other African states with competition regulators. Massmart operates in 14 African countries, but only six of these countries require competition approval for the acquisition. The competition authorities in Tanzania, Malawi, Swaziland and Zambia gave their unconditional approval for the deal. Namibia and South Africa are the two outstanding jurisdictions. 

South Africa represents by far the most important market for Walmart in Africa; as 93 percent of Massmart’s revenues are generated in this country. If the merger is refused, or too strict conditions are imposed on its South African operations, it will seriously frustrate Walmart’s entry into Africa. 



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No Better Export: Higher Education - By Francisco Sánchez

In his State of the Union address, President Obama, who has emphasized the importance of higher education in our nation, said we must "out-innovate, out-educate, and out-build the rest of the world. ... That's how we'll win the future." From my perspective, a crucial element of winning the future is an increased focus on exports—and among our most valuable exports is education.

This week I have been joined by recruiters from 56 colleges and universities across the country, from Columbia University to the University of Texas at San Antonio, for a weeklong education mission to Jakarta, Indonesia, and to Ho Chi Minh City and Hanoi, Vietnam. The purpose of the trip is to explore opportunities for student recruitment and partnerships with higher-education institutions in those two countries. In each city, we are meeting with students and their families, and the participating American colleges will promote their international-study programs in the United States. We have also organized networking sessions and education symposia to promote university-to-university partnerships, such as faculty exchanges, student exchanges, and research projects.

Why do this? Why now?

At the International Trade Administration, in the U.S. Commerce Depart­ment, my primary objective is to spur job creation and aid the nation's economic recovery by doubling U.S. exports within five years. You might not think of students as part of our export strategy, but, in fact, higher education ranks among the country's top 10 service exports, right between environmental services and safety and security. We are the largest destination for international students seeking higher education; tuition and living expenses paid by those students and their families brought nearly $20-billion to the U.S. economy during the 2009-10 academic year. According to the Institute of International Education, that dollar figure is expected to continue rising.

More than 20,000 students from Indonesia and Vietnam are already enrolled in colleges and universities in the United States, and most of them pay full tuition. That opens opportunities for more American students to receive financial aid and scholarships. The purchasing power of international students who study in the United States remains strong after they graduate and return home. And as they become part of the growing middle class, regardless of where they live in the world, they will have a better understanding and appreciation of American products and services, and will be more likely to remain our customers.

We are focusing on Jakarta, Ho Chi Minh City, and Hanoi for a number of reasons.

Related Content

• State by State, Colleges Team Up to Recruit Students From Abroad
• Commerce Dept. Takes Greater Role in Promoting U.S. Higher Education Overseas

Expanding educational opportunities for students in emerging economies like Indonesia's and Vietnam's is critical to developing a middle class in those markets. The new middle-class consumers emerge with increased resources to participate in both local and global markets, including that of the United States.

In Jakarta, education is the No. 1 priority of the U.S. Embassy, and doubling the number of Indonesian students in the United States by 2014 is one of its top goals. This mission will help meet that goal and ultimately benefit both our educational institutions and our economy. We used our domestic network to recruit colleges and universities that are interested in exploring international partnerships and working toward a global educational approach on their campuses.

In Vietnam, with a population of 86 million, a steadily increasing per capita income, and the high value placed on education, there are significant opportunities for American providers of education services. Vietnam has more than 20,000 students studying abroad, paying about $200-million in tuition and fees every year. It ranks ninth among countries sending students to the United States.

Expanding the educational opportunities for Indonesian and Vietnamese students will provide direct benefits to U.S. companies doing business with those critical markets in the future. Many of them seek out U.S.-educated distributors overseas because of their understanding of American culture, their English-language skills, and the resulting increased ease of doing business with them. This is a part of a long-term strategy to set America on strong footing in emerging global markets.

However, international competition is fierce, and the United States has seen a 30-percent decrease of its market share in the past decade, reinforc­ing the importance of its efforts to maintain its position as the world's leading higher-education destination. Building ties with international students not only helps American students gain a greater level of international understanding—a vital skill for success in the 21st-century global economy—but also familiarizes future global leaders with the American people and U.S. society. As we look to "win the future," I see no more valuable export than that.

Francisco Sánchez is under secretary for international trade at the U.S. Commerce Department.

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The Square Kilometre Array (SKA) will be a mega radio telescope, about 100 times more sensitive than the biggest existing radio telescope.

Africa is bidding to host the world's most powerful radio telescope, the Square Kilometre Array (SKA). When constructed, in 2025, it will have 50 times greater sensitivity than any other radio telescope on Earth.

The SKA will probe the edges of our universe, even before the first stars and galaxies that formed after the Big Bang. This telescope will contribute to answering fundamental questions in astronomy, physics and cosmology, including the nature of dark energy and dark matter.

South Africa is leading the African bid and has already legislated to create 12.5 million hectares of protected area - or radio astronomy reserve. This area is also referred to as the Karoo Central Astronomy Advantage Area, offering low levels of radio frequency interference, very little light pollution, basic infrastructure of roads, electricity and communication.

The Square Kilometre Array (SKA) will be a mega radio telescope, about 100 times more sensitive than the biggest existing radio telescope.

SKA is a €1.5 billion project, with operating costs of about €100 million a year.

It will be the first to provide mankind with detailed pictures of the “dark ages” 13.7 billion years back in time.

This mega telescope will be powerful and sensitive enough to observe radio signals from the immediate aftermath of the Big Bang.

If there is life somewhere else in the Universe, the SKA will help us find it.

At least 24 organisations from 12 countries, including Australia, Canada, India, China, France, Germany, Italy, Portugal, Spain, South Africa, Sweden, the Netherlands, the UK and the USA, are involved.

The SKA will consist of approximately 4 000 dish-shaped antennae and other hybrid receiving technologies.

Both South Africa and Australia have suitably remote, radio quiet areas for hosting the SKA and have competing bids to host the SKA.

If Africa wins the SKA bid, the core of this giant telescope will be constructed in the Karoo region of the Northern Cape Province near to the towns of Carnarvon and Williston, linked to a computing facility in Cape Town.

Other countries where stations will be placed include Namibia, Botswana, Mozambique, Mauritius, Madagascar, Kenya and Zambia.

South Africa is already building the Karoo Array Telescope (MeerKAT) which is a precursor instrument for the SKA, but will in its own right be amongst the largest and most powerful telescopes in the world.

For More Infromation
Mr. Rod Marcel
E Mail rod@skaafrica.com

www.skaafrica.com


US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/

A hands-on leader pushes Commerce

Commerce Secretary Gary Locke's spacious, wood-paneled office features a working fireplace, elegant artwork and other luxurious touches befitting one of the federal government's top economic officials.

More unusual is the nearly 60-foot-long Chinese dragon kite that hovers over his desk. The piece is not just a nod to the heritage of the first Chinese American to hold the top Commerce Department job but also evidence of Locke's hands-on style - aides said he came in one weekend and hung it himself.

It is an approach Locke has taken to running the sprawling department, which plays a crucial role in the Obama administration's plans for fixing the badly broken economy.

Since Locke took office in March 2009, he has earned a reputation as the type of manager eager to know details and wring out new efficiencies. He has pushed the Patent and Trademark Office to shorten the time it takes to get a patent, from 34 months to 20 months. He cajoled the Economic Development Administration, which makes business-development grants to distressed communities, to streamline its approval process. And he brought the 2010 Census in 25 percent under budget, saving taxpayers $1.9 billion.

But those management feats pale next to the challenge he faces as one of the key figures in implementing President Obama's pledge to double U.S. exports within five years.

The expansion of exports would mean 2 million new jobs, officials calculate, and with the nation desperate for new sources of employment growth, the mission is urgent.

Even before the housing crash and deep recession, the nation's economic growth was built on a flawed foundation of asset bubbles and excessive consumer debt, Locke said. Coupled with growth driven by innovation in areas such as renewable energy and high-quality manufacturing, he said, exports could form the basis for a new prosperity.

"Clearly we need to export more as a country as part of our economic recovery," Locke said.

The export goal is ambitious. Countries such as China and India, once thought of mostly as sources of cheap labor, are developing increasingly sophisticated manufacturing capabilities.

Still, Locke said, the potential for expanding U.S exports is plain.

Only 1 percent of U.S. companies export products at all, and of those, 58 percent export to just one country, most frequently Canada or Mexico, he said.

"If we can just help those firms export to one or two more countries, we would be able to increase exports exponentially," he said. In 2010, he noted, U.S. exports increased by 17 percent. The growth was broad-based, led by increases in exports of industrial supplies and materials, machinery and food.

For Locke, all of this plays into his prior experience. During the two terms he served as governor of Washington - home to global giants such as Microsoft and Boeing - trade with China more than doubled.

After leaving the governorship, Locke was a partner in the Seattle office of the law firm Davis Wright Tremaine. There, his work focused on helping U.S. companies break into international markets.

"I'm trying to bring some of those lessons learned" to the Commerce Department, Locke said.

He noted that "Made in the USA" is a phrase that still has clout around the world. "There is a huge hunger and demand for U.S. products," he said.

In its first two years, the Obama administration has earned a reputation in some quarters for being hostile to business.

Some business leaders have complained that the administration has demonized them in its rhetoric while hamstringing them with new environmental, health-care and financial industry regulations.

Locke, however, says the tension has not been obvious in his job, which requires constant interaction with business leaders.

In 2010, Commerce coordinated 31 trade missions in 31 countries with 368 companies. Participating companies anticipate $2 billion in increased exports from the missions, the department says. In 2011, Locke is scheduled to lead four trade missions.

Locke was not the president's first choice to head Commerce. He got the job only after New Mexico Gov. Bill Richardson (D) and New Hampshire Sen. Judd Gregg (R), withdrew; Richardson cited an investigation of state contracting, and Gregg voiced his political differences with the president.

Still, Locke was eager to take on the challenge.

"I wanted to help the president turn around the economy," he said.

"It has taken the country many years to get to this sorry state of affairs, and we will not be able to turn it around overnight."

Even so, the process has proven more arduous than many people expected. While the overall economy is expanding, job growth has been anemic and the national unemployment rate has hovered close to 10 percent for a year.

Locke, however, says the administration is on the right track with its heavy investments in green energy, education and health care.

"It is almost like building the foundation of a house or an office tower," he said. "All the foundation work takes a long, long time. You don't really see it. It is all happening below the street level. . . . After that, then things really begin to take off."

By Michael A. Fletcher
Washington Post Staff Writer

http://www.washingtonpost.com/wp-dyn/content/article/2011/01/02/AR2011010203214.html


US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/