U.S. companies, including four subsidiaries of Oshkosh Corp., headquartered in Oshkosh, Wis., will supply 121 customized firefighting vehicles and related equipment for export to the Republic of Ghana, backed by a $41 million loan guarantee from the Export-Import Bank of the United States (Ex-Im Bank).
The U.S. exporter is Project Development International Inc. (PDI), a small and specialized project-management company in Dunedin, Fla.
"This deal demonstrates the solid business opportunities for U.S. exporters in sub-Saharan Africa that Ex-Im Bank can help them achieve. This large export to Ghana will help maintain American jobs at these companies and expand their market share in Africa," said Ex-Im Bank Chairman and President Fred P. Hochberg.
"The support from Ex-Im Bank was like wind under our wings during the years of development of this project. We value Ex-Im Bank's expertise and the exceptionally long repayment terms for the loan that were essential to this successful sale of quality U.S.-made firefighting equipment," PDI President James Lalumiere said.
Four Oshkosh-owned companies are participating in the export. Pierce Manufacturing Inc. in Appleton, Wis., will supply 90 pumper trucks, 10 tanker trucks and four aerial ladder trucks. Jerr-Dan Corp. in Greencastle, Pa., will supply 13 recovery trucks. Iowa Mold Tooling Co. Inc. in Garner, Iowa, is providing four service vehicles and spare parts. Oshkosh Specialty Vehicles Inc. in Harvey, Ill., is supplying four mobile breathing air compressors.
Two U.S. sub-suppliers are also participating. Bauer Compressors Inc. in Norfolk, Va., is supplying high-pressure breathing air equipment to Oshkosh Specialty Vehicles. Smeal Fire & Apparatus Co., a small business in Snyder, Neb., is providing the turntable ladders for the four Pierce aerial ladder trucks.
The export will help Oshkosh maintain employment of its highly skilled workforce in the wake of the recession of 2008-2009 that is continuing to affect domestic orders due to lagging local and state tax revenues.
"We are appreciative of the Export-Import Bank's strong support which is the first step in making this order a reality. Oshkosh looks forward to delivering 120 vehicles from four of our businesses and continued growth throughout Africa," said Tim Raupp, Oshkosh Corporation senior vice president and executive director of International Operations for Fire and Emergency.
The transaction is being financed by an Ex-Im Bank-guaranteed loan from Societe Generale in New York, N.Y. The repayment term is eight years. The credit is secured by the full faith and credit of the Republic of Ghana through its Ministry of Finance and Economic Planning.
The Ghana National Fire Service will purchase the equipment through Ghana's Ministry of Interior Service. The exports will replace existing vehicles, add new equipment for urban fire fighting and help the agency in its planned expansion of fire stations.
The principal supplier, Pierce Manufacturing Inc., was established in 1913 and has manufactured firefighting trucks and related vehicles since the 1940s. The company currently employs approximately 2,250 workers at its production facilities in Appleton, Wis., and in Bradenton, Fla.
Oshkosh Corp. designs and builds a broad range of specialty trucks, truck bodies and access equipment. Oshkosh has a workforce of more than 12,600 employees at its headquarters in Oshkosh, Wis., manufacturing operations in 11 different states and operations around the world.
PDI is a project management company established in 1980 for U.S. and international construction industries. In the last decade, the company has diversified into all aspects of planning, scheduling, and material and equipment procurement.
Ex-Im Bank, an independent, self-sustaining federal-government agency, exists to fill gaps in export financing, strengthen U.S. export competitiveness, and create and maintain U.S. jobs. The Bank provides a variety of financing mechanisms, including working capital guarantees to help small and medium-sized U.S. businesses, export-credit insurance to protect against nonpayment by foreign buyers, and loan guarantees and direct loans to assist foreign buyers of U.S. goods and services.
In fiscal 2009, overall Ex-Im Bank financing totaled $21 billion, and authorizations supporting small-business exports reached a historic high of $4.4 billion, nearly 21 percent of total authorizations. Ex-Im Bank authorized $412 million, including working capital guarantees, for U.S. exports to sub-Saharan Africa in fiscal 2009.
In the first eight months of fiscal 2010 (through April 2010), Ex-Im Bank authorized $14.7 billion in loans, guarantees and insurance - 70 percent of the total amount authorized in fiscal 2009. For more information, see Ex-Im Bank's Web site at www.exim.gov.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Friday, June 4, 2010
Thursday, June 3, 2010
Excitement and Tension Run High in South Africa By Karl-Ludwig Günsche in Cape Town
Only days before the start of the World Cup, South Africans seem as anxious about the planet's biggest soccer festival as they are excited. In a torn country, threats of strikes and uprisings by the poor have put a damper on euphoria. Some groups may use the spectacle to further their own interests.
Peter is a gas station attendant in Springbok, the capital of South Africa's Namaqualandes region, which is famous for its wildflowers. It's only a short distance from the border with Namibia, but you get the first sense here of the football fever that's about to explode across the nation. Hardly any flags can be seen, only a few fans have decorated the mirrors of their cars in the country's colors, and there aren't many people passing through with Bafana-Bafana shirts -- Springbok is not like the big cities.
But Peter managed to get a ticket for the preliminary match between the South African national team and Uruguay on June 16 in Pretoria. "It almost ruined me financially," he says, "and I had to stand in line for a long time. But I want to be there no matter what."
On June 12, he plans to drive with two friends in a beat-up old Toyota to Loftus Vesfeld Stadium in the capital city, a trip that will take three days. "I believe our boys can go far if we just give them enough support," the hopeful young gas station attendant says. For him it's a matter of honor to pack a vuvuzela in his suitcase -- the horn prevalent with South African soccer fans that German national team trainer Joachim Löw has described as "a little irritating over time."
The host country of the 2010 World Cup is completing the last preparations for the mass football festival. The event itself is a breakthrough for South Africa, but it's also been pitched as a harbinger for a new and better future. These are the African games -- meant to liberate the whole continent from an image of war, chaos, illness and catastrophe.
"A victory for the entire continent," is what FIFA head Sepp Blatter called it when he announced in 2004 that the games would be awarded to South Africa. Nelson Mandela had tears of joy in his eyes as he proudly held up the cup, saying, "I feel like a 15-year-old."
'Let Them, Just for Four Weeks, Be Good'
On the streets of Johannesburg, Pretoria and Cape Town, one can feel some of the euphoria that sent the country into a frenzy of joy after the decision six years ago. Supermarkets are decked in the national flag, workers wear South Africa T-shirts, sales of vuvuzelas are booming.
The stadiums have been completed, new hotels and streets have been built. Cape Town Mayor Dan Plato has pledged to host the "greatest party in South African history" the night before opening match. But a number of cars on the streets also have bumper stickers reading, "Fuck FIFA."
Tension and expectations have mixed with quiet fears that the football dream could become a nightmare. Even South Africa's president, Jacob Zuma, seems not entirely free of anxiety. At a women's prayer meeting last Thursday he said: "In this time, we need good South Africans. Let them, just for four weeks, be good. Just for four weeks."
He has good reason to be concerned. Despite the flags and the gorgeous stadiums, the new streets and well-armed police, his country is more divided than ever in recent history. No nation in the world has a gulf between rich and poor as great as South Africa's.
Despite billions of euros in investments related to the 2010 World Cup, last year more than a million South Africans lost their jobs. During the first three months of this year, 171,000 entered the unemployment rolls. The official unemployment rate is over 25 percent, the highest level seen in the past five years. Unofficially, it is estimated to be closer to 40 percent.
A recent study completed by the University of South Africa concluded that 75.4 percent of South Africans fall below the poverty level -- and almost all those poor are black. "Persistent poverty, rising levels of unemployment and violent crime, together with the crisis in the public health sector," writes Amnesty International in its annual report, have contributed at least as much as corruption and nepotism to the often violent protests that have recently shaken South Africa.
Moeletsi Mbeki, brother of former South African President Thabo Mbeki, recently said: "Unlike the elite in Asia, our leaders have simply copied the exploitation mentality of their former oppressors."
Behind the Mood of Celebration, A Country Festers
The façade of a country in a celebratory mood veils a nation that is actually festering, where people are sick and tired of being fobbed off with promise after empty promise. Labor leaders haven't been shy of threatening strikes during the World Cup. "Nobody must say 'Hold on, there are visitors around, don't do anything about this matter,'" Zwelinzima Vavi, who heads the Congress of South African Trade Unions, said last Thursday. "Our struggles … are bigger than the World Cup."
Slum dwellers increasingly fight their fate. In Balfour they even shouted down Zuma, the former national hero. One in every two South Africans are unhappy with the public sector and the state's services, according to a survey by the TNS research institute. The ruling ANC party recently lost a ballot in the Western Cape for the first time, conceding their traditional stronghold to the opposition.
Xenophobic Unrest?
Ahead of next year's local elections, the ruling party is nervous, divided and embroiled in internal power struggles. The ANC leadership appears to have silenced the head of the Youth League, Julius Malema, whose hate speeches and chants fomented a climate of violence and racism. But his followers continue to pile on the pressure. Youth League functionary Loyiso Nkohla called on the ANC youth to devastate Cape Town and make it ungovernable. The mayor of the touristy city, Dan Plato, then called on Khayelitsha township residents to challenge the ANC youth with burning tires, an apartheid-period symbol of oppressive regimes. Amnesty International warned that the violent outbreaks could quickly escalate into xenophobic unrest.
There have also been repeated warnings of terrorist attacks. Press reports, citing intelligence agencies, allege evidence of planned attacks against teams from the Netherlands and Denmark, and against the US vs. England match. These reports were denied by al-Qaida. But, as a precaution, South Africa's security forces are preparing.
The lofty expectations that South Africa and the African continent have for the World Cup seem unattainable. The promised economic boom never came. Instead of the expected 480,000 foreign fans, turnout will likely number about 200,000. Particularly among other African countries, interest in the "African Cup" is running low. Ticket sales are disappointing.
No Economic Boom
Hotels, which put off customers a month ago by hiking prices to unrealistic levels, are now struggling to fill their rooms during the tournament. Tourism experts are warning that some of the newly-built luxury hotels will have to close again.
South Africa's long-hoped-for economic upswing also looks set to flop. Experts expect the World Cup to lift the economy by 0.5 percent, a reduction compared to their previous expectations.
AIDS, poverty, unemployment and violent crime are all a part of everyday life in South Africa. The country has a murder rate of 50 per day, twenty times as high as in Germany. Crime statistics document 50,000 rapes per year. Armed raids on private homes increased by 27 percent, and rose by 20 percent on registered businesses.
Against that bleak backdrop, Police Minister Nathi Mthethwa has assured the world, that for the duration of the tournament, South Africa will be the "safest city in the world". Head of the Police Bheki Cele has promised "the best security in the world."
Cape-based German Ambassador Dieter Haller added that most crime and violence "happened in places where tourists and World Cup visitors would not tend to visit." But such attempts to rationalize away the violence do little for South Africa's victims.
URL:
http://www.spiegel.de/international/world/0,1518,698538,00.html
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Peter is a gas station attendant in Springbok, the capital of South Africa's Namaqualandes region, which is famous for its wildflowers. It's only a short distance from the border with Namibia, but you get the first sense here of the football fever that's about to explode across the nation. Hardly any flags can be seen, only a few fans have decorated the mirrors of their cars in the country's colors, and there aren't many people passing through with Bafana-Bafana shirts -- Springbok is not like the big cities.
But Peter managed to get a ticket for the preliminary match between the South African national team and Uruguay on June 16 in Pretoria. "It almost ruined me financially," he says, "and I had to stand in line for a long time. But I want to be there no matter what."
On June 12, he plans to drive with two friends in a beat-up old Toyota to Loftus Vesfeld Stadium in the capital city, a trip that will take three days. "I believe our boys can go far if we just give them enough support," the hopeful young gas station attendant says. For him it's a matter of honor to pack a vuvuzela in his suitcase -- the horn prevalent with South African soccer fans that German national team trainer Joachim Löw has described as "a little irritating over time."
The host country of the 2010 World Cup is completing the last preparations for the mass football festival. The event itself is a breakthrough for South Africa, but it's also been pitched as a harbinger for a new and better future. These are the African games -- meant to liberate the whole continent from an image of war, chaos, illness and catastrophe.
"A victory for the entire continent," is what FIFA head Sepp Blatter called it when he announced in 2004 that the games would be awarded to South Africa. Nelson Mandela had tears of joy in his eyes as he proudly held up the cup, saying, "I feel like a 15-year-old."
'Let Them, Just for Four Weeks, Be Good'
On the streets of Johannesburg, Pretoria and Cape Town, one can feel some of the euphoria that sent the country into a frenzy of joy after the decision six years ago. Supermarkets are decked in the national flag, workers wear South Africa T-shirts, sales of vuvuzelas are booming.
The stadiums have been completed, new hotels and streets have been built. Cape Town Mayor Dan Plato has pledged to host the "greatest party in South African history" the night before opening match. But a number of cars on the streets also have bumper stickers reading, "Fuck FIFA."
Tension and expectations have mixed with quiet fears that the football dream could become a nightmare. Even South Africa's president, Jacob Zuma, seems not entirely free of anxiety. At a women's prayer meeting last Thursday he said: "In this time, we need good South Africans. Let them, just for four weeks, be good. Just for four weeks."
He has good reason to be concerned. Despite the flags and the gorgeous stadiums, the new streets and well-armed police, his country is more divided than ever in recent history. No nation in the world has a gulf between rich and poor as great as South Africa's.
Despite billions of euros in investments related to the 2010 World Cup, last year more than a million South Africans lost their jobs. During the first three months of this year, 171,000 entered the unemployment rolls. The official unemployment rate is over 25 percent, the highest level seen in the past five years. Unofficially, it is estimated to be closer to 40 percent.
A recent study completed by the University of South Africa concluded that 75.4 percent of South Africans fall below the poverty level -- and almost all those poor are black. "Persistent poverty, rising levels of unemployment and violent crime, together with the crisis in the public health sector," writes Amnesty International in its annual report, have contributed at least as much as corruption and nepotism to the often violent protests that have recently shaken South Africa.
Moeletsi Mbeki, brother of former South African President Thabo Mbeki, recently said: "Unlike the elite in Asia, our leaders have simply copied the exploitation mentality of their former oppressors."
Behind the Mood of Celebration, A Country Festers
The façade of a country in a celebratory mood veils a nation that is actually festering, where people are sick and tired of being fobbed off with promise after empty promise. Labor leaders haven't been shy of threatening strikes during the World Cup. "Nobody must say 'Hold on, there are visitors around, don't do anything about this matter,'" Zwelinzima Vavi, who heads the Congress of South African Trade Unions, said last Thursday. "Our struggles … are bigger than the World Cup."
Slum dwellers increasingly fight their fate. In Balfour they even shouted down Zuma, the former national hero. One in every two South Africans are unhappy with the public sector and the state's services, according to a survey by the TNS research institute. The ruling ANC party recently lost a ballot in the Western Cape for the first time, conceding their traditional stronghold to the opposition.
Xenophobic Unrest?
Ahead of next year's local elections, the ruling party is nervous, divided and embroiled in internal power struggles. The ANC leadership appears to have silenced the head of the Youth League, Julius Malema, whose hate speeches and chants fomented a climate of violence and racism. But his followers continue to pile on the pressure. Youth League functionary Loyiso Nkohla called on the ANC youth to devastate Cape Town and make it ungovernable. The mayor of the touristy city, Dan Plato, then called on Khayelitsha township residents to challenge the ANC youth with burning tires, an apartheid-period symbol of oppressive regimes. Amnesty International warned that the violent outbreaks could quickly escalate into xenophobic unrest.
There have also been repeated warnings of terrorist attacks. Press reports, citing intelligence agencies, allege evidence of planned attacks against teams from the Netherlands and Denmark, and against the US vs. England match. These reports were denied by al-Qaida. But, as a precaution, South Africa's security forces are preparing.
The lofty expectations that South Africa and the African continent have for the World Cup seem unattainable. The promised economic boom never came. Instead of the expected 480,000 foreign fans, turnout will likely number about 200,000. Particularly among other African countries, interest in the "African Cup" is running low. Ticket sales are disappointing.
No Economic Boom
Hotels, which put off customers a month ago by hiking prices to unrealistic levels, are now struggling to fill their rooms during the tournament. Tourism experts are warning that some of the newly-built luxury hotels will have to close again.
South Africa's long-hoped-for economic upswing also looks set to flop. Experts expect the World Cup to lift the economy by 0.5 percent, a reduction compared to their previous expectations.
AIDS, poverty, unemployment and violent crime are all a part of everyday life in South Africa. The country has a murder rate of 50 per day, twenty times as high as in Germany. Crime statistics document 50,000 rapes per year. Armed raids on private homes increased by 27 percent, and rose by 20 percent on registered businesses.
Against that bleak backdrop, Police Minister Nathi Mthethwa has assured the world, that for the duration of the tournament, South Africa will be the "safest city in the world". Head of the Police Bheki Cele has promised "the best security in the world."
Cape-based German Ambassador Dieter Haller added that most crime and violence "happened in places where tourists and World Cup visitors would not tend to visit." But such attempts to rationalize away the violence do little for South Africa's victims.
URL:
http://www.spiegel.de/international/world/0,1518,698538,00.html
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Tuesday, June 1, 2010
South Africa establishes new sources
The visit by South African President Jacob Zuma to Algeria a week ago gave a glimpse of an ongoing shift in the country’s oil relations with other countries. For the past decade or so, the focus has increasingly been to lessen dependency on traditional sources, while engaging new sources in Africa and elsewhere. Other considerations regarding the country’s fuel security have also come into play as oil in South Africa is fast becoming a whole new ball game.
Historically, South Africa has imported most of its crude oil from the Middle East, with a number of major multinationals such as BP, Shell, Caltex, and Total maintaining a dominant presence in the country.
Engen is another player that emerged as a domestic company when Mobil disinvested during the apartheid sanctions years. Engen has since been taken over by Malaysia’s national oil company, Petronas, with which the South African government has a close relationship.
Sasol developed into a major South African oil company in the 1960s, and in recent years into a global player. It supplies fuel-from-gas for the domestic market.
By 2001, Mossgas and Soekor were merged into state oil and gas company PetroSA in a rationalisation of the state's commercial interests in this sector.
PetroSA is involved worldwide in oil and gas exploration, while both Sasol and PetroSA are involved in importing gas and producing liquid fuels from gas.
PetroSA, alongside the Strategic Fuel Fund Association, the Central Energy Fund, and the Petroleum Agency South Africa, all play various roles relating to oil procurement, storage, exploration, marketing and distribution.
This includes managing the Saldanha Bay oil storage facility, one of the largest of its kind in the world, built in the apartheid era to counter sanctions.
Apart from exploration, PetroSA operates two offshore oil fields near Mossel Bay as well as various gas fields along the southern African coast. Multinational oil companies in South Africa also operate a well-developed refining and downstream oil industry. However, their refineries at Cape Town and Durban are ageing and becoming less competitive.
In recent years – because of geopolitical volatility in the Middle East – South Africa has worked toward reducing dependence on oil from Iran by increasing imports from Yemen, Qatar, Iraq, Kuwait, United Arab Emirates, Egypt and Saudi Arabia. At the same time, it has tried to lessen overall Middle Eastern imports and spread its sourcing increasingly to non-Middle Eastern countries.
Imports now come from African countries, South America, Russia and others.
This shift in focus has seen a number of significant oil deals being concluded recently. The first major, and controversial, was in September 2008 when President Hugo Chavez of Venezuela visited South Africa. The two countries agreed to co-operate in oil and gas exploration in Venezuela, refining Venezuelan oil at South Africa’s proposed new refinery at Coega in the Eastern Cape, investment by Venezuela’s state oil company in a local refinery and storage facilities, PetroSA sharing its gas-to-liquids technology with Venezuela, and more.
The announcement heralded another important step toward lessening South African reliance on oil from the Middle East. And there were distinct advantages for South Africa relating to the government’s concerns regarding security of oil supply as outlined in its Energy Security Master Plan for Liquid Fuels that had been released shortly before.
The South African government at the time also believed that Venezuelan oil processed by PetroSA for local consumption would help reduce domestic fuel prices.
In August 2009, during bilateral trade talks, South Africa and Angola signed a number of trade agreements, including co-operation in the oil sector. The oil agreement would allow Petro SA and Angola's Sonangol to work together in oil projects, said Angolan President Jose Eduardo dos Santos at the time.
The state-owned oil companies would work together in the areas of exploration, refining and distribution of oil, it was announced.
With Angola already challenging Nigeria as Africa's largest producer of crude oil, and having enormous hydroelectricity potential, energy was said to have been a key area of discussion. And Brazil and China, two countries with which South Africa has recently been enjoying beneficial and vastly increased trade relations, are already involved in the reconstruction of Angola, including its oil interests.
Shortly after the Angola agreement was signed, it was announced by the Industrial Development Corporation (IDC) in an economic report that South Africa’s trade with the world's four largest emerging markets - Brazil, Russia, India and China (BRIC countries) – had increased from $20.3 billion in 2001 to about $162bn in 2008. Among the bulk of these imports, excluding China, were crude oil and non-crude petroleum products.
During President Zuma’s visit to Algeria last week, he signed, among other things, a memorandum of understanding involving increased trade and co-operation between PetroSA and Algeria's Sonatrach.
PetroSA has been involved in oil production in Nigeria since 2004 and it was said some time ago that the company would be pursuing an interest in two oil blocks in the Democratic Republic of Congo (DRC).
In April, President of the Republic of Congo (Congo-Brazzaville) Denis Sassou-Nguesso announced in Pretoria that the South African company would be given oil production rights in his country.
Equatorial Guinea is another African country with which South Africa has in recent years been stepping up its trade relations, believed to also involve oil.
In addition, PetroSA and Sasol are already importing gas, mainly with a view to boosting the local gas-to-liquid fuel production. These imports will assist to extend the life of PetroSA’s gas-to-liquid refinery at Mossel Bay.
Apart from that, PetroSA has focused its natural gas exploration activities in southern Africa, and exploring for oil in Egypt, Sudan and Equatorial Guinea.
Sasol Synfuels and Qatar Petroleum (QP) signed an agreement to jointly construct an $800-million gas-to-liquids plant.
A development that is symptomatic of the changes taking place in South Africa’s oil supplies is the fact that, after years of secrecy, overriding political and security considerations and protected monopolist practices, the fuel industry in South Africa is heading for a new showdown as competing players variously promote and resist new options in a changed global and local environment.
While state-owned PetroSA wants the government to invest billions of taxpayers’ rands in a new 400 000 barrels-per-day refinery at Coega, known as the Mthombo Project, one of the largest petroleum groups active in South Africa, BP Africa, is cautioning the government against approving the refinery project of more than R77bn.
In fact, BP chief economist Christof Rëhl recently visited South Africa to promote BP’s argument that the proposed refinery would cost a great deal of money for relatively little employment and would not improve anything.
BP also argues that the costs are likely to be much more than envisaged, and that there is a surplus refinery capacity worldwide at present which is likely to be the case beyond 2020.
A new refinery now would be an unfair burden for taxpayers, the company argues, and calls for a comprehensive review of all supply-side options that could have far-reaching implications for the industry. It maintains that the surplus capacity is such that a new refinery would hardly improve South African fuel security.
But the government has so far rejected objections from oil companies such as BP. Last month, Energy Minister Dipuo Peters said the project was key to providing a solution to domestic liquid fuel challenges. According to her, it would address the gap between demand and supply, further reduce the dependence on imported finished product, and promote new standards for clean fuels.
PetroSA has also maintained that building the Coega refinery is the most sustainable solution for meeting the country's need for supply-side security and improved fuel quality. Of course, PetroSA is also concerned about the fact that it has already spent more than R250m on the project, with a further pending investment of R2.4bn to complete the front-end engineering design of the project.
On the other hand, it is widely suspected in industry circles that BP and the other large oil companies operating in South Africa have every reason to resist the competition from a new player which could cut heavily into their super profits, particularly as their conventional refineries are ageing, uncompetitive and not living up to the latest emissions standards.
Mthombo, some say, could threaten the very existence of the oil multinationals in South Africa.
On the local oil exploration front, after years of showing no interest it, it seems Petro SA’s activities, along with new foreign partners, may have prompted the oil giants into action. It has just been announced that Shell hopes to explore for oil and natural gas over an extensive area of South Africa's West Coast. With seawater depth in the proposed region ranging from 150m to about 4 000m, this is likely to be the deepest that Shell has ever prospected for oil.
Indeed, when it comes to South Africa’s oil interests, the time
s they are a changing.
Leadership http://www.leadershiponline.co.za/
http://www.leadershiponline.co.za/reports/617-oil-supply-full-report
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Historically, South Africa has imported most of its crude oil from the Middle East, with a number of major multinationals such as BP, Shell, Caltex, and Total maintaining a dominant presence in the country.
Engen is another player that emerged as a domestic company when Mobil disinvested during the apartheid sanctions years. Engen has since been taken over by Malaysia’s national oil company, Petronas, with which the South African government has a close relationship.
Sasol developed into a major South African oil company in the 1960s, and in recent years into a global player. It supplies fuel-from-gas for the domestic market.
By 2001, Mossgas and Soekor were merged into state oil and gas company PetroSA in a rationalisation of the state's commercial interests in this sector.
PetroSA is involved worldwide in oil and gas exploration, while both Sasol and PetroSA are involved in importing gas and producing liquid fuels from gas.
PetroSA, alongside the Strategic Fuel Fund Association, the Central Energy Fund, and the Petroleum Agency South Africa, all play various roles relating to oil procurement, storage, exploration, marketing and distribution.
This includes managing the Saldanha Bay oil storage facility, one of the largest of its kind in the world, built in the apartheid era to counter sanctions.
Apart from exploration, PetroSA operates two offshore oil fields near Mossel Bay as well as various gas fields along the southern African coast. Multinational oil companies in South Africa also operate a well-developed refining and downstream oil industry. However, their refineries at Cape Town and Durban are ageing and becoming less competitive.
In recent years – because of geopolitical volatility in the Middle East – South Africa has worked toward reducing dependence on oil from Iran by increasing imports from Yemen, Qatar, Iraq, Kuwait, United Arab Emirates, Egypt and Saudi Arabia. At the same time, it has tried to lessen overall Middle Eastern imports and spread its sourcing increasingly to non-Middle Eastern countries.
Imports now come from African countries, South America, Russia and others.
This shift in focus has seen a number of significant oil deals being concluded recently. The first major, and controversial, was in September 2008 when President Hugo Chavez of Venezuela visited South Africa. The two countries agreed to co-operate in oil and gas exploration in Venezuela, refining Venezuelan oil at South Africa’s proposed new refinery at Coega in the Eastern Cape, investment by Venezuela’s state oil company in a local refinery and storage facilities, PetroSA sharing its gas-to-liquids technology with Venezuela, and more.
The announcement heralded another important step toward lessening South African reliance on oil from the Middle East. And there were distinct advantages for South Africa relating to the government’s concerns regarding security of oil supply as outlined in its Energy Security Master Plan for Liquid Fuels that had been released shortly before.
The South African government at the time also believed that Venezuelan oil processed by PetroSA for local consumption would help reduce domestic fuel prices.
In August 2009, during bilateral trade talks, South Africa and Angola signed a number of trade agreements, including co-operation in the oil sector. The oil agreement would allow Petro SA and Angola's Sonangol to work together in oil projects, said Angolan President Jose Eduardo dos Santos at the time.
The state-owned oil companies would work together in the areas of exploration, refining and distribution of oil, it was announced.
With Angola already challenging Nigeria as Africa's largest producer of crude oil, and having enormous hydroelectricity potential, energy was said to have been a key area of discussion. And Brazil and China, two countries with which South Africa has recently been enjoying beneficial and vastly increased trade relations, are already involved in the reconstruction of Angola, including its oil interests.
Shortly after the Angola agreement was signed, it was announced by the Industrial Development Corporation (IDC) in an economic report that South Africa’s trade with the world's four largest emerging markets - Brazil, Russia, India and China (BRIC countries) – had increased from $20.3 billion in 2001 to about $162bn in 2008. Among the bulk of these imports, excluding China, were crude oil and non-crude petroleum products.
During President Zuma’s visit to Algeria last week, he signed, among other things, a memorandum of understanding involving increased trade and co-operation between PetroSA and Algeria's Sonatrach.
PetroSA has been involved in oil production in Nigeria since 2004 and it was said some time ago that the company would be pursuing an interest in two oil blocks in the Democratic Republic of Congo (DRC).
In April, President of the Republic of Congo (Congo-Brazzaville) Denis Sassou-Nguesso announced in Pretoria that the South African company would be given oil production rights in his country.
Equatorial Guinea is another African country with which South Africa has in recent years been stepping up its trade relations, believed to also involve oil.
In addition, PetroSA and Sasol are already importing gas, mainly with a view to boosting the local gas-to-liquid fuel production. These imports will assist to extend the life of PetroSA’s gas-to-liquid refinery at Mossel Bay.
Apart from that, PetroSA has focused its natural gas exploration activities in southern Africa, and exploring for oil in Egypt, Sudan and Equatorial Guinea.
Sasol Synfuels and Qatar Petroleum (QP) signed an agreement to jointly construct an $800-million gas-to-liquids plant.
A development that is symptomatic of the changes taking place in South Africa’s oil supplies is the fact that, after years of secrecy, overriding political and security considerations and protected monopolist practices, the fuel industry in South Africa is heading for a new showdown as competing players variously promote and resist new options in a changed global and local environment.
While state-owned PetroSA wants the government to invest billions of taxpayers’ rands in a new 400 000 barrels-per-day refinery at Coega, known as the Mthombo Project, one of the largest petroleum groups active in South Africa, BP Africa, is cautioning the government against approving the refinery project of more than R77bn.
In fact, BP chief economist Christof Rëhl recently visited South Africa to promote BP’s argument that the proposed refinery would cost a great deal of money for relatively little employment and would not improve anything.
BP also argues that the costs are likely to be much more than envisaged, and that there is a surplus refinery capacity worldwide at present which is likely to be the case beyond 2020.
A new refinery now would be an unfair burden for taxpayers, the company argues, and calls for a comprehensive review of all supply-side options that could have far-reaching implications for the industry. It maintains that the surplus capacity is such that a new refinery would hardly improve South African fuel security.
But the government has so far rejected objections from oil companies such as BP. Last month, Energy Minister Dipuo Peters said the project was key to providing a solution to domestic liquid fuel challenges. According to her, it would address the gap between demand and supply, further reduce the dependence on imported finished product, and promote new standards for clean fuels.
PetroSA has also maintained that building the Coega refinery is the most sustainable solution for meeting the country's need for supply-side security and improved fuel quality. Of course, PetroSA is also concerned about the fact that it has already spent more than R250m on the project, with a further pending investment of R2.4bn to complete the front-end engineering design of the project.
On the other hand, it is widely suspected in industry circles that BP and the other large oil companies operating in South Africa have every reason to resist the competition from a new player which could cut heavily into their super profits, particularly as their conventional refineries are ageing, uncompetitive and not living up to the latest emissions standards.
Mthombo, some say, could threaten the very existence of the oil multinationals in South Africa.
On the local oil exploration front, after years of showing no interest it, it seems Petro SA’s activities, along with new foreign partners, may have prompted the oil giants into action. It has just been announced that Shell hopes to explore for oil and natural gas over an extensive area of South Africa's West Coast. With seawater depth in the proposed region ranging from 150m to about 4 000m, this is likely to be the deepest that Shell has ever prospected for oil.
Indeed, when it comes to South Africa’s oil interests, the time
s they are a changing.
Leadership http://www.leadershiponline.co.za/
http://www.leadershiponline.co.za/reports/617-oil-supply-full-report
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Willemien Denner, a tralac Researcher, discusses trade policies and the global economic crisis: the Sub-Saharan Africa perspective.
The World Trade Organisation (WTO) estimates that world trade will expand by 9.5 percent during 2010 as the global economy starts to recover from the global financial and economic crisis. Exports from developed countries are expected to increase by 7.5 percent and exports from the rest of the world, including developing countries, by 11 percent in value terms. Although it is expected that it will take another year before world trade values reach, and even surpass the high trade values recorded for 2008, the expected recovery is a significant improvement over the 12.2 percent decline in value terms and 23 percent decline in terms of US dollars recorded for world trade in 2009.
It has been determined that the sharp decline in trade values during the global recession has not been due to an increase in protectionist measures, but rather due to a major decline in global demand. This was exacerbated by the type of products for which demand fell and the fact that the decrease in demand happened across countries and regions. However, some countries implemented more trade restrictive than trade liberalising policy measures and African countries have implemented more post-financial crisis protectionist policies than China. Thus far discriminatory measures have remained the most prominent post-crisis policy response for most African trading partners in 2010.
The 5th Global Trade Alert Report focuses on Sub-Saharan Africa and argues that most African countries have been successful in resisting the temptation to implement protectionist policies, while many of their trading partners have implemented trade restrictive and distortive measures. These include various policies ranging from financial bailouts and export subsidies to government procurement and local content requirements. However, relatively developed African countries, like South Africa, have been able to retaliate against these measures.
Although many developed countries, like Japan and the United States implemented trade restrictive and distorting policies, many emerging countries like Brazil, China and India followed suit. For the G8 countries alone there are 226 trade restrictive measures indicated in the Global Trade Alert database. These measures affect 181 trading partners and 674 tariff lines. In comparison less developed countries implemented only 21 trade restrictive measures which affect 31 trading partners and only 15 sectors.
Some African countries have also implemented fiscal stimulus plans, following in the footsteps of their developed and emerging counterparts. In Mauritius the Government provided a stimulus package for the increase in domestic demand and job creation, while Nigeria provided bailouts for 5 banks. In South Africa the Department of Trade and Industry (DTI) made loans available to distressed manufacturing sectors, including automotives and clothing and textiles while the Industrial Development Corporation (IDC) made funds available to firms in different sectors and approved loans to various companies. Some countries did not have the necessary funds available to provide fiscal packages, rather focussing on the revision of their budgets to generate additional revenue or targeted assistance programs to support only those sectors of economic importance.
Of those trade policy measures which were implemented by African countries, most have been highly discriminatory with South Africa being one of the most protectionist African countries. 65 percent of the measures South Africa implemented during and after the financial crisis have been highly discriminatory policies. Other African countries which are relatively protectionist include Egypt, Morocco, Tunisia and Kenya. What is worrying is that Africa’s traditional trade partners implemented more discriminatory and less liberalising measures. Discriminatory measures were also applied by emerging African countries and other emerging trade partners like Brazil. This can disrupt the sustainability and the real and potential benefits for African countries from their trading relationships with traditional and emerging country trading partners.
The restrictive and protectionist policies which have been followed by most of Africa’s trading partners have indicated that African countries need to broaden their production and exports. African countries were mostly affected by those measures which discriminated against their agricultural commodities entering the markets of their trade partners and third countries. The continuation and increased production and exportation of primary commodities will intensify the competitiveness problems African countries are already experiencing, while building capacity and diversifying exports to higher value products will provide countries with policy space to adapt to the impact of a financial and economic crisis and improve negotiating power in their trading relationships.
Another important consideration for African countries is the need to reduce supply-side and cost constraints. These constraints limit the ability of African countries to participate in international trade by increasing the cost of production and thus worsening the competitiveness of African countries in the global market. To increase the competitiveness of African countries urgent attention needs to be paid to infrastructural deficiencies, including roads, railroads and electricity. A reduction in these constraints can decrease the cost of production which in turn will improve market access for African goods and services.
http://www.tralac.org/cgi-bin/giga.cgi?cmd=cause_dir_news_item&cause_id=1694&news_id=87861&cat_id=1030
Source: WTO; 5th Global Trade Alert
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
It has been determined that the sharp decline in trade values during the global recession has not been due to an increase in protectionist measures, but rather due to a major decline in global demand. This was exacerbated by the type of products for which demand fell and the fact that the decrease in demand happened across countries and regions. However, some countries implemented more trade restrictive than trade liberalising policy measures and African countries have implemented more post-financial crisis protectionist policies than China. Thus far discriminatory measures have remained the most prominent post-crisis policy response for most African trading partners in 2010.
The 5th Global Trade Alert Report focuses on Sub-Saharan Africa and argues that most African countries have been successful in resisting the temptation to implement protectionist policies, while many of their trading partners have implemented trade restrictive and distortive measures. These include various policies ranging from financial bailouts and export subsidies to government procurement and local content requirements. However, relatively developed African countries, like South Africa, have been able to retaliate against these measures.
Although many developed countries, like Japan and the United States implemented trade restrictive and distorting policies, many emerging countries like Brazil, China and India followed suit. For the G8 countries alone there are 226 trade restrictive measures indicated in the Global Trade Alert database. These measures affect 181 trading partners and 674 tariff lines. In comparison less developed countries implemented only 21 trade restrictive measures which affect 31 trading partners and only 15 sectors.
Some African countries have also implemented fiscal stimulus plans, following in the footsteps of their developed and emerging counterparts. In Mauritius the Government provided a stimulus package for the increase in domestic demand and job creation, while Nigeria provided bailouts for 5 banks. In South Africa the Department of Trade and Industry (DTI) made loans available to distressed manufacturing sectors, including automotives and clothing and textiles while the Industrial Development Corporation (IDC) made funds available to firms in different sectors and approved loans to various companies. Some countries did not have the necessary funds available to provide fiscal packages, rather focussing on the revision of their budgets to generate additional revenue or targeted assistance programs to support only those sectors of economic importance.
Of those trade policy measures which were implemented by African countries, most have been highly discriminatory with South Africa being one of the most protectionist African countries. 65 percent of the measures South Africa implemented during and after the financial crisis have been highly discriminatory policies. Other African countries which are relatively protectionist include Egypt, Morocco, Tunisia and Kenya. What is worrying is that Africa’s traditional trade partners implemented more discriminatory and less liberalising measures. Discriminatory measures were also applied by emerging African countries and other emerging trade partners like Brazil. This can disrupt the sustainability and the real and potential benefits for African countries from their trading relationships with traditional and emerging country trading partners.
The restrictive and protectionist policies which have been followed by most of Africa’s trading partners have indicated that African countries need to broaden their production and exports. African countries were mostly affected by those measures which discriminated against their agricultural commodities entering the markets of their trade partners and third countries. The continuation and increased production and exportation of primary commodities will intensify the competitiveness problems African countries are already experiencing, while building capacity and diversifying exports to higher value products will provide countries with policy space to adapt to the impact of a financial and economic crisis and improve negotiating power in their trading relationships.
Another important consideration for African countries is the need to reduce supply-side and cost constraints. These constraints limit the ability of African countries to participate in international trade by increasing the cost of production and thus worsening the competitiveness of African countries in the global market. To increase the competitiveness of African countries urgent attention needs to be paid to infrastructural deficiencies, including roads, railroads and electricity. A reduction in these constraints can decrease the cost of production which in turn will improve market access for African goods and services.
http://www.tralac.org/cgi-bin/giga.cgi?cmd=cause_dir_news_item&cause_id=1694&news_id=87861&cat_id=1030
Source: WTO; 5th Global Trade Alert
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Tuesday, May 18, 2010
Rush reports to the district on his efforts to expand global energy and trade relations between the United States and the Gulf of Guinea
CHICAGO –– In a speech in Houston on Monday, U. S. Rep. Bobby L. Rush (D-IL) called on the U.S. Department of Energy and the U.S. Executive Directors of the World Bank and the African Development Bank to support the establishment of Clean Energy Research Centers and Clean Energy Equipment Financing Facilities for the Gulf of Guinea.
Rush, along with other Members of Congress who represent Houston, U. S. Rep. Sheila Jackson Lee and U. S. Rep. Al Green, jointly expressed their support for clean energy technology research and equipment exports during a congressional briefing held at the Greater Houston Partnership in collaboration with the Woodrow Wilson Center on the subject “The Impact of U.S. Energy Policy on Trade with the Gulf of Guinea.”
Houston and Chicago were recently selected as two of four American cities to participate in the World Bank Group’s Public Sector Liaison Officer Network, an organization comprised of 100 business intermediary organizations, in 80 countries, working to foster trade and investment between participating countries with the support of the World Bank Group’s products and services.
The World Bank estimates that over 150 billion cubic meters of natural gas are flared or vented annually, an amount worth approximately $30.6 billion. This volume is an amount that is equivalent to 25 percent of the United States’ gas consumption or 30 percent of the European Union’s gas consumption per year. This flaring is highly concentrated in 10 countries that, together, account for 75 percent of global emissions, with the largest flaring operations occurring in the Niger Delta region of Nigeria.
The U.S. currently imports approximately 15 percent of its oil and gas supplies from West African countries along the coast of the Gulf of Guinea. This level is expected to increase to 25% to 30% by 2020. The U.S. is also the largest importer of oil and gas from this region.
– more –
– 2 –
While the U.S. pursues an energy policy that seeks to decrease its dependence on foreign oil and decrease its contribution to global warming, it is essential that the U.S. provide support to these key strategic partners to help reduce carbon emissions and gas flaring associated with meeting our market needs while alternative sources of energy are scaled up.
The proposal seeks to replicate a $37 million Department of Energy grant to China for research centers that was matched by the grantees, resulting in $75 million in total U.S. research. Under the proposed U.S.–Gulf of Guinea Clean Energy Research Center project, the U.S. Department of Energy will provide grants to regional universities and technology centers, with matching funds from the grantee or the host country, and the African Development Bank. The research will focus on advancing technologies for building energy efficiency, carbon capture and storage, and clean energy/anti-flaring/pollution control, biomass and other alternative energy solutions.
The Members of Congress who participated in the forum have encouraged the Obama Administration to include this initiative in the U.S.-Nigeria as well as in the U.S.-Angola Bi-National Commission discussions.
Congressman Rush joined Chris Wilmot, Chairman of the Greater Houston Partnership’s World Bank Task Force, in calling on Robert Zoellick, President of the World Bank, to establish financing facilities for clean energy projects in the Gulf of Guinea that can be complimented with financing from OPIC, EXIM and the African Development Bank. These recommendations also encourage these financial institutions which receive U.S. government funding to include minority firms.
Congressman Rush also expressed his support for the establishment of the Gulf of Guinea Energy Fund. The emergence of this fund was in response to new, local content laws in the region and recommendations outlined in a 2005 Congressional Black Caucus Foundation Report that called for the establishment of new financing facilities and joint ventures between major oil companies and indigenous companies with a particular emphasis on including U.S., minority-owned firms.
The briefing was held on the first day of the Offshore Technology Conference, an event designed to engage leading government and industry representatives from Africa as well as senior executives from U.S. oil companies to help develop legislation supporting U.S. trade and energy policy toward the Gulf of Guinea region in West Africa.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Rush, along with other Members of Congress who represent Houston, U. S. Rep. Sheila Jackson Lee and U. S. Rep. Al Green, jointly expressed their support for clean energy technology research and equipment exports during a congressional briefing held at the Greater Houston Partnership in collaboration with the Woodrow Wilson Center on the subject “The Impact of U.S. Energy Policy on Trade with the Gulf of Guinea.”
Houston and Chicago were recently selected as two of four American cities to participate in the World Bank Group’s Public Sector Liaison Officer Network, an organization comprised of 100 business intermediary organizations, in 80 countries, working to foster trade and investment between participating countries with the support of the World Bank Group’s products and services.
The World Bank estimates that over 150 billion cubic meters of natural gas are flared or vented annually, an amount worth approximately $30.6 billion. This volume is an amount that is equivalent to 25 percent of the United States’ gas consumption or 30 percent of the European Union’s gas consumption per year. This flaring is highly concentrated in 10 countries that, together, account for 75 percent of global emissions, with the largest flaring operations occurring in the Niger Delta region of Nigeria.
The U.S. currently imports approximately 15 percent of its oil and gas supplies from West African countries along the coast of the Gulf of Guinea. This level is expected to increase to 25% to 30% by 2020. The U.S. is also the largest importer of oil and gas from this region.
– more –
– 2 –
While the U.S. pursues an energy policy that seeks to decrease its dependence on foreign oil and decrease its contribution to global warming, it is essential that the U.S. provide support to these key strategic partners to help reduce carbon emissions and gas flaring associated with meeting our market needs while alternative sources of energy are scaled up.
The proposal seeks to replicate a $37 million Department of Energy grant to China for research centers that was matched by the grantees, resulting in $75 million in total U.S. research. Under the proposed U.S.–Gulf of Guinea Clean Energy Research Center project, the U.S. Department of Energy will provide grants to regional universities and technology centers, with matching funds from the grantee or the host country, and the African Development Bank. The research will focus on advancing technologies for building energy efficiency, carbon capture and storage, and clean energy/anti-flaring/pollution control, biomass and other alternative energy solutions.
The Members of Congress who participated in the forum have encouraged the Obama Administration to include this initiative in the U.S.-Nigeria as well as in the U.S.-Angola Bi-National Commission discussions.
Congressman Rush joined Chris Wilmot, Chairman of the Greater Houston Partnership’s World Bank Task Force, in calling on Robert Zoellick, President of the World Bank, to establish financing facilities for clean energy projects in the Gulf of Guinea that can be complimented with financing from OPIC, EXIM and the African Development Bank. These recommendations also encourage these financial institutions which receive U.S. government funding to include minority firms.
Congressman Rush also expressed his support for the establishment of the Gulf of Guinea Energy Fund. The emergence of this fund was in response to new, local content laws in the region and recommendations outlined in a 2005 Congressional Black Caucus Foundation Report that called for the establishment of new financing facilities and joint ventures between major oil companies and indigenous companies with a particular emphasis on including U.S., minority-owned firms.
The briefing was held on the first day of the Offshore Technology Conference, an event designed to engage leading government and industry representatives from Africa as well as senior executives from U.S. oil companies to help develop legislation supporting U.S. trade and energy policy toward the Gulf of Guinea region in West Africa.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Wednesday, March 31, 2010
Former Obama Adviser John Podesta
John Podesta, 61, was White House chief of staff under President Bill Clinton and headed Barack Obama's transition team. He talks to SPIEGEL about Obama's health care reform, the new president's track record during his first year in office and what's plaguing the American political system.
SPIEGEL: Barack Obama has finally managed to push his health care bill through Congress. But can it still be considered a success after the endless debates? Some Democrats are afraid of a disaster at the midterm elections in November because many Americans are skeptical about the reform proposal.
John Podesta: It will cover more than 30 million people with health insurance. We're spending more than 17 percent of our GDP on providing health care, and yet we don't have health outcomes that are anywhere near commensurate with that, particularly compared to European systems. So it is definitely a success.
SPIEGEL: The final bill, however, is very different from Obama's initial proposals. Cost-cutting in the health care sector is no longer a priority, and more competition for the insurance companies won't be introduced.
Podesta: It is certainly better for the Democrats to get something done even if this involved compromises. They have been fighting for better health care coverage for decades, and this bill is a very significant step. Let's also remember that some of the effects of this bill will be immediate. Right now, young people just entering the job market have the highest rate of unemployment. That means they don't have health insurance. Because of this bill, their families will be able to include them on their policies. The president and members of Congress will be heading out and explaining the benefits and I think the more people hear and understand about the bill, the more they will see how remarkable it is.
SPIEGEL: Not a single Republican sees it that way, though. It's a stark contrast to big social reforms in the 1960s, such as Medicare or Medicaid.
Podesta: I don't think you can say that the president did not try as hard as he could to engage Republicans -- and let's remember that the final legislation had over 200 Republican amendments included. But, at the end of the day, the Republicans were unwilling to help, and he was not going to let them prevent him from fulfilling his commitment. There is no doubt that the Republicans will campaign against the bill but, in doing so, they risk becoming simply the party of no.
SPIEGEL: Wasn't that predictable, though? As Bill Clinton's former chief of staff, you know how contentious health care debates can get -- and how fierce Republican resistance can be.
Podesta: Obama was trying to at least reach out to Republicans. But they pulled back again. That surprised him.
SPIEGEL: Many people have a different theory. This president is still popular personally, they argue, but members of Congress don't seem to be willing to follow him.
Podesta: I think that's natural. I saw similar things when I worked for President Clinton. President Bush had success with his party when he was asking them to do easy things. If you walk up to Capitol Hill and say "Please cut everyone's taxes," they'll be very happy to oblige you.
SPIEGEL: Do you think that Obama was too detached in the health care reform process?
Podesta: Quite the contrary: He got too entwined in these negotiations. So the story was all about the sausage-making and not about what he was trying to deliver and how it fit in with the other things he was trying to get done. The public lost a sense of what the big story was. He stopped making the case to the country about how his different reform elements fit together.
SPIEGEL: So he was more of a prime minister than a president?
Podesta: He has got to stop being the prime minister. Obama needs to project the strong power he has as the US president and use his cabinet more effectively.
SPIEGEL: Was it a mistake for Obama to go for the "Big Bang," to try several big reforms simultaneously in his first year?
Podesta: No. The analysis he proceeded from was that unless you could get these strong foundations by attending to the things that needed reform in the US economy, you couldn't have strong sustainable growth. What perhaps surprised the people in the White House was how long the health care debate took and how little real support there was from the Republican Party.
'Obama Already Has a Lot of Authority'
SPIEGEL: Why is it so hard for the Democrats to get their act together? The majorities, in a way, are there. But we are seeing a lot of infighting within the Democratic Party.
Podesta: Obama represents the mainstream of the Democratic Party; there are outliers on both the left and the center-right. And the US process is one of persuasion rather than a parliamentary discipline that comes in a European system. He has got to convince the members of Congress. They're independent actors. They run for election and reelection on their own.
SPIEGEL: What are some of the lessons Obama could draw from the Clinton years? He could face a drubbing in the midterm elections similar to the one Bill Clinton experienced in 1994.
Podesta: He will lose seats but not Congress. However, my advice for him is: Work all the levers of your power. Don't just view your job as working with Capitol Hill to pass legislation. There are 2 million people who work for the president of the United States. Look at clean energy: It needs legislation, but Obama already has a lot of authority to do things that he could be doing. And I think that's what Clinton did. He did it when he had Democrats in power. He did it when we had Republicans in power.
SPIEGEL: Could the lessons include firing staff at the White House? There is much talk right now about the divide between pragmatists, such as his chief of staff, Rahm Emanuel, who want to get things done and idealists, such as chief strategist David Axelrod, who would like to preserve the message of change.
Podesta: We can agree on one thing: The White House staff is overexposed. I don't think we need any more profiles of any more staff people. I don't think that helps the president, and I think they know that as well. I think the president still has confidence in his team. I would be surprised if, at this moment, he shook the staff up in a substantial way.
SPIEGEL: But is there a real divide at the White House between idealists and pragmatists?
Podesta: There are people like Rahm Emanuel, who -- by style, by temperament, by experience -- is focused on getting things done. Some of the other people who campaigned with the president are encouraging him more to not compromise on the things that he ran on. But, ultimately, these are the president's decisions.
SPIEGEL: Many Americans feel that Washington is "broken." They see standstill in institutions like the Senate. Does the US need to have a debate about the American political system?
Podesta: What we now have is essentially a parliamentary system in which every vote is a vote of no confidence, with no majority rule. That's not a prescription for good governance. It is the result of use and misuse of the filibuster, the instrument to stop any debate with 41 votes in the Senate. (Editor's note: For debate on a measure before the US Senate to be closed, thereby allowing a vote on it to take place, three-fifths of the senators -- usually 60 of 100 senators -- need to call for the debate to be closed. If the minority party has 41 or more senators, it can delay or prevent a vote by extending the debate indefinitely in a so-called filibuster.)
SPIEGEL: That hasn't always been the case.
Podesta: I spent the earlier part of my career working in the Senate and, at that time, filibusters were rare. They were used for issues that senators felt were really aimed at fundamental constitutional principles -- like civil rights. They happened, but when people actually filibustered, they stayed in the Senate around the clock and debated.
SPIEGEL: Now senators simply announce their intention to file for a filibuster, which is often enough of a threat to block legislation.
Podesta: That's why it is now used on virtually everything that comes to the floor of the Senate, including even the ability to confirm people to serve in public office. Nominees for key positions in government are being held up with threats of filibusters, and I think that is dysfunctional. In the middle of the financial crisis, Obama could not appoint the leading civil servants in the Treasury Department for more than a year because of such opposition.
SPIEGEL: Has the partisanship in Washington gotten worse since the Clinton years?
Podesta: It's worse today than it was then. We were able to get some things done with bipartisan support.
SPIEGEL: Why is that?
Podesta: Because of the redistricting of our constituencies, the most partisan representatives now tend to occupy large chunks of districts, particularly in the House of Representatives. Another factor is the "permanent campaign" most parliamentarians need to engage in now. The influence of money is also to blame, as well as the polarization of the media. The Americans in the middle are desperately looking for somebody to fix the system. They have shifted back and forth in recent elections because they're so frustrated with the incapacity of government in Washington.
'There's Too Much Money in Politics'
SPIEGEL: New groupings, such as the Tea Party movement, thrive on that. They are against big government above all else. Right after the financial crisis, government seemed to be more popular in the US. A Newsweek cover read: "We Are All Socialists Now." That feeling has evaporated quickly. Why?
Podesta: I don't think the American public was ever in favor of a kind of social democracy on a Scandinavian scale. What surprises and disappoints me was that the failure of markets and the failure to regulate the financial system have not been internalized by the public. They don't seem to have realized that the counterpoint to the greed and excess that those markets produced is a strong government.
SPIEGEL: Has that been internalized by the White House? We can see the massive influence of money in Washington. How willing is Obama to attack the system?
Podesta: Obama has been willing to attack it. But his message gets confused because, even in attacking the system, you have to create a basic level of financial stability, so that the whole economy doesn't go over the cliff. The public saw that all the bailout money went to the very firms that created the mess. It confused them. But the question is: Did we have a different option?
SPIEGEL: Many Americans, though, feel bitter that money also buys access in Washington. Well-connected industry groups shower politicians in Washington with billions of dollars each year.
Podesta: We've been after this for 30 years, and it just gets worse and worse. Obama put in very strong ethical provisions to try to push out the influence of lobbyists. But, today, on health care, on financial regulatory reform, the lobbying business is still a growth business.
SPIEGEL: How would you discuss that with your own brother Tony, who runs a very successful lobbying firm here in Washington?
Podesta: He does what he does. I think there's too much money in politics -- and the influence of lobbyists -- and this need for raising tremendous amounts of money through special interests in order to run campaigns -- is corrosive.
SPIEGEL: Let's look at foreign policy. Many observers say Obama has been even less effective on the global stage than at home.
Podesta: I disagree. He established quite a good record, particularly for a first-year president. He took a difficult decision in Afghanistan. He kept support for that amongst his NATO allies. He got the Pakistani government more aligned to go after certain elements of al-Qaida and the Taliban in Pakistan and used drones in the region efficiently to hunt down terrorists. The pressure to increase sanctions on Iran is an ongoing process, but it's still one that he's played intelligently.
SPIEGEL: But there is a lack of any progress in crucial areas like the Middle East.
Podesta: True. Obama's effort there has not produced anything that looks like it's got a coherent, end-game, positive result associated with it.
SPIEGEL: And he has no genuine friends among global leaders in spite of his popularity abroad. He does not seem to care about building close relationships.
Podesta: His style is certainly different from George W. Bush, who wanted to be liked and really developed deep personal relationships. But if you have the wrong foreign policy and good personal relations, you end up with bad results. And if you have the right foreign policy, a strong team to implement it, and thinner personal relations, you're more likely to have very good results.
SPIEGEL: Europeans were also dismayed that Obama did not push for more progress on climate change at last December's summit in Copenhagen.
Podesta: I'm a glass half-full guy when it comes to climate change.
SPIEGEL: How so?
Podesta: The dialogue running up to Copenhagen, particularly on the European side, was sort of unrealistic. It didn't align by largely working off the fulcrum of Kyoto. The Copenhagen framework aligned the global system and led to the emergence of sort of basic negotiation means. It will allow the big developing countries to participate in a clean energy reduction strategy. You did have substantial commitments made by China, by India, by Brazil, by Indonesia in advance of Copenhagen. They're on board.
SPIEGEL: But the US, with its huge emissions output, still needs to lead.
Podesta: Global progress depends on the United States' continuing to make progress on reducing its emissions. That ultimately requires legislation to pass the Senate.
SPIEGEL: That means a change to the famous American way of life. In the current political environment, is it possible to ask Americans to make sacrifices? The numbers supporting climate change legislation are dropping.
Podesta: That's not true. The numbers who think that climate change is a top priority problem and even the numbers who think that climate change is caused by human activity are dropping. But the support for strong intervention to change the way we consume and use energy and move to a clean energy future hasn't changed. You use the word "sacrifice." I use the word "opportunity."
Interview conducted by Gregor Peter Schmitz
URL:
http://www.spiegel.de/international/world/0,1518,686218,00.html
SPIEGEL: Barack Obama has finally managed to push his health care bill through Congress. But can it still be considered a success after the endless debates? Some Democrats are afraid of a disaster at the midterm elections in November because many Americans are skeptical about the reform proposal.
John Podesta: It will cover more than 30 million people with health insurance. We're spending more than 17 percent of our GDP on providing health care, and yet we don't have health outcomes that are anywhere near commensurate with that, particularly compared to European systems. So it is definitely a success.
SPIEGEL: The final bill, however, is very different from Obama's initial proposals. Cost-cutting in the health care sector is no longer a priority, and more competition for the insurance companies won't be introduced.
Podesta: It is certainly better for the Democrats to get something done even if this involved compromises. They have been fighting for better health care coverage for decades, and this bill is a very significant step. Let's also remember that some of the effects of this bill will be immediate. Right now, young people just entering the job market have the highest rate of unemployment. That means they don't have health insurance. Because of this bill, their families will be able to include them on their policies. The president and members of Congress will be heading out and explaining the benefits and I think the more people hear and understand about the bill, the more they will see how remarkable it is.
SPIEGEL: Not a single Republican sees it that way, though. It's a stark contrast to big social reforms in the 1960s, such as Medicare or Medicaid.
Podesta: I don't think you can say that the president did not try as hard as he could to engage Republicans -- and let's remember that the final legislation had over 200 Republican amendments included. But, at the end of the day, the Republicans were unwilling to help, and he was not going to let them prevent him from fulfilling his commitment. There is no doubt that the Republicans will campaign against the bill but, in doing so, they risk becoming simply the party of no.
SPIEGEL: Wasn't that predictable, though? As Bill Clinton's former chief of staff, you know how contentious health care debates can get -- and how fierce Republican resistance can be.
Podesta: Obama was trying to at least reach out to Republicans. But they pulled back again. That surprised him.
SPIEGEL: Many people have a different theory. This president is still popular personally, they argue, but members of Congress don't seem to be willing to follow him.
Podesta: I think that's natural. I saw similar things when I worked for President Clinton. President Bush had success with his party when he was asking them to do easy things. If you walk up to Capitol Hill and say "Please cut everyone's taxes," they'll be very happy to oblige you.
SPIEGEL: Do you think that Obama was too detached in the health care reform process?
Podesta: Quite the contrary: He got too entwined in these negotiations. So the story was all about the sausage-making and not about what he was trying to deliver and how it fit in with the other things he was trying to get done. The public lost a sense of what the big story was. He stopped making the case to the country about how his different reform elements fit together.
SPIEGEL: So he was more of a prime minister than a president?
Podesta: He has got to stop being the prime minister. Obama needs to project the strong power he has as the US president and use his cabinet more effectively.
SPIEGEL: Was it a mistake for Obama to go for the "Big Bang," to try several big reforms simultaneously in his first year?
Podesta: No. The analysis he proceeded from was that unless you could get these strong foundations by attending to the things that needed reform in the US economy, you couldn't have strong sustainable growth. What perhaps surprised the people in the White House was how long the health care debate took and how little real support there was from the Republican Party.
'Obama Already Has a Lot of Authority'
SPIEGEL: Why is it so hard for the Democrats to get their act together? The majorities, in a way, are there. But we are seeing a lot of infighting within the Democratic Party.
Podesta: Obama represents the mainstream of the Democratic Party; there are outliers on both the left and the center-right. And the US process is one of persuasion rather than a parliamentary discipline that comes in a European system. He has got to convince the members of Congress. They're independent actors. They run for election and reelection on their own.
SPIEGEL: What are some of the lessons Obama could draw from the Clinton years? He could face a drubbing in the midterm elections similar to the one Bill Clinton experienced in 1994.
Podesta: He will lose seats but not Congress. However, my advice for him is: Work all the levers of your power. Don't just view your job as working with Capitol Hill to pass legislation. There are 2 million people who work for the president of the United States. Look at clean energy: It needs legislation, but Obama already has a lot of authority to do things that he could be doing. And I think that's what Clinton did. He did it when he had Democrats in power. He did it when we had Republicans in power.
SPIEGEL: Could the lessons include firing staff at the White House? There is much talk right now about the divide between pragmatists, such as his chief of staff, Rahm Emanuel, who want to get things done and idealists, such as chief strategist David Axelrod, who would like to preserve the message of change.
Podesta: We can agree on one thing: The White House staff is overexposed. I don't think we need any more profiles of any more staff people. I don't think that helps the president, and I think they know that as well. I think the president still has confidence in his team. I would be surprised if, at this moment, he shook the staff up in a substantial way.
SPIEGEL: But is there a real divide at the White House between idealists and pragmatists?
Podesta: There are people like Rahm Emanuel, who -- by style, by temperament, by experience -- is focused on getting things done. Some of the other people who campaigned with the president are encouraging him more to not compromise on the things that he ran on. But, ultimately, these are the president's decisions.
SPIEGEL: Many Americans feel that Washington is "broken." They see standstill in institutions like the Senate. Does the US need to have a debate about the American political system?
Podesta: What we now have is essentially a parliamentary system in which every vote is a vote of no confidence, with no majority rule. That's not a prescription for good governance. It is the result of use and misuse of the filibuster, the instrument to stop any debate with 41 votes in the Senate. (Editor's note: For debate on a measure before the US Senate to be closed, thereby allowing a vote on it to take place, three-fifths of the senators -- usually 60 of 100 senators -- need to call for the debate to be closed. If the minority party has 41 or more senators, it can delay or prevent a vote by extending the debate indefinitely in a so-called filibuster.)
SPIEGEL: That hasn't always been the case.
Podesta: I spent the earlier part of my career working in the Senate and, at that time, filibusters were rare. They were used for issues that senators felt were really aimed at fundamental constitutional principles -- like civil rights. They happened, but when people actually filibustered, they stayed in the Senate around the clock and debated.
SPIEGEL: Now senators simply announce their intention to file for a filibuster, which is often enough of a threat to block legislation.
Podesta: That's why it is now used on virtually everything that comes to the floor of the Senate, including even the ability to confirm people to serve in public office. Nominees for key positions in government are being held up with threats of filibusters, and I think that is dysfunctional. In the middle of the financial crisis, Obama could not appoint the leading civil servants in the Treasury Department for more than a year because of such opposition.
SPIEGEL: Has the partisanship in Washington gotten worse since the Clinton years?
Podesta: It's worse today than it was then. We were able to get some things done with bipartisan support.
SPIEGEL: Why is that?
Podesta: Because of the redistricting of our constituencies, the most partisan representatives now tend to occupy large chunks of districts, particularly in the House of Representatives. Another factor is the "permanent campaign" most parliamentarians need to engage in now. The influence of money is also to blame, as well as the polarization of the media. The Americans in the middle are desperately looking for somebody to fix the system. They have shifted back and forth in recent elections because they're so frustrated with the incapacity of government in Washington.
'There's Too Much Money in Politics'
SPIEGEL: New groupings, such as the Tea Party movement, thrive on that. They are against big government above all else. Right after the financial crisis, government seemed to be more popular in the US. A Newsweek cover read: "We Are All Socialists Now." That feeling has evaporated quickly. Why?
Podesta: I don't think the American public was ever in favor of a kind of social democracy on a Scandinavian scale. What surprises and disappoints me was that the failure of markets and the failure to regulate the financial system have not been internalized by the public. They don't seem to have realized that the counterpoint to the greed and excess that those markets produced is a strong government.
SPIEGEL: Has that been internalized by the White House? We can see the massive influence of money in Washington. How willing is Obama to attack the system?
Podesta: Obama has been willing to attack it. But his message gets confused because, even in attacking the system, you have to create a basic level of financial stability, so that the whole economy doesn't go over the cliff. The public saw that all the bailout money went to the very firms that created the mess. It confused them. But the question is: Did we have a different option?
SPIEGEL: Many Americans, though, feel bitter that money also buys access in Washington. Well-connected industry groups shower politicians in Washington with billions of dollars each year.
Podesta: We've been after this for 30 years, and it just gets worse and worse. Obama put in very strong ethical provisions to try to push out the influence of lobbyists. But, today, on health care, on financial regulatory reform, the lobbying business is still a growth business.
SPIEGEL: How would you discuss that with your own brother Tony, who runs a very successful lobbying firm here in Washington?
Podesta: He does what he does. I think there's too much money in politics -- and the influence of lobbyists -- and this need for raising tremendous amounts of money through special interests in order to run campaigns -- is corrosive.
SPIEGEL: Let's look at foreign policy. Many observers say Obama has been even less effective on the global stage than at home.
Podesta: I disagree. He established quite a good record, particularly for a first-year president. He took a difficult decision in Afghanistan. He kept support for that amongst his NATO allies. He got the Pakistani government more aligned to go after certain elements of al-Qaida and the Taliban in Pakistan and used drones in the region efficiently to hunt down terrorists. The pressure to increase sanctions on Iran is an ongoing process, but it's still one that he's played intelligently.
SPIEGEL: But there is a lack of any progress in crucial areas like the Middle East.
Podesta: True. Obama's effort there has not produced anything that looks like it's got a coherent, end-game, positive result associated with it.
SPIEGEL: And he has no genuine friends among global leaders in spite of his popularity abroad. He does not seem to care about building close relationships.
Podesta: His style is certainly different from George W. Bush, who wanted to be liked and really developed deep personal relationships. But if you have the wrong foreign policy and good personal relations, you end up with bad results. And if you have the right foreign policy, a strong team to implement it, and thinner personal relations, you're more likely to have very good results.
SPIEGEL: Europeans were also dismayed that Obama did not push for more progress on climate change at last December's summit in Copenhagen.
Podesta: I'm a glass half-full guy when it comes to climate change.
SPIEGEL: How so?
Podesta: The dialogue running up to Copenhagen, particularly on the European side, was sort of unrealistic. It didn't align by largely working off the fulcrum of Kyoto. The Copenhagen framework aligned the global system and led to the emergence of sort of basic negotiation means. It will allow the big developing countries to participate in a clean energy reduction strategy. You did have substantial commitments made by China, by India, by Brazil, by Indonesia in advance of Copenhagen. They're on board.
SPIEGEL: But the US, with its huge emissions output, still needs to lead.
Podesta: Global progress depends on the United States' continuing to make progress on reducing its emissions. That ultimately requires legislation to pass the Senate.
SPIEGEL: That means a change to the famous American way of life. In the current political environment, is it possible to ask Americans to make sacrifices? The numbers supporting climate change legislation are dropping.
Podesta: That's not true. The numbers who think that climate change is a top priority problem and even the numbers who think that climate change is caused by human activity are dropping. But the support for strong intervention to change the way we consume and use energy and move to a clean energy future hasn't changed. You use the word "sacrifice." I use the word "opportunity."
Interview conducted by Gregor Peter Schmitz
URL:
http://www.spiegel.de/international/world/0,1518,686218,00.html
Tuesday, March 30, 2010
President Obama outlines strategy to boost US exports -- and jobs
President Obama moved Thursday to create a high-level team to promote US exports, with the goal of creating 2 million jobs within the next five years.
The project will span from efforts to reduce hurdles for companies in shipping goods overseas, to adjusting trade policy with a blend of carrots (a push for new free-trade agreements) and sticks (tougher enforcement of trade rules). The near-term goal is to double US exports within five years.
"For the first time, the United States of America is launching a single, comprehensive strategy to promote American exports," Mr. Obama told the annual conference of the Export-Import Bank, an institution in Washington designed to promote US trade.
Getting that many more jobs from exports won't be easy, but new efforts on trade are very much needed, economists say. The most obvious reason is that America needs more jobs, at a time when consumer demand at home remains tepid. A second reason is that the world economy continues to become more competitive, which means that the US can't rest on its laurels as the world’s leading exporter of goods and services.
"Ninety-five percent of the world’s customers and the world’s fastest-growing markets are outside our borders. We need to compete for those customers. Because other nations are," Obama said. "We need to up our game."
Obama outlined a multipart "national export initiative":
• He signed an executive order "instructing the federal government to use every available federal resource" to boost exports. The order created an "export promotion cabinet," made up of the secretaries of State, Treasury, Agriculture, Commerce, and Labor, plus the US trade representative and other officials.
• He revived a separate body, called the President’s Export Council, and named Boeing CEO Jim McNerney and Xerox CEO Ursula Burns as co-chairs. The panel will make recommendations on trade policy.
• Multiple cabinet departments will help create a "one-stop shop" for small employers that want help identifying opportunities and setting up operations overseas. The effort would include embassies and consulates abroad, as well as agencies like the Departments of Agriculture and Commerce.
• Obama pledged to promote new free-trade agreements while also enforcing laws on the books, such as intellectual-property rights. "China moving to a more market-oriented exchange rate would make an essential contribution" to a more-balanced global economy, he said. That move could also help narrow the large gap by which US imports exceed exports.
• The administration will increase access to trade financing. Obama commended efforts by the Export-Import Bank over the past year to step up its activities when US credit markets were impaired.
In addition, Obama pledged to be a kind of salesman in chief for US companies, with him and his cabinet members plugging the virtues of "made in America" when they travel overseas. Next week, the president will take his export evangelism to Indonesia and Australia.
The announcement about export strategy came as a government report showed a narrower-than-expected trade deficit for the US in January. Imports exceeded exports by $37.3 billion, with the volume of oil and automobile imports falling for the month.
Obama first announced the goal of doubling exports within five years during his State of the Union address to Congress in January.
Some economists, running the numbers, have said it's a difficult objective to reach.
"During the last 25 years nominal exports never grew this quickly in five years; it took an average of 11 years for exports to double," economist Sven Jari Stehn wrote in an analysis for Goldman Sachs.
Hitting the goal, he estimated, would require a combination of strong global economic growth and an adjustment of the dollar's value relative to currencies such as China's yuan.
"If global real GDP grew by an above-consensus 4.5 percent during the next five years, the dollar would still need to depreciate by about 30 percent, slightly more than the largest 5-year real depreciation on record during the last 25 years," Mr. Stehn concluded.
This doesn't mean that Obama's target is unreachable, however. And efforts to boost exports and achieve a more-balanced global economy could bring benefits even if his goal isn't reached.
By Mark Trumbull, Staff writer / March 11, 2010 The Christian Science Monitor
The project will span from efforts to reduce hurdles for companies in shipping goods overseas, to adjusting trade policy with a blend of carrots (a push for new free-trade agreements) and sticks (tougher enforcement of trade rules). The near-term goal is to double US exports within five years.
"For the first time, the United States of America is launching a single, comprehensive strategy to promote American exports," Mr. Obama told the annual conference of the Export-Import Bank, an institution in Washington designed to promote US trade.
Getting that many more jobs from exports won't be easy, but new efforts on trade are very much needed, economists say. The most obvious reason is that America needs more jobs, at a time when consumer demand at home remains tepid. A second reason is that the world economy continues to become more competitive, which means that the US can't rest on its laurels as the world’s leading exporter of goods and services.
"Ninety-five percent of the world’s customers and the world’s fastest-growing markets are outside our borders. We need to compete for those customers. Because other nations are," Obama said. "We need to up our game."
Obama outlined a multipart "national export initiative":
• He signed an executive order "instructing the federal government to use every available federal resource" to boost exports. The order created an "export promotion cabinet," made up of the secretaries of State, Treasury, Agriculture, Commerce, and Labor, plus the US trade representative and other officials.
• He revived a separate body, called the President’s Export Council, and named Boeing CEO Jim McNerney and Xerox CEO Ursula Burns as co-chairs. The panel will make recommendations on trade policy.
• Multiple cabinet departments will help create a "one-stop shop" for small employers that want help identifying opportunities and setting up operations overseas. The effort would include embassies and consulates abroad, as well as agencies like the Departments of Agriculture and Commerce.
• Obama pledged to promote new free-trade agreements while also enforcing laws on the books, such as intellectual-property rights. "China moving to a more market-oriented exchange rate would make an essential contribution" to a more-balanced global economy, he said. That move could also help narrow the large gap by which US imports exceed exports.
• The administration will increase access to trade financing. Obama commended efforts by the Export-Import Bank over the past year to step up its activities when US credit markets were impaired.
In addition, Obama pledged to be a kind of salesman in chief for US companies, with him and his cabinet members plugging the virtues of "made in America" when they travel overseas. Next week, the president will take his export evangelism to Indonesia and Australia.
The announcement about export strategy came as a government report showed a narrower-than-expected trade deficit for the US in January. Imports exceeded exports by $37.3 billion, with the volume of oil and automobile imports falling for the month.
Obama first announced the goal of doubling exports within five years during his State of the Union address to Congress in January.
Some economists, running the numbers, have said it's a difficult objective to reach.
"During the last 25 years nominal exports never grew this quickly in five years; it took an average of 11 years for exports to double," economist Sven Jari Stehn wrote in an analysis for Goldman Sachs.
Hitting the goal, he estimated, would require a combination of strong global economic growth and an adjustment of the dollar's value relative to currencies such as China's yuan.
"If global real GDP grew by an above-consensus 4.5 percent during the next five years, the dollar would still need to depreciate by about 30 percent, slightly more than the largest 5-year real depreciation on record during the last 25 years," Mr. Stehn concluded.
This doesn't mean that Obama's target is unreachable, however. And efforts to boost exports and achieve a more-balanced global economy could bring benefits even if his goal isn't reached.
By Mark Trumbull, Staff writer / March 11, 2010 The Christian Science Monitor
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