China's Silicon Valley

Zhongguancun may be
hailed as China's most famous village by foreigners. Dubbed as "China's
Silicon Valley", the country's biggest high-tech park in west Beijing is
not only home to Chinese high-tech companies such as Lenovo, Baidu and
Sohu.com, it is also the China headquarters of world-renowned technology
companies such as Google, Microsoft and Intel.

As part of China's efforts to build an
innovative economy, the State Council, China's Cabinet, recently
approved a development plan called the Zhongguancun National Innovation
Demonstration Zone (2011-2020) that allows companies in the area to try
out new measures and pilot projects.

The plan, which includes a drive to
boost the total revenues of companies in Zhongguancun to 10 trillion
yuan ($1.8 trillion) in 2020 from 1.55 trillion yuan last year, is
designed to help the area become one of the world's most famous
technology hubs. The predicted income increase will come from increased
sales on the back of tax incentives for companies moving there and
research and development subsidies.

"Zhongguancun has entered a new phase of
development," said Yang Jianhua, deputy director of the administrative
committee of Zhongguancun Science Park. "I think in the next 20 years
Zhongguancun will have the three top technology industry clusters in the
world and will form a grouping of the world's top technology
entrepreneurs."

Zhongguancun's history can be traced
back to a crowded electronic avenue in the 1980s. Close to China's top
universities and national academies, China's biggest technology hub
first emerged as a small market for electronic components and devices
for technicians and researchers.

In October 1980, Chen Chunxian, a
researcher at the Chinese Academy of Sciences, founded a technological
development service department under the Beijing Society of Plasma
Physics in Zhongguancun, making it the first civilian-run scientific and
technological institution in the area.

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Productivity: Brazil and Korea

In an article for the Economist’s “The World in 2012,” President Dilma Rousseff argues for “the Brazilian model” to be emulated by other developing countries. The essay rightly emphasizes Brazil’s record in poverty alleviation and environmental issues. At times though, Rousseff sounds off cue. For example, she writes:

We should all strive to raise wages in line with productivity, so that the recovery benefits the middle classes in rich economies and allows hundreds of millions of people to get out of poverty in developing ones. The market alone does not improve income distribution. Government action is needed.

But productivity in Brazil is woeful. Two weeks ago, Greg Michener noted on his blog, Observing Brazil, that worker productivity increased 0.3 percent annually from 1995 to 2005. Despite the general wisdom that developing countries can grow faster than developed ones, Brazil’s productivity actually declined compared to America’s over this period.

Hopefully, worker productivity has increased since 2005 and the data just isn’t available. But if so, productivity is still likely trailing wages. In an article on Project Syndicate, Paulo Levy, a researcher at the Brazilian government’s applied economic research institute (IPEA), notes a planned minimum wage increase of 14 percent in 2012.

Fact is, absent productivity gains, Brazil’s economic growth over the past decade has been powered by massive commodity exports to China. There are legitimate achievements on which Brazil can serve as a model to the world. But Rousseff’s advice on wages is inflated, and, indeed, inflationary.

Graphic from UNCTAD.

Citizens’ statement of concern about the democratic process in Pakistan democratic and safety of human rights defenders, to be released to the media on Jan 5, 2012 (to endorse, please enter your information in the form at this link)

We, the undersigned, express our grave concern that Pakistani human rights defenders are being threatened and intimidated for their stance in the ‘memogate’ case. We are also concerned at the danger this crisis poses to Pakistan’s democratic political process that had taken a step forward with the elections of 2008.

No elected civilian government in Pakistan has yet completed its tenure and handed over power to the next government following democratic elections. If the current government manages to do this, it will be a first step in an ongoing process that is essential to Pakistan’s peace, progress and prosperity in the long run.

Those under threat include former Ambassador of Pakistan to the US, Husain Haqqani, who returned to Pakistan and tendered his resignation in order to ensure a free and fair inquiry into the ‘memogate’ matter that he is accused of engineering.

The so-called ‘memogate’ affair revolves around a letter that Amb Haqqani is accused of sending to then US Chairman Joint Chiefs of Staff, Admiral Mullen allegedly at the behest of Pakistan’s President Asif Ali Zardari, seeking American help to prevent a military coup in Pakistan. Mansur Ijaz, an American businessman of Pakistani origin, delivered the note to former US National Security Advisor Gen. James Jones to pass on to Adml Mullen allegedly at Amb Haqqani’s behest. Amb Haqqani has denied writing any such memo at anyone’s behest or asking Ijaz to deliver it to anyone.

Amb Haqqani has been barred from leaving the country, which is a denial of his fundamental right as a free citizen of Pakistan. Under threat both by the ‘religious’ extremists and the security agencies, he is currently a virtual prisoner confined for his own safety to the Prime Minister’s residence.

Also facing threats is his lawyer, former Supreme Court Bar Association President, Asma Jahangir, who has termed the Supreme Court judgment of Dec 30, 2011 a “victory” for the security establishment that she alleges is behind the case.

Amb Haqqani’s wife, Farahnaz Ispahani, a Member of Pakistan’s Parliament, also threatened, is currently in the US where she had come for medical checkups. Columnist Marvi Sirmed, who has written fearlessly against the ‘religious’ extremists and in support of Amb Haqqani, has also been receiving threats, Columnist Marvi Sirmed, who has written fearlessly against the ‘religious’ extremists and in support of Amb Haqqani, has also been receiving threats, as has senior journalist Najam Sethi. There are numerous other journalists and activists who live under threat for their outspoken views; some are forced to seek politial asylum abroad. This is essentially the case with anyone in Pakistan who counters or challenges the narrative of the ideological security state.

Without going into merits of the case, obvious contradictions in the ‘evidence’, or political motivations behind it, it is evident that it is at the crux of a matter vital to Pakistan’s politics, that is, whether Pakistan is going to be run by a civilian elected government along the lines of a parliamentary democracy that ensures fundamental rights, or along the lines of a ideological narrative dictated by the security establishment that holds fundamental rights subservient to its interpretation of ‘national security’.

Too many people in Pakistan have fallen to the ideological monster unleashed by the establishment pursuing a narrow, ideological interpretation of ‘national security’. It is time for a fundamental paradigm shift in Pakistan’s politics, to allow the nation to fulfill its potential as a progressive, forward looking South Asian nation at peace with its neighbours and the world. We urge the Pakistan government, judiciary and security establishment to play their constitutional roles, cooperate with each other and focus on re-establishing the rule of law and in order to make this possible.

In the meantime, be aware that the world is watching to ensure that no harm comes to those who are taking a stand towards this end.

Endorsed (listed alphabetically; names still coming in are being updated; please endorse at this link):
• A. Chhachhi, Sociologist, Netherlands
• Abdul Ghafoor Chaudhry Social Activist Canada
• Abdul Hamid Bashani Khan, Barrister, Solicitor & Notary Public, Canada
• Abdullah Hussein Novelist Lahore
• Afzal Tahir Kashmir International Front/United Kashmir Journal, London, United Kingdom
• Ahmad Rafay Alam, Lawyer
• Ali Kazmi Student Islamabad, Pakistan
• Ali Arqam Blogger, Social Activist Peshawar
• Ammar Yasir, Marketing Head, Tea Break Networks Karachi
• Annie Syedah Student United States
• Anushka Jatoi Student Karachi
• Asif Khan Earth Day Network Washington DC
• Ayesha Humayun Khan Citizen of Pakistan Dubai
• Ayesha Jalal, historian, Boston/Lahore
• Ayesha Siddiqa, Political Scientist, Pakistan
• Beena Sarwar, journalist
• Faisal Mahmood Officer in National Bank Malir
• Faraz Sheikh, social activist, Lahore
• Farooq Tariq, spokesperson Labour Party Pakistan, Lahore
• Fazil Jamili, Poet, Journalist
• Fakhar Ul-Islam Project Manager United Kingdom
• Fayaz Ahmad Historian Peshawar
• Ghazi Salahuddin, journalist and columnist, Karachi
• Hamad Ur Rehman CEO/ a human and social rights activist. Lyallpur.
• Haris Gazdar, researcher
• Harsh Kapoor, South Asia Citizens Web (sacw.net)
• Ibrahim Sajid Malick, Technologist, New York
• Dr. Ijaz Khan Professor of International relations University of Peshawar
• Dr. Ilmana Fasih, physician, health activist, blogger Canada
• Iqbal Alavi, social activist
• Irfan Mufti South Asia Partnership Pakistan Lahore, Pakistan
• Kamyla Marvi Citizen Karachi
• Khawar Mumtaz, Shirkat Gah. Pakistan
• Kiran Nazish Journalist, Activist, Lahore
• Karamat Ali, Labour Rights and Peace activist
• Meera Ghani, Environmental and Peace Activist, Belgium
• Mehmal Sarfraz, Journalist, Lahore
• Mehr Alwy Finance Manager UK
• Michael Renner Researcher U.S. / Germany
• Dr. Mohammad Taqi, Physician & Columnist
• Muhammad Idris Khattak Researcher OSI Pakistan
• Mohsin Sayeed Journalist Karachi
• Moniza Inam, journalist, Dawn, Karachi
• N. D. Pancholi, Secretary, Indian Renaissance Institute, Ghaziabad (UP), India
• Nadeem Yousafi Businessman Peshawar, Pakistan.
• Noman Quadri, student
• Noorjehan Bilgrami Artsist Karachi
• Dr. Osama Siddique, Law Professor, Pakistan
• Pervez Hoodbhoy, Physicist
• Dr Pritam Singh DPhil, Reader in Economics, Faculty of Business, Oxford Brookes University, UK
• Qurratulain Zaman Media Consultant, Friedrich-Ebert-Stiftung
• S. Abbas Raza, Editor, 3QuarksDaily.com
• S. M. Naseem, economist
• Saba Hamid, Actor, Pakistan
• Saba Quraishi, activist, United States
• Sabahat Ashraf (“iFaqeer”) Communcator. Citizen. Fakir. Silicon Valley, California
• Sadiqa Salahuddin, educationist, Indus Resource Centre, Pakistan
• Saleha Haque Student University of Salford, UK
• Sana Saleem Activist, Blogger Karachi
• Sarah Suhail Lawyer
• Sehba Sarwar Writer
• Shahla Haeri, Associate Professor of Anthropology, Boston University
• Shandana Mohmand, Political Scientist, UK
• Shahnawaz Student Karachi
• Shama Noman Educationist
• Shayan Afzal Khan, Citizen and activist, Pakistan
• Shahzad Ahmad Country Coordinator, Bytes for All, Pakistan
• Siddharth Nayak Managing Director , The Jurists ; President : All India Law Students Association New Delhi
• Soulat Pasha director Titan Energy Karachi
• Tahera Ahmad Physician Germany
• Tahir Saeed Senior clinical psychologist Ireland
• Tazeen Project Director, Intermedia
• Waqas Ali CRSD Peshawar
• Yasser Latif Hamdani, Lawyer
• Zeeba T. Hashmi Citizen Lahore
• Zohra Yusuf, human rights activist
• Zulfiqar Shah, The Institute for Social Movements, Pakistan Hyderabad

Countries, non-profit organizations, indigenous peoples, and natural resource companies are all interested in obtaining a part of the Arctic. Now, we can add a hedge fund to the list. Guggenheim Partners, the financial services company which manages over $125 billion in assets, has confirmed that it is looking into establishing an investment fund in the Arctic, perhaps with a focus on Alaska. Alice Rogoff, publisher of the online newspaper Alaska Dispatch and wife of the co-founder of the Carlyle Group, David Rubenstein, first announced the news at the World Affairs Council’s “Politics of Global Climate Change” conference at University of Alaska Southeast in Juneau earlier last week. Rogoff also suggested that one investment possibility for Guggenheim would be to privately fund the construction of an icebreaker, which it could then lease out to the U.S. Coast Guard. However, Lawson Brigham, a professor and retired Coast Guard captain, observed that this would likely not be practical, given that the Coast Guard would need full and unrestricted access to a federally-funded ship during war, should it ever break out in the Arctic.

Rogoff added, “The single biggest source of investment dollars in Guggenheim’s or probably anybody’s fund will be China.” This would be an indirect way for China to invest in and potentially profit from the Arctic even though it does not have any territory there. This would not be the first instance of private Chinese investment in the Arctic: Businessman Huang Nubo is planning to buy a swath of land equal to one percent of Iceland to turn into an ecoresort.

Guggenheim spokesman Jeffrey Kelley remarked, “We are in the very early planning stages for an Arctic investment fund. At this point in time it would be premature to comment further about potential structure or investment parameters.” Guggenheim reportedly posted a link to the article in Alaska Dispatch about the fund, but they seem to have removed it from their website, as I am unable to locate it.

However, a speech given by Guggenheim’s CEO and CIO, Scott Minerd, in June 2011 at the Arctic Imperative Summit in Girdwood, Alaska might shed some light on the hedge fund’s interests in the region. Minerd started his speech by giving an overview of the history of mercantilism. Some countries, such as the U.S. and Canada, got their start by trading their natural resources. They were then were able to develop other industries that did not depend on finite resources, allowing them to advance their economies beyond the mercantilist stage. Others, however, “mistook the proceeds received from the sale of their natural resources as revenues, when in reality they should have been accounted for as the proceeds received in exchange for the disposition of assets,” in the words of Minerd. They have relied on oil, gas, coal, or other resources which are decreasing overtime. Alaska, which is heavily dependent on natural resource extraction, therefore “stands at a crossroads,” along with the rest of the Arctic.

Minerd compares Alaska to an emerging market. He claims, “Alaska today could be referred to as America’s crown jewel. Within our lifetime, Alaska has the potential to become the most dynamic growth engine among all the states of the Union.” This would be a huge turnaround, since Alaska is currently the number one recipient of federal stimulus aid per capita – by far.  One researcher, David Barker at the University of Iowa, has also determined that it has cost the federal government more money to develop Alaska than it has received.

Minerd closes his speech by giving the state advice on how to locate good investors. Minerd emphasizes that the ideal capital partner will shares their talents and their money with Alaska. The state’s residents need to learn the “human capital skills” from hedge funds in order to be able to properly manage the state’s assets going forward. Minerd concludes, “Their money will help, but their human capital skills are the real resources that are to be traded for the rich natural resources of Alaska.” Whether the ideal capital partner will be Guggenheim has yet to be seen.

News Links

“Guggenheim confirms interest in Arctic fund,” Juneau Empire

“Guggenheim partners announces Arctic investment fund,” The Guardian

mistook the proceeds received from the sale of their natural resources as revenues, when in reality they should have been accounted for as the proceeds received in exchange for the disposition of assets.