Saturday, November 29, 2008
Thursday, November 20, 2008
Budapest Celebrates Historical U.S Election
By: Chelsea Blair
Americans, Hungarians, Canadians, Democrats, Republicans and many more nationalities and political persuasions all gathered together in bipartisan harmony to attend the U.S Election Night Party. The event was organized by the American Chamber of Commerce (AmCham) and held at the Corinthia Grand Hotel on voting day, November 4th.
Local celebrities among the crowd included US Ambassador to Hungary April Foley, former Hungarian environment minister and current Free Democrat Party (SzDSz) leader, Gábor Fodor, and liquor producer Peter Zwack of Zwack Unicum Nyrt., among others. The event was filled to capacity and party goers enjoyed a vast buffet, free drinks, election night news coverage and commentary as well as some fun and games including a U.S Presidential quiz show and a mock election.
“It was worth going there,” commented Orsolya Bader, a senior at McDaniel College Budapest. “I got to meet people and exchange ideas, and I could interact with people at the same time as watching the outcome of some of the results in several rooms. It surprised me how many people attended and also the outcome of the swing states results. To be honest I was not really convinced before that Obama would win.”
The party kicked off at around 7:30 pm, and lasted till around 4:00am, many of the diehards were still there, but had shifted from standing to sitting on the floor, and actually had to be booted from the venue. Unfortunately, the time that the festivities ended was just about the same time that final results from some states were coming in. Berne Weiss, who teaches Organizational Communication and Psychology in the workplace at McDaniel commented on the event; “the biggest drawback was the time difference, which meant that just as it was getting interesting, I was fading. Would be great to be able to nap from 10 - 12. Maybe more sofas next time. The outcome is thrilling; it couldn't say more about the range of possibilities in the American democracy. I have attended election night parties in Budapest before but this was the most exciting for me because I cared so much about the outcom
e, and was also optimistic about the outcome.”
Not only in America, but the entire world, seemed to be elated after the U.S Presidential Election finally concluded in the wee hours of Nov.5th with John McCain delivering a heartfelt speech conceding his loss and pledging his support to the President Elect Barack Obama. The world was poised at attention for the momentous occasion and Budapest wasn’t the only place with election festivities. In just about every major city across Europe, from Dublin to Athens, there was a party somewhere to celebrate the historical evening. They were mostly organized by Democrats and Republicans Abroad Groups, AmChams, and American Embassies. Outside of Europe there were election events held in places like Tokyo, Dubai, and in Kenya, where Obama’s father hails from, people were celebrating on the streets. The New York Times reported recently that there is even a Barack Obama Fan Club in New Delhi which oddly enough is comprised entirely of non-U.S citizens they raised $4 000 for Obama’s campaign.
Americans, Hungarians, Canadians, Democrats, Republicans and many more nationalities and political persuasions all gathered together in bipartisan harmony to attend the U.S Election Night Party. The event was organized by the American Chamber of Commerce (AmCham) and held at the Corinthia Grand Hotel on voting day, November 4th.
Local celebrities among the crowd included US Ambassador to Hungary April Foley, former Hungarian environment minister and current Free Democrat Party (SzDSz) leader, Gábor Fodor, and liquor producer Peter Zwack of Zwack Unicum Nyrt., among others. The event was filled to capacity and party goers enjoyed a vast buffet, free drinks, election night news coverage and commentary as well as some fun and games including a U.S Presidential quiz show and a mock election.
“It was worth going there,” commented Orsolya Bader, a senior at McDaniel College Budapest. “I got to meet people and exchange ideas, and I could interact with people at the same time as watching the outcome of some of the results in several rooms. It surprised me how many people attended and also the outcome of the swing states results. To be honest I was not really convinced before that Obama would win.”
The party kicked off at around 7:30 pm, and lasted till around 4:00am, many of the diehards were still there, but had shifted from standing to sitting on the floor, and actually had to be booted from the venue. Unfortunately, the time that the festivities ended was just about the same time that final results from some states were coming in. Berne Weiss, who teaches Organizational Communication and Psychology in the workplace at McDaniel commented on the event; “the biggest drawback was the time difference, which meant that just as it was getting interesting, I was fading. Would be great to be able to nap from 10 - 12. Maybe more sofas next time. The outcome is thrilling; it couldn't say more about the range of possibilities in the American democracy. I have attended election night parties in Budapest before but this was the most exciting for me because I cared so much about the outcom
e, and was also optimistic about the outcome.”Not only in America, but the entire world, seemed to be elated after the U.S Presidential Election finally concluded in the wee hours of Nov.5th with John McCain delivering a heartfelt speech conceding his loss and pledging his support to the President Elect Barack Obama. The world was poised at attention for the momentous occasion and Budapest wasn’t the only place with election festivities. In just about every major city across Europe, from Dublin to Athens, there was a party somewhere to celebrate the historical evening. They were mostly organized by Democrats and Republicans Abroad Groups, AmChams, and American Embassies. Outside of Europe there were election events held in places like Tokyo, Dubai, and in Kenya, where Obama’s father hails from, people were celebrating on the streets. The New York Times reported recently that there is even a Barack Obama Fan Club in New Delhi which oddly enough is comprised entirely of non-U.S citizens they raised $4 000 for Obama’s campaign.
Friday, November 14, 2008
MOL Becomes INA's Majority Owner
By: Maja FlorsicThe leading Croatian oil and gas company, Industrija Nafte (INA), has strengthened cooperation with its Hungarian strategic partner MOL. On September 1st of this year, Croatian Financial Services Supervision Agency (HANFA), approved MOL’s public offer for INA’s shares.
In 2003 MOL acquired 25% of INA’s shares while the Croatian government owned 44%. The remaining shares were distributed between Croatian war veterans who owned 14% and 17% were listed on the Zagreb/London stock exchange.
This September, MOL made a public offer of 2,800 kuna ($576.6) per share of the 31% not owned by the Croatian government, valuing INA as a whole at $5.76 billion. The bid was running until October 3rd and MOL, at the time, announced it would continue talks with the Croatian government after this date regarding a possible share swap. Ivo Sanader, the Croatian Prime Minister, confirmed on September 4th talks of a share swap were a likely option as the government is looking to avoid possible inflation likely to occur if the government shares were privatized. The government also stated that they believe a share swap would secure them more influence on MOL’s future policies leading to a strengthening of Croatia’s energy independence.
Hungarian daily newspaper, Nepszabadsag, reported today that MOL has obtained a 22.15 % stake in INA and now owns 47.15%. MOL paid close to $1 billion for the 2 million INA shares it bought, the paper says. MOL’s success in this takeover gives Hungary majority ownership of the Croatian leading energy company.
MOL and the Croatian government are currently undergoing talks concerning the possibility of MOL acquiring 19% of shares from the government, the same newspaper also reported.
Considering the current negative mood on market, many, including Croatia’s small shareholders, found this bid of 2,800 kuna per share to be unacceptably low. However, it seems the global financial crisis convinced many investors to accept MOL’s offer after all.
In a recent unofficial conversation with a MOL employee, he told me he strongly disagrees with these claims. In his opinion, something is worth only as much as is being offered for it. “No one is forcing INA to sell its shares and MOL doesn’t decide on the value of the shares.” His opinion and the likely opinion of MOL collectively is that if no one else offered more, the value offered is exactly what its worth.
Zsolt Hernádi, Chairman (CEO) of the MOL Group commented: “I believe that with the public offer we have shown our commitment in a transparent way towards both INA and Croatia. With the high acceptance of the public offer we have made another important step toward the realization of our strategic goal: strengthening the partnership with INA”.
Croatia is currently involved in negotiations with the European Union and is expected to join by 2010/2011. Under EU regulations, it is required of the Croatian government to reduce its stake in INA to 25%, making this requirement one of the possible reasons for INA’s privatization in the first place.
“Croatia feels pressured to prove to the EU that it can transparently conclude this deal and respect the EU regulations at the same time” added the MOL official in our conversation.
When asked about the possible benefits for Croatia from the sale of these shares, the MOL official, who is in fact Croatian, stated that the Croatian government has developed a special privatization strategy according to newly updated privatization laws. He added that this is important for Croatia as this new procedure is completely transparent and will therefore aid Croatia with EU negotiations.
He also added that both MOL and INA are vertically integrated companies, which means that several different steps in the production of a good are controlled by a single company.
The vertical integration of two companies, especially when raw materials are in question like in this case, is a positive thing as the two companies will jointly explore these raw materials thus keeping costs to a minimum.
As the percentage of ownership in a company is bigger, the company is more powerful. He feels, together, these two companies will become a leading oil and gas company in this part of Europe. Only such powerful oil companies have enough capital to finance large projects that include drilling, and so on, without the involvement of banks.
At the end of 2007 MOL had 340.6 million boe P1+P2 hydrocarbon reserves and 90.4 thousand boe/day hydrocarbon production (source of fuel).
INA, on the other hand, at the end of 2007, had 375.1 million boe P1+P2 hydrocarbon reserves and 65.3 thousand boe/day hydrocarbon production during 2007.
“MOL manages much more fuel and gas than INA”, responds MOL official to my question about the future of Croatian petrol supply in regards to this deal. As Croatia only receives its gas from Russia, a partnership with MOL will open up more possibilities of fuel supply to Croatia and will lower Croatian dependence on Russia.
The global banking crisis didn’t seem to affect this deal negatively at all, more so, it just seemed to help MOL. As the MOL employee said “...especially with the small share holders, as they realized they should accept MOL’s offer”.
5 Things You Want To Know About the Financial Crisis
By: Viktor de Hegyessy
Who’s next? Since the subprime mortgage crisis began in summer 2007, 20 financial institutions have had to close their doors. The prestigious investment bank, Lehman Brothers went bankrupt with a 613 billion debt, leaving 25,000 employees on the street. Witnessing the Bear Sterns collapse and the acquisition of a hobbled Merrill Lynch by Bank of America, has revealed fresh evidence that the turmoil deluging Wall Street is equal-opportunity.
How bad is it?
This is the worst financial crisis in 60 years, and it has shaken the banking system to its foundations.
For those who were in doubt, the previous weeks’ tumbles made it obvious: America is in a serious crisis. “The worst since World War II”, said Alan Greenspan ex-chairman of the Federal Reserve. According to the International Monetary Fund, the downturn has already cost more than 1000 billion dollars, which, on the whole, includes loans that will never be paid back.
How did we get here?
Popular opinion says that in fact it all started with the famous “subprimes”. But let’s get a deeper view on the issue from the BBC’s Business Editor, Robert Peston: “People forgot that economic cycles exist,” he said, adding, “toxic factors came together: surplus savings accumulated in the Far East and Middle East…billions of dollars looking for a “home”. And so, we had very clever investment bankers (or they thought to be very clever) in the city of London or Wall Street who created a “super highway” taking all this cash out, recycling it, lending it for ludicrously low interest rates to for example people in America who had very poor credit histories. They offered these mortgages with adverts saying “No credit history needed…you just got out of prison… no problem we’ll give you a mortgage!” Then these mortgages were repackaged by the same bright people into securities and then with the help of credit rating agencies and the naivety of investors all over the world this stuff was bought to be a safe investment which finally turned out to be poisoned and therefore this the trigger of where we are.”
Another important factor to explain why mortgage loans were so popular was that people’s enthusiasm overestimated an upward trend in asset prices, mistakenly thinking it would go on forever, said George Magnus, Senior Economic Advisor of UBS. Forever, once again, never came and home prices in 20 major U.S. cities are down 6.1% on average since October 2006, according to the Case-Shiller price index released by Standard & Poor's.
Thus, these high-risk credits accorded to millions of households weakened the strength of banks and raised the cost of credits which finally weighed down investments and consumption. In a single year, the “Big Three” of Detroit, Ford, General Motors and Chrysler, have seen their sales tumble by 20%, Reuters reported.
Who is to be blamed?
Roughly speaking, this crisis is situated in America and it’s been exported to the world, according to Ken Courtis, former Vice Chairman of Goldman Sachs Asia. More precisely, according to UBS’ Mangus, the US government should be blamed: “The US government was cutting taxes in a way that it shouldn’t be done.”
From another point of view, households that took out allegedly faulted mortgages could be blamed, but “you can’t blame consumers because it is somehow a natural instinct if someone is offering you a cheap loan and you want to buy a house, to take the loan and buy the house.”, explained Robert Peston of the BBC.
Alan Greenspan
“You really have to locate the blame to people who are paid to know better…Alan Greenspan…every time there was a mess he started cutting taxes and that sent a signal to bankers that if they were facing a potential problem they’ll be bailed-out by the authorities and it meant that the next time they took bigger and bigger risks, in the end with “our” money, because they knew that at the end of the day the government will bail them out.”
This opinion was ratified with the events of this year and particularly those of Friday, 3 October 2008.
This year the US government rescued several companies facing financial difficulties. In March, JP Morgan Chase bank received $29 billion enabling it to buy Bear Stearn’s assets for the ridiculously low price of $10 per share, however a month before the price was at $80 per share. In September, Fannie Mae and Freddie Mac, private agencies sponsored by the government sharing most of the mortgage loans, received a $200 billon credit from government. And American International Group, the largest insurance company in the US, was simply nationalized: the Fed allocated 80% of its capital against an $85 billion credit.
On Friday, 3 October 2008, the US Congress passed the Bush Bail-out Plan on the second attempt. The Congress had rejected the first plan on Monday, saying it would not solve the fundamental problems of the US and the world economies. US Congressmen were angered because many perceived former Goldman Sachs boss Henry Paulson, US Treasury Secretary, bailing out his mates, which was also shocking for many American people, said Robert Peston of the BBC. Following the Senate’s positive vote on Thursday, however, and after intense lobbying by its supporters, the $700 billion bail-out was passed by 254 votes to 166. The revised bill was sweetened with tax breaks and more deposit insurance to entice mainly-Republican doubters.
How much is $700 billon really worth?
Vanity Fair.com compiled its own list of other things the lump sum could have been spent on (All figures approximate). The compilation was divided in three categories:
Firstly, things that would be useful: Preventing 200 million foreclosures. Paying back US debt to Japan, with enough left over for Luxembourg or Russia. Paying the equivalent of 10 years of total international humanitarian aid at current levels. Tripling the income of the billion people in the world who are living on $1/day or less. Providing bi-weekly $100 psychotherapy sessions for every American for a year.
Secondly, things that would be a wee bit Socialist: Paying for Social Security for next 40 years. Providing healthcare for all Americans.
Thirdly, things that would be awesome: Throwing 100,000 lavish Las Vegas birthday parties with appearances by the Rolling Stones. Buying Iraq and Afghanistan, with enough left over for Sweden (or 13 Iraqs, or 90 Afghanistans), measuring by G.D.P. Remaking The Dark Knight 3,800 times.
“Government intervention is not only warranted…it is essential!” declared G.W. Bush.
Wasn’t this intervention too late? Could the Government take precautious actions way before this crisis?
The government should have intervened way sooner, for example by regulating the amount of mortgage loans that a financial institution could possess, more precisely by regulating the share of mortgage “subprime” loans of the banks’ credit portfolio. To concretize, out of a hundred loans for example only 5% could have been mortgage loans, explained Robert Sternthal investment expert at CIB Bank Hungary.
Nevertheless, the world’s “number one superpower” doesn’t sink into a Great Depression like in the 1930’s: “In eighteen months, the Americans had to face the equivalent of the 1973 Oil price shock plus the 1929 Financial crisis, and they are still standing!” exclaimed Gérard Belet, Financial Advisor at the French Embassy of New York.
The US doesn’t seem to be concerned much with their public finances: Their budget deficit is growing to $482 billions next year, “but Americans doesn’t seem to give a damn about it, believes Anton Brender, Economic Studies Director at Dexia Asset management. It could easily exceed $1000 billions but it wouldn’t change anything: The US is the world’s first superpower and the whole world is ready to lend them money.”
How can the US recover from this turmoil?
The US is counting on its outstanding technological power to recover. “Crisis or not, Americans stay the Kings of innovations” reminds Pierre-André Chiapori, economist at Columbia University (NYC). In 2006, the US devoted 2.6% of its GDP on R&D expenditures, against 1.7% in Europe. And this effort won’t soften: by the end of this year the US government will inject $140 billions in researches. Plus, they devote approximately 3% of their GDP to superior education (twice as much as in France). So it is not surprising that they attract more than 600,000 foreign students and 100,000 foreign professors and researchers a year, according to the Institute of International Education. It has to be emphasized that American researches get finalized much faster then in Europe: “At AT&T, in average two patents are registered a day”
said proudly Dave Belanger, chief of the American telecom giant. 18 months ago, Apple was totally out of the cellular phone business, today it gained a preeminent status on the market by selling approximately 10 thousand iPhones through out the world. Google continues its raving growth and declares more than 25% rentability.
Briefly, while the car industry seems to be declining, the high-tech sector is flourishing and therefore this creates a new rebound opportunity for growth with the so-called “green business”. Nevertheless, they remain the most polluting country on this planet with ¼ of CO2 emissions, the US owns approximately half of the patents concerning “clean energy”. “This sector could replace the e-commerce and therefore boost the economy” said economist Graciela Chichilnisky. According to Apollo Alliance, a pro-clean-energy lobby based at San Francisco, Spending $300 billion in ten years would be enough to create 3 million jobs.
After Ford T’s blue collars and Wall Street’s white collars, America is about to lift off thanks to its green collars.
Who’s next? Since the subprime mortgage crisis began in summer 2007, 20 financial institutions have had to close their doors. The prestigious investment bank, Lehman Brothers went bankrupt with a 613 billion debt, leaving 25,000 employees on the street. Witnessing the Bear Sterns collapse and the acquisition of a hobbled Merrill Lynch by Bank of America, has revealed fresh evidence that the turmoil deluging Wall Street is equal-opportunity.
How bad is it?
This is the worst financial crisis in 60 years, and it has shaken the banking system to its foundations.
For those who were in doubt, the previous weeks’ tumbles made it obvious: America is in a serious crisis. “The worst since World War II”, said Alan Greenspan ex-chairman of the Federal Reserve. According to the International Monetary Fund, the downturn has already cost more than 1000 billion dollars, which, on the whole, includes loans that will never be paid back.
How did we get here?
Popular opinion says that in fact it all started with the famous “subprimes”. But let’s get a deeper view on the issue from the BBC’s Business Editor, Robert Peston: “People forgot that economic cycles exist,” he said, adding, “toxic factors came together: surplus savings accumulated in the Far East and Middle East…billions of dollars looking for a “home”. And so, we had very clever investment bankers (or they thought to be very clever) in the city of London or Wall Street who created a “super highway” taking all this cash out, recycling it, lending it for ludicrously low interest rates to for example people in America who had very poor credit histories. They offered these mortgages with adverts saying “No credit history needed…you just got out of prison… no problem we’ll give you a mortgage!” Then these mortgages were repackaged by the same bright people into securities and then with the help of credit rating agencies and the naivety of investors all over the world this stuff was bought to be a safe investment which finally turned out to be poisoned and therefore this the trigger of where we are.”
Another important factor to explain why mortgage loans were so popular was that people’s enthusiasm overestimated an upward trend in asset prices, mistakenly thinking it would go on forever, said George Magnus, Senior Economic Advisor of UBS. Forever, once again, never came and home prices in 20 major U.S. cities are down 6.1% on average since October 2006, according to the Case-Shiller price index released by Standard & Poor's.
Thus, these high-risk credits accorded to millions of households weakened the strength of banks and raised the cost of credits which finally weighed down investments and consumption. In a single year, the “Big Three” of Detroit, Ford, General Motors and Chrysler, have seen their sales tumble by 20%, Reuters reported.
Who is to be blamed?
Roughly speaking, this crisis is situated in America and it’s been exported to the world, according to Ken Courtis, former Vice Chairman of Goldman Sachs Asia. More precisely, according to UBS’ Mangus, the US government should be blamed: “The US government was cutting taxes in a way that it shouldn’t be done.”
From another point of view, households that took out allegedly faulted mortgages could be blamed, but “you can’t blame consumers because it is somehow a natural instinct if someone is offering you a cheap loan and you want to buy a house, to take the loan and buy the house.”, explained Robert Peston of the BBC.
Alan Greenspan
“You really have to locate the blame to people who are paid to know better…Alan Greenspan…every time there was a mess he started cutting taxes and that sent a signal to bankers that if they were facing a potential problem they’ll be bailed-out by the authorities and it meant that the next time they took bigger and bigger risks, in the end with “our” money, because they knew that at the end of the day the government will bail them out.”
This opinion was ratified with the events of this year and particularly those of Friday, 3 October 2008.
This year the US government rescued several companies facing financial difficulties. In March, JP Morgan Chase bank received $29 billion enabling it to buy Bear Stearn’s assets for the ridiculously low price of $10 per share, however a month before the price was at $80 per share. In September, Fannie Mae and Freddie Mac, private agencies sponsored by the government sharing most of the mortgage loans, received a $200 billon credit from government. And American International Group, the largest insurance company in the US, was simply nationalized: the Fed allocated 80% of its capital against an $85 billion credit.
On Friday, 3 October 2008, the US Congress passed the Bush Bail-out Plan on the second attempt. The Congress had rejected the first plan on Monday, saying it would not solve the fundamental problems of the US and the world economies. US Congressmen were angered because many perceived former Goldman Sachs boss Henry Paulson, US Treasury Secretary, bailing out his mates, which was also shocking for many American people, said Robert Peston of the BBC. Following the Senate’s positive vote on Thursday, however, and after intense lobbying by its supporters, the $700 billion bail-out was passed by 254 votes to 166. The revised bill was sweetened with tax breaks and more deposit insurance to entice mainly-Republican doubters.
How much is $700 billon really worth?
Vanity Fair.com compiled its own list of other things the lump sum could have been spent on (All figures approximate). The compilation was divided in three categories:
Firstly, things that would be useful: Preventing 200 million foreclosures. Paying back US debt to Japan, with enough left over for Luxembourg or Russia. Paying the equivalent of 10 years of total international humanitarian aid at current levels. Tripling the income of the billion people in the world who are living on $1/day or less. Providing bi-weekly $100 psychotherapy sessions for every American for a year.
Secondly, things that would be a wee bit Socialist: Paying for Social Security for next 40 years. Providing healthcare for all Americans.
Thirdly, things that would be awesome: Throwing 100,000 lavish Las Vegas birthday parties with appearances by the Rolling Stones. Buying Iraq and Afghanistan, with enough left over for Sweden (or 13 Iraqs, or 90 Afghanistans), measuring by G.D.P. Remaking The Dark Knight 3,800 times.
“Government intervention is not only warranted…it is essential!” declared G.W. Bush.
Wasn’t this intervention too late? Could the Government take precautious actions way before this crisis?
The government should have intervened way sooner, for example by regulating the amount of mortgage loans that a financial institution could possess, more precisely by regulating the share of mortgage “subprime” loans of the banks’ credit portfolio. To concretize, out of a hundred loans for example only 5% could have been mortgage loans, explained Robert Sternthal investment expert at CIB Bank Hungary.
Nevertheless, the world’s “number one superpower” doesn’t sink into a Great Depression like in the 1930’s: “In eighteen months, the Americans had to face the equivalent of the 1973 Oil price shock plus the 1929 Financial crisis, and they are still standing!” exclaimed Gérard Belet, Financial Advisor at the French Embassy of New York.
The US doesn’t seem to be concerned much with their public finances: Their budget deficit is growing to $482 billions next year, “but Americans doesn’t seem to give a damn about it, believes Anton Brender, Economic Studies Director at Dexia Asset management. It could easily exceed $1000 billions but it wouldn’t change anything: The US is the world’s first superpower and the whole world is ready to lend them money.”
How can the US recover from this turmoil?
The US is counting on its outstanding technological power to recover. “Crisis or not, Americans stay the Kings of innovations” reminds Pierre-André Chiapori, economist at Columbia University (NYC). In 2006, the US devoted 2.6% of its GDP on R&D expenditures, against 1.7% in Europe. And this effort won’t soften: by the end of this year the US government will inject $140 billions in researches. Plus, they devote approximately 3% of their GDP to superior education (twice as much as in France). So it is not surprising that they attract more than 600,000 foreign students and 100,000 foreign professors and researchers a year, according to the Institute of International Education. It has to be emphasized that American researches get finalized much faster then in Europe: “At AT&T, in average two patents are registered a day”
said proudly Dave Belanger, chief of the American telecom giant. 18 months ago, Apple was totally out of the cellular phone business, today it gained a preeminent status on the market by selling approximately 10 thousand iPhones through out the world. Google continues its raving growth and declares more than 25% rentability.Briefly, while the car industry seems to be declining, the high-tech sector is flourishing and therefore this creates a new rebound opportunity for growth with the so-called “green business”. Nevertheless, they remain the most polluting country on this planet with ¼ of CO2 emissions, the US owns approximately half of the patents concerning “clean energy”. “This sector could replace the e-commerce and therefore boost the economy” said economist Graciela Chichilnisky. According to Apollo Alliance, a pro-clean-energy lobby based at San Francisco, Spending $300 billion in ten years would be enough to create 3 million jobs.
After Ford T’s blue collars and Wall Street’s white collars, America is about to lift off thanks to its green collars.
Wednesday, November 5, 2008
U.S Customs and Border Protection: A Question of Quantity Over Quality
By: Herman Lugaro
Policing America’s borders has taken on added significance and responsibility since the attacks of 9/11. The perceived threat of terrorism is largely responsible, augmenting both political pressure to prevent unauthorized border crossings from Mexico and the ongoing war on drugs. Before the war on terror, the U.S. Customs and Border Protection (CBP) mostly dealt with illegal immigrants, and drug smugglers. Now the U.S. Customs and Border Protection has the daunting tasks of managing, controlling, and protecting the U.S. borders and official ports of entry, and stopping terrorist from entering the United States with only 41,000 employees. The added treat of terrorism has made the mission of protecting the U.S. borders even harder for an already over tasked agency.
The Bush administration’s view of the importance of secure US borders could be summed up by U.S. Secretary of State, Condoleezza Rice’s April 2004 testimony to the 9/11 commission: "I will tell you that I get up every day concerned because I don't think we've made it impossible for Al-Qaeda. We're safer, but we're not safe. And as I said, they have to be right once; we have to be right 100 percent of the time."
To aid in eliminating the threat of terrorism, the Bush Administration created the Department of Homeland Security (DHC) in November 25, 2002. The DHC absorbed the U.S. Immigration and Naturalization Service. As a result, it divided the enforcement and services functions into two separate and new agencies, U.S Immigration and Customs Enforcement and U.S Citizenship and Immigration Services.
The U.S. Customs and Border Protection is the agency that now has the direct responsible for apprehending individuals attempting to enter the United States illegally, stemming the flow of illegal drugs and other contraband protecting the United States agricultural and economic interests from harmful pests and diseases, and protecting American businesses from theft of their intellectual property. As important as these missions are, the primary and most important mission of the CBP is preventing terrorist and terrorist weapons from entering the United States.
"For the first time in out nation's history, one agency has the lone responsibility of protecting out borders. As the single, inified border agency, CPB's mission is vitally importnant to the protection of American and the American people. CBP's priority mission is preventing terrorists and terrorist weapons from entering the United States, while also facilitating the flow of legitimate trade and travel,” said CBP Commissioner, Robert C. Bonner in an official CBP statement on May 14, 2007.
While preventing terrorists from entering the country may be its priority mission, the CBP has diverted most of its manpower to trying to stop the widespread illegal crossings and drug smuggling along the U.S.-Mexico border. According to the Associated Press, CBP’s border-wide staffing has increased dramatically in the past five years as political pressure to prevent illegal immigration has mounted. On the southern border, there are roughly 15,000 agents, up from 9,500 in 2004.
In the opinion of Professor Celestino Fernandez of the University of Arizona, the reason for the rise in the number of agents is that the border between the U.S. and Mexico is the most crossed border of the world. Arizona is the gateway most migrants aim at. From here, they can go to other places in the U.S. or Canada.
There are problems at the U.S.-Mexico border that take the focus of the CBP away from their primary mission of preventing terrorist and terrorist weapons from entering the United States. Across the border from El Paso, Texas, there are warring Mexican drug cartels in Juarez, Mexico that have been recently battling each other and the Mexican government for control over the profitable drug and human smuggling routes. The CBP is expected to stop the immense flow of illegal immigrants and drug smuggling, while at the same time stopping terrorist from entering the U.S.
At the northern border, the United States and Canada share the responsibility of patrolling an area that is over 5,000 miles long. Within the 5,000 miles, there are many areas which are hard to have total control over, because the border is covered by forest. The border also includes lakes Superior, Huron, Michigan, Ontario, and Erie. The huge size of the great lakes makes it possible to cross the border both ways by boat without being detected. In some portions of the border covered by land, there are no visible markers that indicate where the border is, and in some cases the only barrier that exists is a grassy median between a two-lane road on the U.S. side and another on the Canadian side.
Just like Mexico, Canada has become a global hub of organized crime. The BBC reported that organized crime gangs have set up an intricate network to smuggle marijuana, counterfeit goods and guns into the United States. This raises the possibility that for the right price, these gangs will help terrorists get safely across from Canada into United States.
In addition to the northern and southern borders of the U.S., there’s the immense task of securing large and small maritime ports of entry. An important aspect to consider in dealing with ports is the economic factor, where the U.S. plays a major role in the global economy. According to the official CBP website, the U.S. Customs and Border Protection will facilitate about $2 trillion in legitimate trade this year. The containers entering the U. S. are only allowed a limited amount of time at a port, because there’s an exorbitant amount of containers entering U.S. ports, and any slow down can put businesses at risk and cost millions of dollars.
Ninety-five percent of all trade is handled in ports across the U.S. and only five percent of steel containers are visually inspected. The head of DHS’s Domestic Nuclear Detection Office Dale Oxford revealed that right now the percentage of containers being scanned by radiological detection systems varies. On the northern border Ninety-one percent of containers are being scanned, and on the southern border ninety-six percent is being scanned. Only ninety percent of maritime cargo is being scanned. This indicates that not all cargo coming in the U.S. is thoroughly inspected. As a result, there is the possibility that a hazardous shipment or a terrorist cell can be smuggled through the border without being detected.
The Department of Homeland Security and other government agencies are helping the CBP in the enormous task of securing the U.S. borders. Nevertheless, the problem is not with the quality of the work, but the quantity of the work the CBP is required to accomplish.
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