Economics News

A Disneyland for the Philippines’ Sex City?

A prominent Filipino politician is seeking support from the country’s Department of Tourism for his lobbying effort to establish a Disneyland theme park in the Clark Freeport Zone, a massive (4,400-hectare) trade-oriented redevelopment area that occupies the former U.S.-run Clark Airbase in central Luzon. According to Representative Carmelo “Tarzan” Lazati, “This endeavor, if successful, would bring in more visitors to the country and make the Philippines as one of the best, if not the best, tourist destinations in the world.” Although the Clark Freeport Zone does boast advanced infrastructure and a superb airport, the establishment of new “Disneyland” in the region seems unlikely. Tourism in the Clark area is currently focused on commercial sex in nearby Angeles City, as the brothels that once catered to American servicemen now attract an international clientele. Such a business hardly seems in keeping with the wholesome Disney image.

The local sex industry recently made headlines in the British publication Mail Online. One of its recent headlines screamed, “Not again! ANOTHER Wiener (and politician) faces calls to resign after ‘posing with prostitutes’ in Philippines.” As the article outlines, New Mexico county commissioner Michael Wiener was recently photographed with four “bar-girls” in his arms by Seattle-based photographer John Keatley, who was in Angels City to “document the thriving sex tourism industry there.”  Weiner denied any wrong-doing, stating that he “’just wanted to take a quick tour,’ comparing it to people wanting to see the casinos at Las Vegas, even if they didn’t gamble.”

Real estate seems to be a thriving business in Angel City, as the area seeks to attract retired men from the wealthier parts of the world. As a result, city officials consistently stress the friendliness of the local inhabitants. A recent news article on an Angeles City-based tourism site, for example, trumpets the fact that the “The Philippines ranked 8th in the list of the ‘World’s Friendliest Countries’ in the ‘Expat Explorer Survey 2011’ conducted by banking giant HSBC.” As we shall see in a forthcoming GeoNote, such a ranking is little cause for celebration, as the “Expat Explorer Survey” is deeply problematic index.

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The Cherry Export Boom In Chilean Patagonia

FreshPlaza—the global fresh produce news service—recently reported on the surge of cherry exports from Chilean Patagonia to Asia and Europe. The small town of Chile Chico (population 4,400) alone exported 270 tons of cherries this year. As FreshPlaza notes, the produce firm Cherries Patagonia now inspects and seals containers of cherries in Chile Chico, which are not opened until they reach their destinations. Orchardists in the region are optimistic about future growth, as the Asian cherry market is booming.

Over the past several decades, Chile has secured a profitable economic niche as the main producer of off-season fruit for the Northern Hemisphere, securing over half of the market. Such exports have long been dominated by grapes and apples, most of which have been sent to the United States. Chile is currently diversifying its fruit exports, focusing on such crops as peaches, plums, blueberries, avocados, and cherries.

Sweet cherries can be especially profitable, but they are highly perishable, and thus demand special care. The cherry season is also brief, but it can be extended by establishing orchards in different latitudinal zones—which is key to the current Patagonian cherry boom. Most Chilean fruit production is concentrated in the fertile Valle Central in the central region of the country. The cherry harvest here is typically over by December; to extend the season, orchards must be established further to the south, in Chilean Patagonia.

In general terms, however, southern Chile is an impossible place for fruit cultivation, as its climate is wet and raw, its topography rugged, and its soils thin and poor. But the Chile Chico region is an exception, as it is located in an area of subdued topography on the eastern side of the Andes Mountains, along the shore of Lake General Carrera (known in Argentina as Lake Buenos Aires). The climate here is dry, but water for irrigation is plentiful and the massive lake itself moderates the weather. Until the 1990s, Chile Chico was a relatively isolated town, more closely linked economically to Argentina than to the rest of Chile. The opening of the Carretera Austral (CH-7) highway at that time, however, firmly linked the sparsely settled region to the rest of the country.


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Republic of Congo/Congo Republic — and its Oil Development

Searching the internet for the Republic of Congo can be a frustrating exercise, as returns are dominated by the country’s neighbor, the Democratic Republic of Congo (DRC). The DRC is a much larger and more populous country, and its security problems and general misgovernment are considered more newsworthy. To find information on the smaller of the two Congos, a former French rather than Belgian colony, it is best to search for “Congo Republic.”

News on the Republic of Congo in the global sphere tends to be dominated by the oil industry. The country is not a huge oil producer, but it is situated in the western African oil belt, where most of the main fields are located offshore. In recent years, oil-driven economic growth has been rapid, with GDP expansion reaching almost eleven percent in 2010, but investment had been lagging. Congolese oil production has long been dominated by French and Italian companies, but that situation seems to be changing as the country seeks new investments. Bloomberg recently announced that Chevron, the second largest U.S. oil firm, would be investing $1.9 billion in Congo’s Lianzi oil field. Congo is also working with neighboring Angola, a much larger oil-producer, to develop offshore deposits. As recently reported by allAfrica:

 Two accords for development and exploration of the Lianzi trans-frontier oil field, situated in the common maritime zone between Angola and Congo Brazzaville, were signed Friday in Luanda. ….The first of the deals sets the mechanisms for the sharing of revenues from the exploration of the field that will start production in 2015, whereas the second relates to the opening of a joint account for deposit of the incomes resulting from the operations.

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Al Shabab to Ban Khat?

According to a report yesterday in Shabelle News, the radical Somali Islamist group Al Shabab has banned khat (qat) chewing and trading in the part of the country that it controls. Vehicles equipped with loudspeakers reportedly drove through the streets of towns under Al Shabab authority, informing residents that the mildly euphoric drug would no longer be tolerated. Khat consumption is widely viewed as a “grey area” under Islamic law; most Muslims in the region have no objection, but some considered it to be a form of intoxication, and hence want it outlawed.

Banning khat could generate increased opposition to Al Shabab’s brutal rule. According to some sources, some three-quarters of Somali men chew khat daily, a figure rivaling that of Yemen, normally regarded as the center of khat culture. Not long ago, Al-Shabab itself was rumored to make much of its money by importing the drug from Kenya. Khat is a big business in Somalia, worth an estimated one million dollars a day in 2010. It is also a water-demanding crop, and hence is not cultivated extensively in arid Somalia. In recent years, khat-growing has been expanding rapidly in Kenya, mostly for the export market. In several areas, Kenyan farmers have been ripping out coffee plantations and replacing them with more profitable khat trees.

Medical authorities disagree about the potential dangers of khat use. An article from The Lancet, discussed in the Wikipedia article on the substance, claims that khat has a low addiction potential and does little physical harm. Many experts, however, think that it responsible for many of the social and economic problems of Yemen and Somalia. According to a 2006 Washington Post article:

In 1980, the World Health Organization declared khat a highly addictive drug, and East African leaders have campaigned against it, saying chronic use leads to high divorce rates, wife beatings and job loss. In Somalia, opponents call the habit a national epidemic and say men who use the drug neglect their families by spending huge amounts of cash and time on it.

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Burma’s (Myanmar’s) New Currency Regime

Central bank officials in Burma (Myanmar) recently announced that they would establish a reference exchange rate of 818 kyat to the dollar in turning to a “managed float currency regime.” Burma’s currency reform marks a major step its tentative transformation into a “normal country.” Prior to the currency reorganization, Burma was characterized by a gargantuan spread between official and black-market exchange rates. The kyat has long been fixed at around 6.4 to the dollar, while the actual rate obtainable on the street varied between 800 and over 1,000 kyat to the dollar. Under the new regime, however, street dealers are giving a lower exchange rate than that announced by the central bank, disappointing tourists with offers of only 780 kyat to the dollar.

International investors are eager to enter the Burmese market, but many obstacles remain in place. Experts expect that it will take several years before Burma’s financial system operates in accordance with global norms. According to a recent article in the Wall Street Journal, foreign investors will probably have to wait until at least 2015 for Burma to ease its restrictions on foreign capital. Burma is keen to attract investment, however, as seeks to enhance its export capabilities. Its government recently announced that it is seeking to boost rice exports by twenty percent in the coming fiscal year.

Currency manipulations resulted in major problems in Burma in the 1980s. In 1985, its government abruptly demonetized its 25-, 50-, and 100-kyat notes, introducing instead 15-, 35-, and 75-kyat notes; although a limited number of old bills were allowed to be traded in for the new ones, many people lost their money in the process. According to most reports, the new denominations were selected according to numerological considerations. Two years later, the 25-, 35-, and 75-kyat notes were in turn demonetized, this time with no compensation. New 45- and 90-kyat banknotes were again devised on numerological grounds. The massive loss of money led to the so-called 8888 Uprising, which in turn resulted in the military coup d’état of 1988.

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The South Korean Push into Central Asia

The governments of Kazakhstan and South Korea signed an investment deal this week worth US$ 7 billion, focused on petrochemicals, electric power generation, machine building, and construction. South Korea is now the top investor in Kazakhstan’s state-led industrial development program.


South Korean investment in Central Asia has been growing for some time. In the summer of 2011, South Korean president Lee Myunb-bak undertook a tour of Mongolia, Uzbekistan, and Kazakhstan. In Ulan Bator, he signed a “memorandum of understanding” with the Mongolian government focused on Korean participation in mining, the development of the electricity sector, and the building of infrastructure. In Uzbekistan, he made economic deals valued at $4.2 billion, centered on the development of the Surgil natural gas field near the remnants of the Aral Sea. It was also agreed that South Korea would transfer information technology to Uzbekistan and help modernize its stock exchange system. In Kazakhstan, Lee signed deals for South Korean firms to construct two power plants in the city of Balkhash, which will eventually supply more than 7 per cent of Kazakhstan’s electricity, and build a major petro-chemical complex near the Caspian Sea.

Kazakhstan’s government foresees deepening economic ties with South Korea. Kazakh President Nursultan Nazarbaev has long regarded South Korea as a model for economic development. In the early 1990s, a South Korean economist, Chan Young Bang, drafted the original design for Kazakhstan’s economic privatization program. In 2011, Kazakhstan’s Deputy Prime Minister Asset Issekeshev reportedly commented that, “After signing the agreements, South Korea will become number one investor in Kazakhstan within the process of industrialization of the country.”

Critics contend that South Korea’s growing economic ties with Central Asia have some troubling political complications. South Korea recently deported several Uzbek refugees, even though it is suspected that they will be subjected to torture in Uzbekistan. According to U.S. embassy cables made public by WikiLeaks, Uzbekistan and South Korea agreed in 2006 to root out illegal Uzbek laborers in South Korea. Several thousands of workers from Uzbekistan are still believed to live in South Korea, but the number had been significantly larger in the early 2000s.

South Korean economic ties with both Uzbekistan and Kazakhstan are facilitated by the large numbers of ethnic Koreans living in those countries. As many as 200,000 Koryo-sarams—as ethnic Korean living in Central Asia are called—reside in Uzbekistan, with another 100,000 living in Kazakhstan. The Koryo-saram are the descendents of Koreans who were deported by the Soviet Union from the Russian Far East to Central Asia in the 1930s. The deportations were brutal, resulting in an estimated 40,000 deaths. Eventually, however, many of the ethnic Koreans in the region acquired high levels of education and reached positions of economic responsibility.

By 1989, the majority of the ethnic Koreans in Central Asia considered Russian to be their first language. Many members of the community, however, are trilingual to some extent, speaking Russian and Korean in addition to either Uzbek or Kazakh. Such widespread linguistic capabilities help smooth the progress of South Korean firms investing in Central Asia.


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New Investments in Electronics Factories in Tierra del Fuego

A recent article in Advanced Television notes that DirectTV is planning to invest U.S. $32 million in Argentina, much of which will be devoted to manufacturing set-top boxes. The devices will be made in Tierra del Fuego, in the extreme south of the country. Many of the boxes will be exported to other Latin American countries; Venezuela alone is expected to purchase up to one million annually.

The Argentine province of Tierra del Fuego, occupying the eastern half of the island of the same name, might seem like an odd place to receive such an investment. It is, after all, remote, sparsely populated (population 126,000), and harsh of climate. But Argentina has been encouraging industrial development in the far south for some time. Tierra del Fuego is exempt from VAT (value added tax) and federal income taxes. The Argentine government has targeted high tech manufacturing for the region. The city of Río Grande on the eastern coast has emerged as a manufacturing and assembly hub for laptops, high-definition televisions, and cell phones. South Korean firms have invested heavily. Largely as a consequence of such initiatives, the per capita GDP of Tierra del Fuego is roughly two and a half times the national average.

The Argentine government is keen to develop its half of the island in part for strategic regions. Argentina claims the extensive British-controlled territories of the Falkland Islands (Malvinas) and South Georgia in the South Atlantic, as well as a wedge of Antarctica, and it hopes to bolster its position by bringing people, industry, and infrastructure to Tierra del Fuego. Until relatively recently, Argentina had tussled with Chile over several islands in the Beagle Chanel. After coming to the brink of war over the issue in 1978, Argentine shifted its attention to the British-owned Falklands. When Argentina’s military government fell after the failed war, relations with Chile improved, and they are now cordial. It still rankles Argentine pride, however, that Chile controls not only the disputed islands, but also the Strait of Magellan, which separates Tierra del Fuego from the South American mainland.

Note that the Argentine city on the Beagle Channel, Ushuaia (population 57,000), is located considerably to the west of the main Chilean settlement on the waterway, Puerto Williams (population 2,300). Debates are held over which is the southernmost city in the world. Puerto Williams is located farther to the south, but its status as a city is questionable.

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Economic Disputes and Environmental Woes in Indonesia’s Booming East Kalimantan

Indonesia’s province of East Kalimantan, located on the massive island of Borneo, is by far the most economically productive part of the country. Its Gross Regional Product is almost five times the national average, exceeding even than of Jakarta, the national capital, by a substantial margin. The province’s wealth is based heavily on the exploitation of natural resources, especially oil, natural gas, and coal. Logging has also been a major source of income, although most of the central portion of the province has been thoroughly deforested. Agriculture, much of it focused on oil palms, has been expanding rapidly in this area. Not surprisingly, East Kalimantan’s population has been booming, jumping from 2,800,000 in 2005 to 3,550,000 in 2010. Immigration from elsewhere in Indonesia has resulted in a highly mixed population, as well as ethnic tensions. Javanese people now form the largest group in the province (30 percent), followed by Buginese from southern Sulawesi.

Rapid population growth and economic development have generated headaches for economic planners. Indonesian authorities have hoped to turn the core area of the province around Samarinda into a major food production zone, but according to a recent article in the Jakarta Post, overlapping land claims and mining disputes are “threatening to scuttle” the entire project. Coal mining has been held back by a legal dispute pitting London’s Churchill Mining Plc against Indonesian’s Nusantara Group over what is reported to be the “world’s seventh-largest undeveloped coal asset.” Churchill recently announced that it would seek international arbitration against Indonesia, claiming that “it has been subjected to a sustained campaign to expropriate its rights as a legitimate foreign investor…”

Environmental issues also loom large in East Kalimantan. Although most of the province is devoted to commercial logging and agriculture, sizable areas have been set aside for natural preservation, including the 2,000 square kilometer Kutai National Park, noted for its orangutan population. A recent report, however, claims that “Orangutans in Kutai National Park in East Kalimantan face a bleak future unless urgent measures are taken to stop wildlife poaching and illegal logging in the ostensibly protected area.” Local elephant populations are also in trouble. In late February, the Jakarta Globe reported that a herd of starving elephants was “ransacking villages for food in the Tulin Onsoi subdistrict of Nunukan, East Kalimantan, destroying farms and angering residents who are threatening to kill the protected animals.”  According to local residents, “the forest where elephants used to live had been razed by palm oil plantations and mining companies.” The Borneo elephant, also known as the pygmy elephant, is a severely endangered animal. Scientists are unsure whether it forms a separate subspecies of the Asian elephant.




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Pressure for Land Reform Heats up in Namibia

The president of Namibia recently expressed deep dissatisfaction with the slow pace of the land reform program, which aims to transfer commercial farm ownership from the country’s White minority to its indigenous majority. The Namibian program relies heavily on government-facilitated loans and is based on a “willing seller/willing buyer” framework. Such efforts have thus far resulted in the transfer of approximately 1,000 out of the country’s 4,000 commercial farms “to previously disadvantaged Namibians” (as the Wikipedia puts it).

Although pressure is mounting to increase the pace of land reform, Namibia does not want to follow the path of Zimbabwe, where forced farm transfers destroyed the country’s commercial agricultural economy. According to a recent allAfrica article, the Namibian effort is currently focused on the southern part of the county, where “hundreds of farms are lying idle.” One problem, however, is the fact that the “intended beneficiaries are reluctant to move into these farms.

The majority of Namibia’s commercial “farms” are not agricultural lands per se, but are rather vast, uncultivated pastoral holdings devoted to the raising of cattle and sheep. Most of the central and southeastern portion of Namibia is divided into such large private parcels, but most of the country’s rural population is found in the rainier far north, where subsistence agriculture is the economic mainstay.

The Namibian government is trying to encourage meat exports, hoping to bolster the commercial sector. Scandinavia is seen as a particularly promising market. As the country’s main newspaper reported on March 14, “Meat industry representatives from Sweden and Norway were scheduled to arrive in Namibia this week to discuss meat exports to those Scandinavian countries.” The article also noted that, “a visit from representatives in the meat industry from Iran is also earmarked in the near future.”

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India Fighting Bull Semen Smuggling Ring

Ongole BullAccording to a recent article in The Hindu, The government of Andhra Pradesh in India has recently put all airports and seaports in the state on high alter, due to concerns about the smuggling of genetic material by organized crime syndicates. The material in question is “semen of the Ongole bull, acclaimed as one of the world’s best bovine [breeds] available.” In late February, suspicions were raised after “agents of a foreign concern made a vain bid to transport 124 Ongole bulls/bullocks by containers suspectedly to Bangladesh en route to Brazil, Switzerland etc.”

Ongole bulls have long been exported; according to the Wikipedia, “The Brahmana bull in America is an offshoot of the Ongole.” India wants more control over the process, however, and calls have been made to patent the animal’s genetic material.

The Indian website “Breeds of Livestock” provides interesting background on the development of the breed:

Before organized efforts of the colonial rule, the institution of Brahmini Bull system in the ongole area has substantially improved the breed by avoiding inferior breeding and inbreeding. It has been the custom in the area that dedicating a young bull selected by a village committee funded by village rich men or the local deity and the bull being branded at a ceremony either with Sanku, Chakra, Trisul, then becomes common property and Brahmini bull is the property of the village and covers the village herd, this is how a small farmer provided the stud services.

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Foxconn Expands in Minas Gerais

The Taiwanese company Foxconn (Hon Hai Precision Industry Co., Ltd) has appeared often in the global news in recent months, owing largely the labor practices of its Chinese plants that make iPhones and other popular electronic devices. According to the Wikipedia, Foxconn factories “assemble around 40 percent of consumer electronics products in the world.” The company is the largest private employer in China.

Foxconn’s production facilities have recently been spreading across much of the world. The company runs factories in India, Malaysia, Mexico, and several parts of Europe. It is currently the Czech Republic’s second largest exporter. The firm has recently turned its attention to booming Brazil. In February 2011, Foxconn announced that it would begin making touch-sensitive screens in the Brazilian state of Minas Gerais, planning a US $2.5 billion investment. Overall, Foxconn investments totaling US $12.5 billion are scheduled for Brazil.

Foxconn is not the only multinational corporation to announce major investments in Minas Gerais. On March 5, “CNH signed a Memorandum of Understanding with the state of Minas Gerais (Brazil) to lay the groundwork for a R$600 million investment in a new construction equipment plant …” CNH Global N.V, a subsidiary of Fiat Industrial, is an Illinois-based company with 28,800 employees, best know for its New Holland and Case construction-equipment brands. Rapid Brazilian economic growth has created a hot market for construction equipment.

Minas Gerais is little known outside of Brazil, yet it is an extremely important place. With roughly twenty million people, it is Brazil’s second most populous state, and it ranks third in terms of economic output. The state capital, Belo Horizonte, is Brazil’s third largest urban zone, with 2.5 million inhabitants in the city proper, 5.5 million in the official metropolitan area, and 9.0 million in the expanded metro area.

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Labrador Community Demands Drone Squadron

Happy Valley-Goose Bay (population 7,500) is pressing Canadian Prime Minister Stephen Harper to fulfill a campaign promise of several years ago and establish a drone squadron at the Canadian Forces Base (CFB) located in the remote community.  During the Cold War, CFB Goose Bay had been a major military facility, used heavily by NATO. In more recent years, the base has been employed by the British, German, and Italian militaries as a training facility. Currently, however, the Goose Bay’s extensive facilities are little-used, even though the Canadian government has recently spent some $20 million in upgrading the airfield and as much as $300 million in environmental clean-up. As the Wikipedia explains, “the base continues in its role as a low-level tactical training facility and as a forward deployment location for Canadian Forces Air Command, although the total complement of Canadian Forces personnel numbers less than 100.” As result of the military drawdown, the economy of Happy Valley-Goose Bay has suffered. If a drone facility is established at Goose Bay, it will be used mainly for the surveillance of Canada’s sparsely populated Arctic region.

Happy Valley-Goose Bay is situated next to an unusual geographical feature, Lake Melville. Although located well inland, sizable Lake Melville is connected to the ocean through the narrow Hamilton Inlet. Information on this water-body is difficult to find and often contradictory. The Wikipedia article on the lake describes it as a “saltwater tidal extension of Hamilton Inlet,” yet another Wikipedia article describes it as “freshwater lake Melville.” I imagine that the eastern part of the “lake” is brackish and that the western part is essentially fresh, but I have not been able to find confirmation.

Although the economy of Happy Valley-Goose Bay is depressed, that of the province in which it is located, Newfoundland and Labrador, is doing relatively well.  For many years, it was a deeply depressed province, owing largely to the collapse of the cod fishery. Offshore oil, however, has resulted in a minor boom. As summarized by the Wikipedia, “Unemployment rates decreased, the population stabilized, and saw moderate growth, and the province recorded record surpluses which rid it of its ‘have not’ status.” Recent discoveries indicate that Newfoundland may have massive shale oil deposits as well. Exploiting such resources, however, would demand fracking, and hence would be environmentally controversial.

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Sweden Arming Saudi Arabia

Wikipedia Arms Exports Table

Wikipedia Arms Exports TableSpace War reports today that Sweden, “has in secret been helping Saudi Arabia plan the construction of an arms factory to produce anti-tank missiles,” citing Swedish public radio as its information source. The report further claims that the Swedish Defence Research Agency has been involved with the Saudi armaments industry since 2007.

Sweden’s Green Party was not pleased with the revelation, and has demanded an investigation. One of the leaders of the party stated that, “Sweden should not ruin its good reputation by supporting the militaries of dictatorships.”

Although Sweden has a pacifistic reputation, it is a major arms exporter. According to the Wikipedia, Sweden occupies the 8th highest position in this global industry, selling more weapons abroad than Italy,  Israel, or Ukraine.

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The US Virgin Islands after the Shuttering of the Hovensa Refinery

Until recently, Hovensa in the U.S. Virgin Islands was one of the world’s largest petroleum refineries, with a capacity of almost 500,000 barrels per day. As of this month, Hovensa is no longer refining oil, but is merely serving as a storage facility. Some 1,900 workers have lost their jobs as a result, devastating the economy of St. Croix and, more generally, that of the U.S. Virgin Islands. Estimates are that unemployment in this U.S. territory will jump from 9.6 per cent to 18.7 percent. The local government has already reduced public salaries by eight percent and has laid-off 500 state workers to deal with budget shortfalls. According to local sources, “The Hovensa announcement has caused a universal shudder of fear and anxiety to pass through our islands. … Unlike a hurricane, we had no warning this was coming, no time to prepare, to adjust to the possibility that we might be hit.”

Corporate officials claim that the refinery lost more than one billion U.S. dollars over the past few years due of weak demand and high operating costs. Hovensa has also been hit by environmental regulations, paying a US$5.3 million fine in 2011 for Clean Air Act violations. The facility may also have had difficulties stemming from its unusual ownership structure: Hovensa was a joint venture of Hess Corporation of New York and state-owned Petróleos de Venezuela, S.A. (PDVSA).

It is not clear what, if anything, could replace the employment lost at Hovensa. The Virgin Islands government wants to encourage renewable energy, and the U.S. administrations thinks that rum exports will increase, but neither seems like much of a replacement. Tourism is the islands’ main economic activity, generating about seventy percent of GDP, but it is unclear how much more the tourism sector can expand. Perhaps greater benefits can be realized by the current broadband internet construction project, which will entail “244 miles of new fiber cables connecting over 700 pieces of network equipment, and will establish or renovate over 45 public computer centers throughout the territory.”

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Burma’s Electricity Quandaries

In late 2011, Burma surprised the world by cancelling the massive, Chinese-financed Myitsone dam in Kachin state. In early 2012, the Burmese government again astounded many by suspending an $8 billion, 4,000-megawatt, coal-fired power plant at Dawei in the southern part of the country, due mainly to environmental concerns. As reported by Bloomburg, “the Dawei project, undertaken by Thailand’s Italian-Thai Development construction company, is to be a massive heavy industry zone with a total investment of more than $50 billion, and the cancellation of the power plant may hinder its development.” Reuters has also cast doubt on the Dawei project, which Burmese officials had hoped would become the “new global gateway of Indo-China.”

Although environmentalists were delighted by the cancellation of the dam and power plant projects, many Burmese are concerned about the country’s chronic shortage of electricity. Admittedly, the Dawei project would have been of little help on this score, as most of the power generated would have been exported to Thailand, just as most of the electricity from the Myitsone dam project would have gone to China. But the question remains open as to how Burma can supply itself with adequate electricity. Although the country has large supplies of natural gas, most production is locked into long-term export contracts with China and Thailand.

As The Irrawaddy summarizes the situation: “Amid all the expansive talk of Burma being on the cusp of an economic boom, with special business zones, ports, railways, factories and half a million tourists queuing at the door, there’s one very vital ingredient missing—electricity.” Or perhaps more than one; the same article concludes with a quotation noting that, “Corruption, a weak legal system and judiciary, continuing human rights abuses and a lack of protection for investors are significant risks that may take some time for Myanmar [Burma] to fully address.”


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