Completed as part of a final project for Campaigns and Political Activism (GOVT-596), American University, Fall 2009

The Governor’s Race as a National Referendum

Following his double-digit victory in Virginia’s 2009 gubernatorial election, Republican Bob McDonnell, the state’s former attorney general, made note of an essential voting bloc in his winning coalition: “A lot of independent voters, and Republicans as well, clearly told me they were very concerned about the direction of the country.”[1] In a simple statement, McDonnell acknowledged the stimulus his campaign received from the national debate on policies such as energy and health care. In fact, McDonnell’s use of the frame “very concerned about the direction of the country” was a conscious mechanism to criticize the Democratic Party and the Obama White House without implicating them by name. One of keys to McDonnell’s convincing victory was his campaign’s ability to nationalize the Virginia race and tie Democrat Creigh Deeds to his party’s actions on Pennsylvania Avenue.

Hanging over McDonnell’s victory is the fact that it has been more than 30 years since Virginian voters elected a governor from the same party as the president elected the year before. For example, Republicans George Allen and Jim Gilmore ascended to the governorship after President Clinton’s victories in 1992 and 1996. Later, Democrats Mark Warner and Tim Kaine won in the years following President George W. Bush’s triumphs in 2000 and 2004. University of Virginia political analyst Larry Sabato asserts that the minority party, left without government authority, is more motivated and aggressive in the year after electoral defeats. Moreover, Americans are unlikely to award one party by concentrating power in their camp over successive election cycles. George Mason University political analyst Stephen Farnsworth adds, “The party that loses the presidential election immediately wants to prove it is relevant and it is back—the party that controls the White House has to play defense in a Virginia governor’s race.”[2]

While the unpopularity of President Bush was an invaluable asset for the campaigns of Tim Kaine and Senator Jim Webb, it was difficult to imagine a successful campaign partially grounded in opposition to Democratic policies in the wake of President Obama’s exhilarating victory in 2008. Obama had captured Virginia by more than six percentage points, riding increased turnout among African-American and youth voters to the first Democratic presidential win in the state since 1964. The profile of the relatively conservative Creigh Deeds, however, did not energize these important Democratic constituencies in the way Obama’s campaign had done so effectively.[3] Recognizing that the electorate for the gubernatorial race was not going to mirror the variety that constituted the 2008 election, the McDonnell campaign rigorously appealed to suburban and independent voters in hopes of capitalizing on the angst over controversial reform measures in Washington. It did not hurt that events concerning national policy were taking place across the Potomac River from Virginia. Newspapers and television broadcasts covering Capitol Hill and the White House saturated Virginia markets.

Glen Bolger, McDonnell’s chief pollster, admitted that President Obama and Democratic control of Washington played a role in the campaign’s victory. “…Voters still like Obama personally, but they have significant doubts about his policies, particularly on fiscal issues and the size of government. Bob found a very receptive response from swing voters when he would talk about policies that hurt jobs, spending, and taxes.” A Washington Post political survey conducted one week before the election found that Obama maintained a 54 percent approval rating in state. Yet, 53 percent opposed the health care reform plans developed by the administration and Congress.[4] Election results revealed that McDonnell was the favored candidate of two-thirds of independent voters, propelling the Republican to victory in the Northern Virginia counties of Fairfax, Loudoun, and Prince William—all won by Obama in 2008.[5] With Democrats in charge of both houses of Congress and the White House, and their approval ratings dropping consistently, the national mood shifted against federal spending, stimulus plans, and bank bailouts. That toxic dynamic went a long way in undermining the Deeds campaign.

In pursuit of a strategy that tied Deeds to Democrats in Washington, McDonnell remained on the offensive throughout many of the televised debates. He repeatedly pressed Deeds to take a position on “federal measures that would limit greenhouse gas emissions and make it easier for unions to organize, both of which McDonnell said would hurt state businesses.” McDonnell’s attacks wisely connected unpopular national policies with their possible effects on Virginia’s economy.[6] He wanted to impress upon voters that electing Deeds would essentially certify the heavy-handedness of Obama’s economic and spending plans. McDonnell understood that Deeds’ natural constituency in southwestern Virginia would not be content if the Democrat embraced the more liberal positions of Obama, House Speaker Nancy Pelosi, and Majority Leader Harry Reid. The health care reform debate was of particular importance to the governor’s race, with McDonnell and his Republican associates invoking the danger of “socialized medicine” as a form of encroaching government authority.

Bob McDonnell liked to remind his audiences that a governor must resist federal actions that may harm a state. He promised Virginia voters that he would stand up against measures such as a cap-and-trade initiative and a union-backed “card check” program. McDonnell argued that these legislative measures would limit economic growth and cut off transparency in labor practices. Conversely, Deeds was in a precarious position from the start of the race, having to balance the enthusiasm for Obama’s agenda among his liberal supporters with the pragmatic outlook of Democratic-leaning business leaders opposed to increased regulations. Thus, receiving the endorsement of prominent Democratic businesswoman Sheila Johnson was evidence that McDonnell’s impressive record in the private sector swayed some who were wary of Deeds’ connections to national Democratic leaders. Johnson is a giant of the entertainment and hospitality industry, and is well-known in Washington circles.[7]

The “nationalization” of the Virginia governor’s race benefited the McDonnell campaign because it handcuffed Deeds’ ability to paint himself as an independent Democrat focused on strictly state issues. True or not, the perception of Deeds as a puppet for congressional policies fit well with the souring environment for Democrats nationwide.

[2] Chelyen Davis, “Bringing national issues to Virginia,” Fredericksburg.com, 4 October, 2009, http://fredericksburg.com/News/FLS/2009/102009/10042009/498048/index_html?page=1.

[3] Aaron Blake, “Dems ponder drop in black voter turnout,” The Hill, 14 October, 2009, http://thehill.com/homenews/campaign/62967-democrats-ponder-a-big-drop-in-turnout-among-black-voters.

[4] “Washington Post Virginia Governor’s Race Poll,” Washingtonpost.com, 26 October, 2009, http://www.washingtonpost.com/wp-srv/politics/polls/postpoll_102709.html.

[5] Fred Backus, “McDonnell Won Due to Turnout, Independents,” CBS News: Political Hotsheet, 3 November, 2009, http://www.cbsnews.com/blogs/2009/11/03/politics/politicalhotsheet/entry5516020.shtml.

[6] Rosalind S. Helderman, “National Agenda Pushed In Debate,” Washingtonpost.com, 26 July, 2009, http://www.washingtonpost.com/wp-dyn/content/article/2009/07/25/AR2009072501991_2.html?sid=ST2009072502461.

[7] Andy Barr, “BET co-founder endorses Bob McDonnell for Virginia governor,” Politico.com, 20 July, 2009, http://www.politico.com/news/stories/0709/25180.html.

Finance Ministry has floated a new committee to study foreign investment in India.

• To review the existing policy on foreign inflows, other than Foreign Direct Investment (FDI), such as foreign portfolio investments by Foreign institutional investors (FIIs)/ Non Resident Indians (NRIs) and other foreign investments like Foreign Venture Capital Investor (FVCI) and Private equity entities and suggesting rationalisation of the same with a view to encourage foreign investment and reducing policy hurdles in this regard while maintaining the Know Your Customer (KYC) requirements. 
• To identify challenges in meeting the financing needs of the lndian economy through the foreign investment. Foreign investment for this purpose to be understood broadly and can include investment in listed and unlisted equity, derivatives and debt including the markets for government bonds, corporate bonds and external commercial borrowings. 
• To study the arrangements relating to the use of Participatory Notes and suggest any change in the policy if required from KYC and other point of view. 
• To reexamine the rationale of taxation of transactions through the STT and stamp duty. 
• To review the legal and regulatory framework of foreign investment in order to identify specific bottlenecks impeding the servicing of these financing needs. 
• To suggest specific short, medium and long term legal, regulatory and other policy change; in respect to foreign investment keeping in view of the suggestions expert committee reports such as the Committee on Fuller Capital Account Convertibility, the Committee on Financial Sector Reforms and the High Powered Expert Committee on Making Mumbai an lnternational Financial Centre.

I don’t understand but there is no member from RBI. Why should this be? I think I already know the recommendations of the committee (don’t ask me why). There would be 2 scenarios:

1. The committee would go all out on opening India’s shores to all kinds of capital, remove all restrictions, remove RBI’s supervision over financial markets, RBI should adopt inflation targeting framework, Mumbai should become an international finance centre (like Iceland, London) etc. It would be centred on how bad our financial system regulation is and we need to adopt these changes else we are doomed. It would add it is a mistake to think since we have largely avoided the financial crisis, that we don’t revamp the financial system. Let’s do it all real fast. The criticism would be mainly on RBI for keeping such a tight control on financial system.
2. The committee report is going to be cautious about the volume of capital inflows in the country. India should invite capital flows but should but with some checks in place. It would say we should learn lessons from the ongoing crisis and not think all capital flows are necessarily good. It would instead suggest incremental changes.

Some people would ask, so what is different and what is new? This is the nature of all committee reports w.r.t. capital flows. Well, nothing is new. But this is how things usually are.

If the second version goes through, it is likely to be followed by dissent notes from a few members who would vote for the first version. The dissent notes are going to be highlighted by the media as somehow most people in media feel the first version is the only model.  

So let’s see how it goes. It is going to be tabled in 4 months from now. I hope I am all  wrong about this one. And we see some progress.

Make sure you take time out from speculating on the Liberal Party leadership to participate in the same-sex marriage rallies tomorrow. On the 28 November, there will be rallies held in Brisbane, Melbourne, Sydney, Canberra, Adelaide and Perth get the details here.

Read about the Senate Inquiry into the Marriage Equality Bill at An Onymous Lefty.

WASHINGTON (AFP) – The Federal Reserve’s zero interest rate policy is provoking growing complaints from some economists who argue it is doing little to spark lending activity and may be fueling new asset bubbles.

Few expect any immediate hike in the federal funds rate, which has been in a range of zero to 0.25 percent since last December in an effort to jolt the economy from recession.

Traders work on the floor of the New York Stock Exchange (AFP file)

But some economists say the Fed is running the risk of falling into a “liquidity trap” in which monetary policy, no matter how stimulative, fails to spark new lending or growth.

Joel Naroff at Naroff Economic Advisors said holding rates at zero has a psychological impact but probably offers little more for the economy than a rate of 1.0 percent, which would under most circumstances be considered exceptionally low.

“This idea in the minds of so many people that the Fed needs to keep rates at zero through 2010 is very dangerous,” said Naroff.

“I would be concerned if we are still at zero percent next November. It would mean the economy is in trouble, and the potential for bubbles is greater.”

Analysts say most banks are content to borrow “free money” from the Fed and invest in US Treasury bonds for a modest yield, as part of the effort to repair their finances, rather than take the risk of loans to consumers or businesses.

Other banks and funds are able to borrow at ultra-low rates to invest in higher-yielding assets such as commodities, or Asian government bonds or real estate. This so-called “carry trade” has pushed the dollar down to historic lows and drawn complaints from many governments, notably in Asia.

The Fed on Tuesday acknowledged “that some negative side effects might result from the maintenance of very low short-term interest rates for an extended period.”

Ed Yardeni at Yardeni Research said the zero-rate policy is no longer working.

“I don’t want to sound ungrateful, but I would like to send another message to the Fed about its current policy: ‘Thanks for nothing,’” Yardeni said in a note to clients.

“The Fed’s zero interest-rate policy may be inadvertently depressing rather than stimulating the economy.”

Yardeni said banks are pulling back on lending “because it makes more sense for them to buy Treasury and agency securities so long as they are certain that the Fed won’t raise interest rates.”

The low rates enable the US government to issue more debt at a relatively low cost, but Yardeni said this may be crowding out private borrowing.

He said that in Japan, the near-zero rate between 1999 and 2006 “enabled the government to issue lots of bonds at extremely low yields. However, this didn’t do much to revive self-sustaining economic growth in Japan. The United States seems to be heading down the same path.”

Because of the low rates and weak dollar, Yardeni said that “asset bubbles are already making a comeback in stocks and commodities around the world. The biggest bubble may be in government securities.”

He said the central bank “should start raising rates and resist providing any guidance on the likely pace of tightening. Providing strong guidance as to the likely direction of monetary policy simply encourages speculators to take more risk.”

Naroff said the economy could withstand a modest hike in rates as long as banks and borrowers have enough confidence to expand credit.

But he said the Fed needs to prepare the public and financial markets with more confident statements about the economy.

“I’d like to see them raise by the middle of next year,” Naroff said. But this means that “by the January or March meeting at the latest they would have to send a signal.”

Cary Leahey, senior economist at the research firm Decision Economics, said the majority of analysts believe it is too soon to even think about raising rates.

“It would be political suicide to raise rates with a 10 percent unemployment rate,” he said.

Leahey said easy money is helping the banking system recover from the crisis.

Any effort to curb speculation “will just take money away from banks” with the potential to deepen the financial crisis, Leahey added.

Leahey said it may be another six to nine months before the Fed considers hiking rates, but that once it does start, the moves may be surprisingly strong.

“The Fed has learned its lesson in the last 10 years, so when they do decide to normalize rates they will do it more quickly than they did in the 2004 to 2006 period,” he said.

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I got a nasty comment on one of my posts the other day by a Kevin P Ward, who is apparently the director of something called the Aspen Science Center. You can read the post for yourself as it is distasteful. So like most people, I wanted to know why he said what he said and looked him up on the internet.

The goals of the center seem noble; educating both children and adults on the sciences. Having been a technologist  for 30 years I believe this is one of the most important responsibilities in our nation today. The Science Center have had some pretty good speakers who appear to be experts on their subjects. I also found that Mr. Ward gained some notoriety during the 2008 election when he called for a science debate between the presidential candidates. He was quoted in the Aspen Times as saying President Bush “has legitimized scientific ignorance in the public arena” in emphasizing the importance of his own vision of science.

Accusing the president of dismissing global warming as “just another theory”, Ward said ” So’s gravity. I invite him to walk off the roof of a 3 story building”.  Last I looked, it was called Newton’s Law of Gravity. Whatever the eventual truth, AGW is still only a theory. Mr Ward was both wrong and condescending. And there, you see lies the rub. Too many people in the earth sciences either have either forgotten the the importance of  accuracy and fact or simply don’t care. They are also often very rude to those who differ with their theory.

Forty years ago, my father, a rocket scientist, served as acting director of ARPA (now DARPA). Even then, he was deeply concerned with the new field known as earth sciences. He pointed out that even in the mid to late 1960’s, some of the instrumentation available was so sensitive that in many cases the presence of certain elements and compounds was statistically meaningless. X parts per million or even parts per billion can have very little meaning in most cases. He would liken detection levels of some equipment to finding a grain of sand in a dumptruck.

The determinant, he said was the application. The same principles and technology that can, as an example, sniff plastic explosives and nuclear materials and the carbon in a core sample can be misapplied and the data manipulated either inaccurately or improperly. The tool must be used properly and the facts verified. And as Disraeli once raged  “lies, damned lies, and statistics”. The misuse and misapplication of the data has been a common issue at the Environmental Protection Agency and here in California for many years. When making decisions on science, the data must be sacrosanct. The problem seems to be far too common when it comes to earth sciences. The cost/benefit discussion, as well as a number of more fundamental issues, have in many cases been lost in the statistics.

And now we find perhaps the greatest scandal of all is based upon scientists playing fast and loose with the facts. I do not know the truth of anthropogenic global warming, but at the very least that the data has been corrupted, and one of the fundamental principles of scientific research has been violated. That they may have then manipulated and falsified that data is cause for the most serious of criminal charges.

Make no mistake about it. Trillions of dollars are at stake. The Cap & Trade bill in this country has already been damned by some of the leading climatologists as ineffectual. This is as much about money and power as it is about the environment.  In 2 weeks representatives of most every country on the planet will meet in Copenhagen on Global Warming, and the countrywith the most at stake is the United States. And now the data on which all of the decisions will be based has been irrevocably tainted.

A couple of years ago I read Al Gore’s “An Inconvenient Truth”. I was amazed that virtually everything in it was anecdotal. The charts and graphs were subjective. In a book on an issue of science, it did not present a clear, logical case. This has been a running theme in the global warming debate. The science is rickety, fast and loose. The worms are squirming out of the can.

We rely on scientists to do their jobs scientifically. Unfortunately, it seems we are dealing with educated morons such as Mr. Ward. I believe Alex Trebek would agree this is the ultimate game of Jeopardy.

A couple of weeks later than promised, but let me get back to the WEO2009 and its climate scenarios. Here’s what the news were saying:

Cost of extra year’s climate inaction $500 billion: IEA | Green Business | Reuters.

The world will have to spend an extra $500 billion to cut carbon emissions for each year it delays implementing a major assault on global warming

In its Climate Change report, the IEA considers the world needs to keep the concentration of CO2 in the atmosphere below 450ppm, to assure temperature does not rise more than 2 degrees Celsius globally. In page 12 of the downloadable excerpt, they describe this being an overshoot trajectory, with concentration peaking at 510ppm in 2035, staying there for some 10 years and then dropping down. Sounds risky, but anyway.

What the report also does is to put a price tag on the reductions needed (calculates the area beneath the Marginal Abatement Curve): $10.5 trillion in energy-related investment, of which 3/4 between 2020 and 2030, because that is where most reductions occur.

So, from an Intergenerational Equity I have to ask: if the burden of decarbonizing the economy falls so heavily in this generation, and it is for us to leave to the next generations a world even better than the one we received, does it make sense to borrow, now, against the future? Regardless of the cost? Borrow to invest, borrow like crazy, and share the bill? If it is our saving that will allow the next generations to live sustainably, how much would they be willing to share the burden with us?

Punchline: the question is always who gets the tab.

Finally, some praise for the EU’s choice of President and Foreign Minister of the EU.  The New York Times article on The EU’s New Leaders acknowledges that the choice of a Haiku-writing Belgian Prime Minister and a British baroness and EU Trade Commissioner was smart.

Why so smart? Well, because governance of a network cannot be based on pure hierarchical principles. For starters, because there is no clear hierarchy. Everything is alliances, soft power, give and take, symbolic gestures and horse trading.  Secondly, because hierarchy is not wanted. The EU is composed of 27 Member States each with their own idea of leadership. What they want is a negotiator, someone who can make the most of a near impossible situation.

Needless to say, this does not mean that top-down power will not be involved. The wonderfully strange thing about even such a surprising appointment is that it becomes power. In that sense, leadership from below is a very precarious state of affairs. It seldom happens, or rather, it happens quite often, but once it is recognized as such, it ceases to exist. Plain old leadership takes over. The disciple becomes the leader.

Another thing is that to Belgians, of course, the notion of their Prime Minister being an unknown figure is hard to fathom. This is another very interesting facet of leadership. It can actually be very local. Nobody is felt as more powerful than a tribal leader in a small community. Yet, his or her power seldom extends beyond a few hundred people and beyond a small physical territory. But to the locals, this does not matter.

The challenge with the EU has always been that its actions are slow to seep down to individuals. Even though the European policy debates are much more consequential than national policy debates, they are less talked about. The sociology of the whole thing is relatively straight forward. Whatever people think is real becomes real in its consequences. People refuse to believe that an organizational structure they do not understand and politicians and bureaucrats they do not know can have any power at all over themselves. However, if you have seen someone on TV, shaken their hand in a parade, and they talk about your top ten concerns (taxes, the economy, social benefits, safety, culture etc.), then you believe they really can affect change. Little do we consider the fact that politicians may well talk of things they cannot really deliver…

So, in a situation where the national scene is where heroes and villains are created, there is little scope for big Europe. And maybe that is the price we have to pay for real progress on policy issues.

The next few years will show whether this strategy works. I, for one, think that there is much to gain by testing the waters of networked leadership. The EU is the best example we have. The laboratory is a bunch of very much alive Europeans who are slowly recovering from a financial crisis. So, the stakes are high, but the results could be good, if not great. Not bad at all.

This is the statement from the UK Home Office regarding a public policy consultation: Together We Can End Violence Against Women and Girls, opened last March and led by UK Victims’ Champion Sara Payne.  This consultation has led to the development of a new UK strategy plan: Together We Can End Violence Against Women and Girls: a Strategy, released Nov. 25.

The strategy includes:

• A national communications strategy to challenge attitudes towards violence against women, including rape and other forms of sexual violence;
• The inclusion of gender equality and violence against women in the school curriculum for Personal, Social, Health and Economic (PSHE) lessons; and
• A further £3.2 million of funding to help establish more Sexual Assault Referral Centres (SARCs).

In addition, work will continue on wider challenges that have been identified by the review.

Today’s publication will feed into a wider review of how rape complaints are handled, being carried out by Baroness Stern. It will look at how public authorities, including the police, local authorities, health providers and the CPS, respond to rape complaints and interact with each other. Its findings will be published in the New Year.

As part of this release, the Home Office has made a variety of new online tools and document available.  These include the:

• Violence against women and girls ready reckoner
  The ready reckoner tool is a key action in the Violence Against Women and Girls (VAWG) strategy. Using findings from the British Crime Survey, it enables commissioners of services from a range of providers such as health, policing and housing, to estimate the need for local services for domestic violence, sexual violence and stalking in their area. It will also be a useful tool for agencies, which carry out joint strategic needs assessments.
• Together We Can End Violence Against Women and Girls: a Strategy The complete report
• Together We Can End Violence Against Women and Girls: Annexes to the Strategy
  

‘For Our Future – The 21st Century Higher Education Strategy and Plan for Wales’ builds upon and replaces ‘Reaching Higher’. The strategy and plan will set out the strategic direction for higher education in Wales.

The Minister has outlined a significant shift in how the £400m+ annual funding from the Welsh Assembly Government to the HE sector in Wales will be spent to improve efficiency, widen access, develop strong links between the economy and higher education providers and improve opportunities for learning through the medium of Welsh.

To download the document click here

Press release, 25 November 2009: http://wales.gov.uk/news/latest/091125highereducation/?lang=en

Today’s post is a little different.  It looks at what things may mean, aside from their physical presence.  An earlier version first appeared as an emailed comment on October 21, 2009 to JStreet.org, an emerging interesting group noted for expanding the Middle Eastern conversation.  Here’s the item at JStreet/Settlements that got my attention…

Security Barrier & Two-state Sustainability:  “J Street supports the concept of a security barrier as an important element of Israel’s defense, but believes that the barrier must be located along an internationally recognized border.  Its present route has confiscated land and separated Palestinians from the jobs, health care and family. It will have to be relocated in many sections as part of a final status agreement.”

So let’s look at that for a moment.  Isn’t it possible that it’s exactly “the concept of a security barrier” that makes a barricaded border into a mutual membrane that filters out the directly accessible economic and individual interactions that define viable social and political life?  Can the term “barrier” end up turning the meaning of “security” upside down?

It’s not like Europe hasn’t torn itself apart twice in the past century, and numerous times prior to that (see History_of_Europe).  Yet, consider that the 1930-1939 barrier attempted between two European antagonists has become the signature term for a futile defensive crouch.  For details, look at the Maginot_Line polity and policy.  Just as the Line tried to substitute concrete for wisdom, mobile forces, and firepower, so an ongoing barrier says that an ongoing relationship will be grounded in a physical manifestation of an Existential disbelief in any shared positive reality between the people on the ground.

In relative terms, the Berlin_Wall outlived the Maginot Line by decades, but it didn’t buy durable security for the German Democratic Republic.  The poet Robert Frost wrote that “good fences make good neighbors” (see Mending_Wall), but it seems also true that solid walls make prisoners on both sides.  At least a fence lets air, light, and sight pass through, and provides a place to rest one’s forearms while discussing the day with a neighbor.  And unlike a solid wall or barrier, a simple fence is a mutual respect for a shared larger space.  That’s a security no barrier can provide.

Once the idea of “barrier” digs into the mind, other examples come into focus.  There’s Hadrian’s_Wall to keep Romans safe in Britannia.  There’s the Great_Wall_of_China  to keep out invaders from the 5th Century BC to the 16th Century Current Era.  Each kept people busy and delayed incursions, but their need for continuous work indicates neither succeeded in staving off depredations as the respective centers lost their way.  Makes one wonder about the ability to process lessons learned.  See current US efforts to paste walls of steel (South) and procedure (North) to cover policy shortfalls affecting both borders (U.S.-border-policy-question, United_States_border).

So there’s something seductive about a wall.  People keep building them to feel good by doing something, anything, to avoid doing something more insightful.  Their record says it’s more likely walls end up looking like a lunge for a security blanket, than like real clarity of mind.  Maybe simple fences to mark shared spaces aren’t so simple-minded after all.

Pemerintah segera membatasi ekspor rumput laut gelondongan (dried seaweed) pada 2012 guna mendorong pertumbuhan industri pengolahan dalam negeri.

“Paling lambat hingga 2012 ekspor rumput laut gelondongan akan dibatasi. Setelah itu akan kami tutup,” ujar Direktur Usaha dan Investasi Ditjen Pengolahan dan Pemasaran Hasil Perikanan (P2HP) Departemen Kelautan dan Perikanan (DKP) Victor P H Nikijuluw dalam satu seminar di Jakarta, Selasa (24 November).

Sejauh ini, menurutnya, industri pengolahan rumput laut di dalam negeri belum berkembang pesat. Dari data DKP pada 2008, 15% ekspor rumput laut dilakukan dalam bentuk olahan, sementara sisanya dalam bentuk gelondongan.

Dia mengatakan di Indonesia hanya terdapat 10 produsen pengolahan rumput laut jenis Eucheuma Cottoni yang berkapasitas produksi mencapai 500.000 ton per tahun. Adapun, eksportir rumput laut gelondongan jenis yang sama mencapai 100 perusahaan.

Dia menjelaskan DKP menyiapkan tiga opsi kebijakan tentang pengembangan pengolahan rumput laut di Tanah Air. Pertama, eksportir rumput laut gelondongan harus terdaftar dan wajib memiliki pabrik pengolahan di dalam negeri. Kedua, pemerintah membatasi ekspor rumput laut gelondongan.

Ketiga, memberikan wewenang kepada koperasi untuk melakukan ekspor rumput laut. Dengan demikian, margin harga dari tingkat pembudi daya ke produsen tidak terlalu tinggi.

“Dapat dibayangkan, saat ini harga rumput laut di petani sekitar Rp5.000 per kilogram, tetapi ditingkat eksportir harga sudah US$1 per kilogram. Perbedaan harga yang jauh inilah yang akan kami potong,” ujar Victor.

Ketua Komisi Rumput Laut Indonesia Farid Ma`ruf mengatakan 50% pasokan rumput laut gelondongan dunia berasal dari Indonesia. Untuk mengurangi ekspor dalam bentuk gelondongan, maka upaya yang perlu dilakukan adalah membuat klaster rumput laut yang mengintegrasikan pengolahan dari hulu hingga hilir.

“Dengan demikian akan lebih optimal dan bernilai tambah,” ujarnya.

Sekjen DKP, Syamsul Ma`arif mengatakan DKP akan menyiapkan 60 klaster rumput laut hingga 2014, sebagai upaya menjadikan Indonesia sebagai produsen rumput laut terbesar di dunia.

“Kami targetkan 60 klaster rumput laut hingga 2014. Ini sebagai usaha menjadi produsen rumput laut terbesar di dunia,” kata Sekjen DKP, Syamsul Ma`arif.

Dia menyebutkan saat ini terdapat 12 klaster industri perikanan rumput laut yang telah dan sedang dikembangkan DKP bersama pemerintah daerah (Pemda) dan swasta.

Rumput laut

Klaster tersebut terdapat di Sumenep Jawa Timur (dua klaster), Gorontalo (dua klaster), dan masing-masing satu klaster di Pangkep Sulawesi Selatan, Dompu Nusa Tenggara Barat (NTB), Serang Banten, Kepulauan Riau, Minahasa Utara, Parigi Moutong Sulawesi Tengah, Polewalimandar Sulawesi Barat dan Bau Bau Sulawesi Tenggara.

Syamsul menjelaskan klaster rumput laut yang dikembangkan berbeda dari klaster perikanan tangkap yang juga sedang dikaji oleh DKP yang rencananya dikembangkan pada 2010.

“Klaster ini sangat berbeda karena mengintegrasikan dari hulu hingga hilir. Kalau klaster perikanan tangkap kan mengintegrasikan penangkapan di satu wilayah tangkap,” ujarnya.

Victor P H Nikijuluw menjelaskan klaster itu sendiri dikembangkan tiga lapis usaha. Pertama, usaha budi daya dikelola masyarakat.

Kedua, usaha pengumpulan dan pengolahan tahap awal oleh perusahaan lokal atau daerah. Ketiga, usaha pengolahan tahap lanjutan yang dilakukan perusahaan pengolah dan eksportir dalam rangka peningkatan nilai tambah.

Dia mengatakan target produksi Indonesia pada 2014 setara dengan 1 juta ton rumput laut kering. Demikian pula produksi rumput laut olahan dalam bentuk alkali treated cottonii (ATC), semi refined carrageenan (SRC) dan refined carragenan (RC). Diharapkan produksi rumput laut Indonesia termasuk dalam bentuk ATC, SRC, dan RC mencapai US$1 miliar pada 2014.

Salah satu produsen ekstrak atau chip rumput laut saat ini adalah PT Indonusa Algamas-yang masuk dalam sebuah klaster di Nusa Tenggara Timur-kini mengekspor 10 peti kemas per bulan.

Direktur PT Indonusa Algamas Sasmoyo P Boesari mengatakan 100% produk setengah jadi itu diekspor ke berbagai benua.

Saat ini, kapasitas terpasang perusahaan ini mencapai 2.000 ton per bulan, sementara kapasitas produksi mencapai 1.200 ton per bulan.

Bahan baku rumput laut, katanya, diperoleh dari klaster budi daya rumput laut di NTT dan NTB yang per hektare mampu memproduksi 3 ton rumput laut.

Sasmoyo menceritakan sebelum perusahaannya mengolah chip rumput laut, selama 15 tahun telah berpengalaman melakukan budi daya rumput laut.

Saat ini, katanya, proses budi daya diserahkan kepada anak perusahaan dan petani plasma di dalam klaster rumput laut di NTT dan NTB itu. (diena.lestari@bisnis.co.id/martin.sihombing@bisnis.co.id)

Leading Chinese shares slump 3.6% as uncertainty grips investors ahead of a key government economic meeting…. From BBC News. Full story

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Pemerintah punya segudang rencana untuk membenahi sistem transportasi logistik di Indonesia, terutama yang melalui pelabuhan laut. Salah satunya dengan mengaktifkan kembali dua pelabuhan darat dry port di Cikarang-Jababeka dan Gedebage-Bandung.

Wakil Menteri Perhubungan Bambang Susantono menjelaskan, rencana tersebut sudah tercantum dalam cetak biru sistem logistik Indonesia. Pemerintah akan segera menerbitkan cetak biru yang akan menjadi pedoman penerapan transportasi arus barang yang efisien dan murah tersebut.

Menurut Bambang, penyelesaian pedoman sistem logistik tersebut menjadi tugas tiga Departemen yang dikoordinasi oleh Menko Perekonomian. Yaitu Departemen Perhubungan (Dephub), Departemen Pekerjaan Umum dan Menteri Perdagangan.

“Tugas Departemen Perhubungan memastikan empat pelabuhan utama Tanjung Priok, Makassar, Belawan, dan Tanjung Perak mampu beroperasi 24 jam. Departemen Perhubungan juga diminta untuk menyelesaikan cetak biru angkutan multimoda, angkutan udara, darat dan perkeretaapian,” kata Bambang, Rabu (25/11).

Menurut Bambang dalam pengembangan pelabuhan beberapa tahun terakhir, tidak seluruhnya berjalan mulus. Bambang mencontohkan, yang harus segera dibenahi antara lain peningkatan maksimum jumlah incoming gate di Pelabuhan Tanjung Priok. Diperkirakan pada 2011 akan ada 930 unit kontainer per jam masuk Tanjung Priok. Sementara daya tampungnya saat ini hanya 600 kontainer. “Bahkan kalau dilakukan business as usual, pada 2020 diperkirakan akan masuk 1.370 kontainer per jam,” jelasnya.

Nah untuk mengantisipasi hal ini, pemerintah menginstruksikan diaktifkannya kembali sejumlah dry port di kawasan-kawasan industri. “Ada sejumlah dry port yang akan dibangun dan diaktifkan kembali. Antara lain di Cikarang-Jababeka dan Gedebage-Bandung,” katanya. Kawasan dry port ini lebih dikenal dengan istilah Kawasan Pelayanan Pabean Terpadu (KPPT).

Seperti diketahui, pola persaingan bisnis saat ini telah bergeser dari menekan biaya produksi di pabrik menjadi menekan serendah mungkin biaya transportasi dan distribusi. Sehingga barang yang dijual bisa murah harganya.

Well, there has been a lot of debate recently on the issue- whether microfinance helps or not?

Two studies, both by Poverty Action Lab researchers have been in heavy controversy since they have been published. First – The miracle of microfinance? Evidence from a randomized evaluation by Abhijit Banerjee,  Esther Duflo,  Rachel Glennerster and Cynthia Kinnan (May, 2009). Second by Expanding Microenterprise Credit Access: Using Randomized Supply Decisions to Estimate the Impacts in Manila by Dean Karlan (July, 2009). First based in India, second in Philipines. Both studies show limited impact of microfinance on people’s lives.

I have been reading oft and on about it, but never could read through the results.

This Wharton news piece summarises the debate neatly. What is the issue at hand?

For three decades, microfinance institutions have given out small loans to the world’s poor — mostly women — and amassed hundreds if not thousands of case studies showing that the loans help alleviate poverty, improve health, increase education and promote women’s empowerment. Skeptics, however, have argued there is not enough hard data to prove that microfinance transforms lives on a large scale, and they have called for more rigorous analysis.

Now two new studies have raised doubts about long-held beliefs in microfinance. The studies — which used randomized controlled trial methodologies — did find that microloans helped poor entrepreneurs boost profits in their businesses. However, the studies found little impact on health, education, average consumption, women’s decision making or self-reported well being.

The findings

One problem with previous research, microfinance’s critics respond, is self-selection — that is, studies only survey clients who successfully take out loans. The new studies differ from the past in that both attempt to measure the impact of microfinance by comparing two groups: one with access to microcredit and one without.

In the first study, researchers from the Massachusetts Institute of Technology (MIT) worked with a microfinance lender in India to look at 104 slums in Hyderabad. Half of the slums were randomly selected to receive a loan branch, while the other half were not. Fifteen to 18 months later, researchers interviewed 6,850 households in the community — about 65 per slum — in an attempt to gauge changes in economic and personal well-being.

The second study, by Dean Karlan of Yale University and Jonathan Zinman of Dartmouth College, used a similar method to analyze microfinance in the Philippines, but instead of communities they looked at individual borrowers, tracking a total of 1,601 marginally credit-worthy loan applicants in Manila. Half were randomly offered a loan; half were denied. Researchers interviewed the sample group 11 to 22 months later to see if anything had changed. In both cases, results were mixed.

Hmmm.. The newspiece goes on to discuss views of economists on the 2 papers. The results seem to have surprised them but most are still hopeful. The benefits of the loan should be seen over a longer term. The next round of research should be more positive. Moreover, finance is just one part. It has to be combined with healthcare facilities, agriculture facilities etc to see proper impact on poverty. However, there are critiques as well who say the results need to be taken seriously and may be we are overdoing microfinance.

Abhijeet Banerjee, throws further light to the issue:

Reassuringly, we see no evidence of people falling into a debt trap. A lot of people do borrow without starting a business, but many of them simply use the money to pay down another, more expensive, loan. Of the rest, some use it to deal with an urgent need (an illness, a wedding) that they would have had to borrow for in any case; others simply buy something they needed for their homes but would never have enough money to buy (a roof or a television). To pay for the loan, they cut back on some of their daily indulgences (a cup of tea here, a pan there), which, remarkably, is exactly what they had said that they wanted to cut before the experiment started.

All this is good news. Yet the reactions to these results in the media have been rather negative — one hears rumblings that microcredit might be the latest ‘God that Failed’. Perhaps this is inevitable: so little has gone right with anti-poverty programmes in the last 50 years that it is hard not to hope for a miracle cure, and some of the boosters of microcredit indeed suggested that we finally have one. It has been argued, for example, that by putting more spending power in the hands of poor families and, perhaps more importantly, in the hands of women, microcredit can expand investment in child health and education, empower women and reduce discrimination against them. There was even the suggestion that by making people feel that their lives could be better and giving women independent access to capital, microcredit could fight the Aids epidemic.

He adds these results should not invite regulators spoiling the game:

This is no surprise for Padmaja Reddy, the founder and CEO of Spandana, who has always insisted that real transformation of people’s lives takes a long time — the next round of data collection is scheduled to start three years after the original loans were given, and there we might see something, she says — but it could still be a problem for her, if, for example, the Indian regulators, who have always been a little suspicious of microcredit, use the evidence as an excuse to start interfering more.

I agree to the long-term impact as it is all too complex. People take time to sort out their finances. But don’t agree to the regulation bit.

Again, I don’t know why financial regulation is always seen in this light. Why can’t financial regulation lead to better results? There is a proliferation in microfinance lending and with advent of for-profit microfin firms, it is changing bigtime. In such a case, shouldn’t we be prepared for some problems/issues in future? This crisis (and umpteen ones before it) tells you whichever sector of finance looks promising be weary of it. I am not saying restrict microfinance but it has to be watched. You never know what hits you and how.

How can we make financial regulation efficient? That to me is a very important question which remains unanswered. Financial regulators are seen as slow, not understanding the dynamics of finance etc. How can all this change? We live in a highly regulated world, why can’t we do the same for financial sector?

Recently Paul Krugman pointed to the differences in recovery of US and Germany. US is recovering with unemployment still rising and Germany recovering with hardly any increase in unemployment levels.

Jacob Funk Kirkegaard has a superb post in Peterson Institute’s Real Time Economics Issues Watch Blog. He compares the unemployment levels in Euro area economies and says:

While the US unemployment rate has more than doubled since early 2008 to 10.2 percent in October 2009, increases in Europe have so far been more muted. In France, supposedly the core eurozone country and labor market overregulator, unemployment has risen by only about 2 percentage points to 10.0 percent, according to the latest available data. Meanwhile, in Germany the essentially flat unemployment rate still at less than 8 percent really stands out, both among other EU countries and obviously when compared to the United States.

For the first time in decades therefore the unthinkable—at least among labor economists—has happened and US unemployment rates are today above those of the core eurozone countries. It is hard to imagine a better reason than that for the Obama administration to reconsider its domestic employment policy response to the crisis.

Superficially of course, it would seem that core-Europe’s labor markets have been far better able to cope with the economic crisis than the US labor market. However, one caveat must immediately be highlighted.

Any relatively better labor market performance in core Europe is countered by a collapse of eurozone labor productivity relative to the US, especially in manufacturing.

How did European economies manage this?

It is further important to realize that the benign recent core-European labor market trend represents an explicit social choice in the countries in question. Not only did France and Germany let their existing extensive social safety nets play their intended role as automatic stabilizers after the fall of 2008, but both countries have further moved aggressively to financially support temporary flexible working-time arrangements—the so-called “work sharing programs.” Increasing the flexibility of working hours for individual workers at the outset of the crisis, so that fluctuations in labor needs are distributed across all workers rather than selectively among them (which would have resulted in some layoffs) has clearly been instrumental in containing unemployment rates.⁷

In many ways, the core-European policy response is a welcome improvement on the disastrous European labor market policies of the 1980s where the “lump of labor fallacy” led governments to facilitate workers’ early retirement or other premature exits from the labor market in the false hope that more people leaving the workforce would free up additional job opportunities for younger workers. Similarly, it is clear that in core Europe’s generally still highly regulated labor market, attempts to combat hysteresis effects by maintaining people in employment even at reduced hours is likely to be a sensible policy, as many core-European workers would otherwise have invariably slipped into long-term unemployment.

So what are the policy options/choices for Obama?

With the US unemployment rate at 10.2 percent, it may be too late to expand “work sharing programs” from the current 17 state-level programs. Government-supported “work sharing programs” similar to those in core Europe work to preserve existing employment rather than to create new jobs. Hence such programs disproportionately benefit skilled workers, whom companies will prefer to “hoard,” as they are more likely to find employment elsewhere if laid off. This type of insider-outsider dynamic has been very prevalent in Europe during the crisis, where increases in unemployment despite work sharing programs have been heavily concentrated among people on temporary work contracts. Additional protection for “insiders” is clearly not what the US labor market needs at the moment.

Instead, in the short term, Congress should implement a temporary holiday for Social Security and Medicare payroll taxes for new hires. This could provide an urgently needed, powerful broad-based and immediately implementable job creation stimulus for the US labor market.

For the long term, Congress needs to get serious about multi-year funding for broad-based workforce skills improvement and retraining programs. The one-off funding for the Workforce Investment Act (WIA) included in the stimulus bill and the long-warranted expansion of Trade Adjustment Assistance (TAA) to services sector workers are welcome, but must be prolonged. Only sustained funding will insure that the relevant skills-enhancing programs are in place when US workers need them. With job losses in the current recession increasingly of a structural nature (meaning that workers will need to seek new jobs in a new industry), such programs will be more needed to avoid another jobless US recovery.

Interesting insights from European Labour markets and policies.

The times have changed. US  has always criticised Europe for its labor policies. Europe’s labor market has always been seen as a factor that has lowered the regions’ growth, productivity etc. Now, US might have to take some lessons from Europe’s  weakness.