That may be the wrong question. With Europe’s debt crisis rattling the world financial system and demand fading, the question on many executives’ and economists’ minds is whether the nation is on the brink of another large round of layoffs.It does not help that the uncertainty that has sent the Standard & Poor’s 500 index down more than 10 percent since mid-July is lingering into October when big companies start planning out their 2012 budgets. At the very least, executives said it looks unlikely that companies will start the significant rounds of hiring that would be needed to drive down the nation’s unemployment rate, currently 9.1 percent.”I think people are in the process of dialing back 2012 expectations and that will bleed into whatever they were planning,” said Michael Neal, a General Electric Co vice chairman who heads the company’s GE Capital finance arm. “My view is they continue to stay with a tight belt and I think it means less hiring than they would have done otherwise.”Weak earnings reports from JPMorgan Chase & Co and Alcoa Inc are only increasing the market’s anxiety, and the tone of executives’ comments are far from upbeat.Chief executives have already begun to echo the warning that U.S. President Franklin Delano Roosevelt made early in the Great Depression of the 1930s: “The only thing we have to fear is fear itself.”“I’m more concerned about lack of confidence than about market fundamentals,” Alcoa CEO Klaus Kleinfeld said on Tuesday. “It almost looks like the world is worrying itself into another recession and that should not be allowed to happen.”Their concern about worry has not stopped them from acting, though. JPMorgan on Thursday said it would cut 1,000 jobs from its investment banking business.THE BALL GETS ROLLING?JPMorgan’s cuts follow a much larger move by Bank of America Corp, which last month said it would eliminate some 30,000 jobs — about 10 percent of its workforce. While smaller in scale, earlier this month drugmaker AstraZeneca Plc, Level 3 Communications Inc and Verso Paper Corp all disclosed plans to cut hundreds of jobs.Some 24 percent of large-company chief executives expect to cut jobs in the U.S. over the next six months, according to a survey by the Business Roundtable. That is more than double the 11 percent who expected to cut in the June edition of the survey, but less than the 36 percent that planned to add jobs.Theirs is a darker view than that of the chief financial officers of mid-sized companies, where 68 percent expect to add jobs over the next year, down from 80 percent earlier this year, according to a GE Capital-sponsored survey.Companies are also cutting their spending plans for the United States. Wal-Mart Stores Inc, the world’s largest retailer said on Wednesday it plans to cut its U.S. capital spending by 7.4 percent next year.”If the economy continues to slow … I expect companies probably to continue to keep payroll very lean and for the unemployment rate to bump to 9.25 percent, conceivably it could go to 9.5 percent,” said Michael Yoshikami, CEO of YCMNET Advisors a San Francisco investment house with $1 billion under management. “As CFOs and (human resources) managers are planning going forward, you can’t avoid the human dynamic here. And if the outlook is very uncertain, they’re going to be very, very hesitant to make broad hiring decisions. It’s not good timing because budgets are being set right now.”PROFIT PINCHOne warning sign that more belt-tightening could be ahead is that profit growth seems to be slowing down. Most U.S. public companies report quarterly results in the coming weeks, and earnings season has gotten off to a weak start.Analysts have lowered their growth forecasts for the companies of the S&P 500 and now look for overall profit for the group to rise 12.5 percent in the third quarter, less than the 17 percent they expected at the start of July.The sharpest downward revisions have come in the finance sector, where analysts now look for profit to rise just 1.7 percent, down from a prior expectation of 15.6 percent. They’ve also lowered estimates for companies that sell basic materials like metals, telecommunications firms and sellers of consumer staples like food.The finance, retail and manufacturing sectors could all see cuts — with retailers particularly vulnerable if the holiday selling season is weak, analysts said.”We certainly are on a cusp here and it does feel as though the economy has downshifted,” said John Challenger, CEO of Challenger, Gray and Christmas, a consulting company that helps laid-off executives find jobs. “A lot of companies are coming into this last quarter cautious and they’re not optimistic … It feels like the economy could turn either way.”One hopeful sign for workers is that companies that cut head count aggressively during the recession may have little fat left to trim, making them more likely to hold off unless the economy definitively weakens.”There might be some firms that decide to preemptively cut, but I think that many firms are pretty lean and mean,” said Michael Goodman, director of economic and public policy research at the University of Massachusetts at Dartmouth. “Even though output has been growing, that’s with tens of millions of fewer workers on the job. So it’s tough to imagine too much more work being squeezed out of fewer employees in this environment.”
“We’re meeting the prospective underwriters to look at our
option on the plan,” Thaib said, adding that the IPO will be
followed by a private placement to a strategic investor.Thaib declined to give further details on how much the stake
will be offered but said Bakrieland plans to hold only 20
percent in the unit in the long term.Bakrie Toll Road currently operates a 35-km (22-mile)
Kanci-Pajagan toll-road section in Java.
($1 = 8,927.5 rupiah)
Gillard, who is staring at electoral defeat according to opinion polls, has staked her minority government’s future on the sweeping economic reform which will impose a carbon tax on around 500 of the country’s biggest polluters from July 2012, before moving to a carbon trade scheme in 2015.”Today is a significant day for Australians and the Australians of the future who want to see a better environment,” Gillard said before the bills passed with 74 votes to 72 against in the House of Representatives.Australia, the world’s biggest coal exporting nation, accounts for around 1.5 percent of global emissions, but it is the developed world’s highest polluter per capital due to a reliance on coal for 80 percent of electricity generation.The carbon legislation and a bill for A$300 million in assistance for the steel industry must now pass the upper house Senate in a vote due in mid November. The government and Green senators have the numbers to ensure the bills will become law.The carbon plan, if passed by the Senate, would see Australia join the European Union and New Zealand with national emissions trade schemes, while the United States and Japan have smaller regional schemes.GOVERNMENT CELEBRATES CARBON VOTEGovernment lawmakers applauded when the lower house vote was taken while Gillard and her ministers hugged each other and waved to supporters in the public galleries.Two previous attempts to pass laws for a carbon price failed in 2009 and was partly responsible for the ruling Labor Party decision to dump then prime minister Kevin Rudd in favor of Gillard in June 2010.The carbon price is the central plank in the government’s plan to cut carbon emissions, blamed for global warming, by 5 percent of year 2000 levels by 2020.The conservative opposition, currently ahead of Gillard’s Labor in opinion polls and on track to win elections in two years, said it would dismantle the tax if victorious and replace it with an alternative that did not explicitly price carbon.”We can repeal the tax, we will repeal the tax, we must repeal the tax. This is a pledge in blood. This tax will go,” opposition leader Tony Abbott said.INITIAL A$23 A TONNE CARBON PRICEThe bills set an initial carbon price of A$23 a tonne, and guarantees billions of dollars of compensation for big business and households, which will face higher electricity prices.Export exposed industries such as aluminum smelters and steel makers, will receive up to 94.5 percent of carbon permits for free, while Liquefied Natural Gas projects will receive effective assistance for 50 percent of emissions.The scheme sets up a A$10 billion clean energy finance fund to leverage private investment into renewable energy, and sets aside A$1.3 billion to help coal mines reduce emissions.The plan also includes an extra A$300 million to help the steel industry, which is struggling with a high Australian dollar and higher costs for raw materials.The scheme will also allow the government to buy back up to 2,000 megawatts of electricity from Australia’s dirtiest coal-fired power stations by 2020, encouraging new investment in renewable energy and gas-fired power plants.Agriculture is exempt from the carbon price, although farmers will be able to cash in on the market for carbon offsets.
* China route used to pay off debtsBy Marat GurtASHGABAT, Oct 11 (Reuters) - An independent auditor ranked
Turkmenistan’s South Iolotan gas field as the world’s
second-largest and raised its reserve estimate on Tuesday for
the deposit, underpinning the Central Asian state’s ambition to
rival Russia as a key energy supplier.British auditor Gaffney, Cline & Associates (GCA) said the
South Iolotan field, which should allow Turkmenistan to become a
major gas supplier to Europe and China, contained between 13.1
trillion and 21.2 trillion cubic metres (tcm) of natural gas.”Turkmenistan’s gas reserves are more than enough for any
potential demand over the foreseeable future, whether it be from
China, Russia, Iran or Europe,” said Jim Gillett, GCA’s business
development manager.Turkmenistan, a reclusive former Soviet republic of 5.4
million people, holds the world’s fourth-largest natural gas
reserves and is seeking to diversify exports from its Soviet-era
master Russia to China, Iran, and Europe.The desert nation plans to more than treble annual gas
output to 230 billion cubic metres (bcm) by 2030, of which it
would export 180 bcm. Gas from South Iolotan will provide much
of this increase.South Iolotan is aimed to be the major supplier to a planned
increase in gas shipments eastward to China through a pipeline
network that snakes nearly 2,000 km (1,250 miles) through
Central Asia into China’s northwestern region of Xinjiang.China received more than 4 bcm of gas through the pipeline
in 2010, its first full year of operation, and Turkmenistan has
said supplies could rise to 17 bcm in 2011 and 20 bcm in 2012,
and the two countries are planning to raise annual Turkmen gas
supplies to 60 bcm per year, equivalent to more than 60 percent
of China’s domestic gas production in 2010.Turkmenistan also supplies gas to its neighbour Iran.But the country so far lacks infrastructure to export large
amounts of gas to western Europe, and the route to China is so
far also not profitable.”The Central Asian pipeline (to China) is not so attractive
because Turkmenistan is not earning money from it, merely paying
down debt after China bankrolled the pipeline,” Andrew Neff,
Russia and CIS analyst at Global Insight said.PIPELINE TO EUROPE?While the European route offers the highest revenue
prospects for Turkmenistan, it is also the least developed and
most challenging, analysts said.Turkmen gas is crucial to the success of a European
Union-backed project to deliver energy from the Caspian region
through a Southern Corridor that would reduce Europe’s
dependence on Russian supplies.Gas from South Iolotan could theoretically be delivered to
the Caspian shore via Turkmenistan’s planned “East-West”
pipeline, from where it could cross the sea to Azerbaijan and
link up with the planned Southern Corridor route to Europe.But analysts said there was no point in European investors
developing the findings without expanding the export
infrastructure.”We remain skeptical for the European monetization option,”
said Massimo Di-Odoardo, an analyst at Wood Mackenzie in London.”Reaching a political and legal agreement to build a Trans
Caspian pipeline remain challenging, despite the renewed effort
that the European Commission is putting into it,” he added.”We don’t believe that any discovery in Turkmenistan would
change the medium term picture on the southern (gas) corridor,”
said Elio Ruggeri, who is at Italian energy company Edison
and head of the ITGI pipeline project, which aims to
transport Azeri gas through Turkey and Greece and Italy,Turkmenistan’s gas shipments to Russia, which buys Turkmen
gas for resale to Europe, have declined after a dispute between
the two countries over a pipeline rupture in 2009.Official data are hard to obtain in the secretive state,
where the word of President Kurbanguly Berdymukhamedov is final,
but industry sources estimate Turkmenistan’s current annual gas
output at 40-44 bcm per year, below the 75 bcm per year prior to
the Russian dispute in 2009.BIGGER RESERVESSouth Iolotan sprawls over an area of 3,000 sq km about 350
km (220 miles) southeast of the Turkmen capital Ashgabat.The latest estimate, unveiled by GCA at a presentation in
Ashgabat, is significantly higher than its previous forecast
three years ago of reserves between 4 tcm and 14 tcm. The upper
range also tallies with the Turkmen government’s view that the
field could hold in excess of 21 tcm.GCA said the new estimate placed South Iolotan second only
to Iran’s South Pars in terms of gas reserves, and ahead of
Russia’s Urengoy field. GCA’s 2008 forecast had ranked South
Iolotan as the world’s sixth-largest gas field.The auditor said that the current estimates for South
Iolotan’s reserves might rise further. Yashlar, a separate
field, could contain between 1.45 tcm and 5.0 tcm, Gillett said.”The current estimated data for both South Iolotan and
Yashlar may well increase still further as additional data are
acquired,” Gillett said.Gillett said it would take about three years for industrial
production to begin at the field.Four companies — Chinese state oil and gas firm CNPC,
Petrofac Emirates and South Korea’s LG International
Corp and Hyundai Engineering Co — won
$9.7 billion worth of contracts in December 2009 to develop the
field. They will drill and build gas plants.
Since reading Mullah Omar’s lengthy Eid message on his view of Afghanistan’s future, I have been trying to work out, without success, what it means for prospects of talks with the Taliban. It is a piece of evidence without context, available to anyone to bolster whatever argument they care to submit.
Pakistani writer Ahmed Rashid described the message from the Afghan Taliban leader as “the longest and by far the most forward-looking political message he has ever sent”.
“Mullah Omar does not rule out negotiations with the Americans or sharing power with the present Afghan government and he emphatically says that the Taliban have no interest in monopolizing power,” he wrote. “For the first time he admits that the Taliban have been negotiating with the Americans, but he insists these talks have been about the release of prisoners and are not a political dialogue.”
Mark Sedwill, Britain’s special representative for Afghanistan and Pakistan, said on Twitter of the message: ”Interesting shift of tone. But need Taliban to match words with action and commit to peace process.”
Mullah Omar’s message coincided with a lengthy AP story on talks between the United States and the Taliban which offered a half-full half-empty snapshot of where things stood - these had evolved into substantive negotiations, it said, before Afghan officials scuttled them by leaking the name of the Taliban negotiator.
We have known for a while that the Americans were holding direct talks with the Taliban, and according to Rashid, by acknowledging this, ”Mullah Omar is sending a clear message to his fighters that future political talks are a possibility, while signaling to the Americans that he may eventually be prepared to broaden the scope of the dialogue and those already participating in it.”
Among the more conciliatory sections in Mullah Omar’s message is a call for “a real Islamic regime which is acceptable to all people of the country. All ethnicities will have participation in the regime … Since Afghanistan has vast arable land, rich mines and high potential of energy resources, therefore, we can make investments in these sectors in conditions of peace and stability … the policy of the Islamic Emirate is not aimed at monopolizing power. Since Afghanistan is the joint homeland of all Afghans, so all Afghans have right to perform their responsibility in the field of protection and running of the country. The future transformations and developments would not resemble the developments following the collapse of communism … strict measures will be taken to safeguard all national installations, government departments and the advancements that have been occurred in private sector. Professional cadres and national businessmen will be further encouraged, without any discrimination, to serve their religion and country.”
It is fairly pragmatic stuff that you might have expected to come from a politician standing for election rather than an insurgent leader. So why I am left doubting that the Eid message represents any kind of step forward?
Well first there did not strike me as being anything terribly new in it - it is hardly a surprise that the Taliban would be willing to talk, and that any negotiations – if they were to be successful – would need to involve some kind of compromise on power-sharing.
Secondly, there is no evidence that Mullah Omar’s “shift of tone” comes in response to U.S.-led policies in Afghanistan – despite predictions made in early 2010 that an increase in U.S. troops in Afghanistan would make the Taliban more amenable to negotiations.
On the contrary, as Spencer Ackerman wrote in Danger Room ”the Taliban have managed to sustain a high level of violence in Afghanistan despite the U.S. troop surge. Violence rose 51 percent from spring 2010 to spring 2011 — putting the Taliban in a position where it might credibly claim its military strategy successful in advance of diplomacy.”
So if the ”surge” was meant to make the Taliban more amenable to talks, is the opposite true as well, that the failure of the surge has made the United States more amenable to talks? Or do success and failure both make substantive negotiations more likely? You’ll appreciate why I am confused.
In fact you can make a somewhat counter-intuitive argument that the Taliban are more likely to talk seriously if they believe the United States and its allies are preparing to leave. This is not just for the obvious reasons that they want western troops out, but also because they might calculate they would have a better chance of securing a share of power at the negotiating table than by trying to fight their way to Kabul after an American withdrawal. What we have now, however, is the worst of both worlds. On one hand, the United States aims to secure an agreement with Kabul to keep semi-permanent bases in Afghanistan after 2014. On the other hand with its economy flagging, it is open to question whether future administrations in Washington will choose to sustain a heavy and costly commitment to Afghanistan. It is difficult to see how the Taliban, or indeed any other party to the Afghan conflict, can negotiate when the U.S. position is so hazy.
Thirdly, I have not seen any evidence of progress in thinking about the terms of a political settlement in Afghanistan. As I noted in this post, talks with the Taliban are a necessary but not sufficient condition for peace in Afghanistan. They are a means to an end, but we have no idea as yet what that end would look like, how power would be distributed in an eventual settlement, and indeed what that settlement would require in terms of what is probably an inevitable rewriting of the Afghan constitution.
Or as Joshua Foust wrote at Registan.net negotiations with the Taliban do not make much sense without a notion of where they are going. “A real negotiated framework for defusing an insurgency involves creating the structures and institutions of a government so that an insurgency is unnecessary—so that the Taliban, in this case, can pursue their goals of removing foreigners and making the central government more Islamic and less corrupt without resorting to violence to do so. Demanding they accept the current constitution as is (even though the Afghan government itself doesn’t seem to think it terribly functional), and that they give up violence as a means of achieving change … not only doesn’t make sense. It is yet more evidence that the U.S. government not only doesn’t get politics, but that it actively rejects political considerations.”
In short, apart from the shift of tone in Mullah Omar’s Eid message, there is absolutely no more reason to think that conditions are any better in terms of reaching a negotiated settlement to the Afghan war than they were, say a year or so ago.
In many ways a far better test of where things are going in Afghanistan is to reread this RAND Corporation report which attempts to predict how insurgencies are likely to end based on a study of 89 insurgencies worldwide. Published in 2010, it is far enough removed from today’s context to be free from either wishful thinking (this year we have really turned a corner) or defeatism (time to cut and run).
None of the indicators identified in the report are promising for the United States and its allies in Afghanistan – insurgencies with more than two clear parties involved, as is the case in Afghanistan, tend to have longer, more violent, more complex endings; governments have less chance of winning when insurgents have sanctuary and support in another country; “anacrocies”, pseudo-democracies which do not enjoy the support of the people, are least likely to succeed; defeating insurgencies require governments to address the root causes of conflict etc etc. The report also includes useful reminders of how far tactical successes in Vietnam, particularly after the defeat of the Tet offensive in 1968, were undercut by the unpopularity of the war and strategic impatience at home – a situation not too dissimilar to the one now faced by U.S. military commanders in Afghanistan.
All in all, reading it carefully you come away with the sense that the United States and its allies have quite a weak hand in whatever negotiations they hold with the Taliban. But at least you have a better sense of what that hand is than you would by reading Mullah Omar’s Eid message and trying to guess at its implications. And perhaps also don’t forget -the Taliban have quite a weak hand too – they don’t have the popularity of a national liberation movement, or the full authority over a very fragmented insurgency.
