Tuesday, February 07, 2006

Sideswipe

Needing new meal ideas? Peas in Potato Boats looks delicious in this ad for Birds Eye Frosted Foods, 1949. (Source: copies of vintage ads can be bought by visiting this link)

By Ana Samways

Most embarrassing moments #2: A reader writes: "While at a tsunami benefit concert at Western Springs last year, I inevitably needed to go to the toilet. I wandered through the crowd and found the ladies. Because of hygiene, I always "line the seat". I did my business and walked back through the thousands of people to my possie at the front. While dancing and enjoying myself, I felt a tug from behind. A fellow reveller was pulling the metre-long toilet paper out of the back of my pants that I must have collected off the seat. I was mortified."

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Hassle-free: those thinking of filling out their Census form online "will need an internet ID (which will be on your paper census form) and a household PIN (personal identification number)", says the Statistics NZ website. The Census collector will deliver the forms and the PIN. "You will also need to have the appropriate security settings. You'll need an up-to-date browser with 128-bit SSL (Secure Socket Layer) encryption and all the appropriate security settings enabled." But wait, there's more ... "As for all internet transactions, you should be running up-to-date firewall, anti-virus and anti-spyware software."

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A reader's desire for Sky TV falls on deaf ears:

Me: Hi, I'm a potential customer and I'd like some information.

Sales woman: What is your account number, please?

Me: No, I'm a potential customer and I just want to ask a few questions about your services.

Her: I understand, but I need your account number.

Me: Do you know what potential means?

Her: (Slightly irritated.) I'm sorry, if you won't give me your account number I'm unable to help you.

Me: Goodbye.

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A report from Christchurch says a student and solo mum who advertised for a "sugar-daddy" to finance her studies received 60 replies. She interviewed 10, looking for someone "preferably married, because then they don't want to rescue me or say they love me or look deep into your eyes or anything". For about $200 a week, the sugar-daddy would receive two meetings in a motel room for sex. For just one sexual meeting, he would also get a coffee or lunch date. Hmmm, sex or a creamy latte with biscotti ... tough call for a Jafa.

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A Saudi man is in hospital after his divorced parents forced him to marry four times within six months. The battle began when the father insisted the boy should marry a girl from his side of the family. The mother retaliated by ordering him to wed a girl from her side, reports Arab News quoting Al-Watan Daily. But the father wasn't happy with the balance of power and insisted on a third wife from his side, to show who was boss. The mother, not to be outdone, then demanded that her son include another wife from her side of the family. The son has now been admitted to a hospital for psychological treatment. He is refusing to see his parents or his wives. (source: ananova)

Editorial: Zoning the culprit at Grammar

As every new school year begins we are hearing the same story. Parents desperate to get their child into a high school of their choice are trying to sneak around the zoning system. They are temporarily renting a house, or even just a room, or using a relative's address in the zone of the desired school, and the school is obliged by present law to take them.

They arrive to enrol just as the school is preparing for the new year and cause great inconvenience to its planned classes and timetables. Auckland Grammar School, where demand for places is greatest, had 80 such applicants last week. It has been driven to appoint an enrolment officer, whose job it is to check that prospective students are bona fide residents of the zone, and it has closed its roll for the time being, even to applicants in zone, though legally it is obliged to take them.

It is easy to portray the parents as the villains of this problem, as though it was a social offence to go to any lengths to get your child into the school of your choice. They are not the villains, they are obviously parents to whom their child's education is extremely important but for one reason or another - most likely their limited wealth - they do not have a permanent residence in the zone.

The blame for their plight, and that of the schools they try to deceive, lies squarely with education policy-makers who would dearly like to draft every child into the nearest school. In the egalitarian ethos of the policy-makers, every school is, or should be, as good as any other and it is most desirable that every school should retain the full range of pupils in its neighbourhood. They believe that if education was deregulated the most able students would congregate in a few prestigious schools and the rest would languish.

That might happen for a short time. But quite quickly more schools would emulate the prestigious ones to cater for what would be a big unsatisfied demand. Before very long the entire education system would be modelled on the schools that attract most people. That is how all markets work. Poor neighbourhoods do not have inferior supermarkets or petrol stations, nor would they finish up with inferior schools. The inequalities of deregulation would be a transitional problem until the demand for good schools had changed them all.

State educationists probably know this but they do not like it because the kind of schools that most parents prefer are not the kind that educational professionals think are best for society. Most people, given a choice, seem to prefer "conservative" schools with old-fashioned academic habits, uniforms, discipline and sporting values. Public education policy is made largely by theorists and professionals, especially the teachers' unions, who hold quite different interests, attitudes and priorities. Deregulation directly threatens their power and they respond with inordinate fury and fear to any policy that points in that direction.

Zoning exposes their egalitarian arguments to be a sham. There is nothing egalitarian about a system that closes the schools of choice to all but the people who can afford real estate in their zone. The policy-makers argue that choice is a sham because it is the schools in demand that could do the choosing. That would be so until most schools adapted to the demand, but even in the interim, it is fairer to give good pupils a shot at selection by a school of their choice rather than draft them into the nearest.

And, as we hear at the start of every school year, drafting has not worked anyway. Families find all sorts of ways to break into the zone of their desired school and, worse, many schools are left languishing with low rolls and no likelihood of improvement while zoning lasts. It is the culprit.

Peter Nowak: TelstraClear practises art of double-speak

There's a lot of hot air coming out of TelstraClear these days.

Ever since the nation's No 2 telco proclaimed in September that it was no longer going to compete against Telecom in all markets, it has been talking out of both sides of its mouth - especially last week.

TelstraClear was quick to take a shot at Telecom when that company announced its broadband numbers on Thursday. Telecom trumpeted its 279,000 residential customers in 2005 as evidence that New Zealand has "a strong and growing broadband story".

But the company also played down the fact that only 22 per cent of those customers came through wholesale, whereas the Government was expecting 33 per cent.

Telecom's competitors, including ihug, Slingshot and Orcon, jumped on the news and once again urged the Government to regulate the company.

TelstraClear wasn't far behind, saying in a press release the results were "a disaster for New Zealand".

It was an interesting choice of words, because if anything was disastrous for the country, it was the broadband deal TelstraClear signed with Telecom just last month.

The story goes back to December 2003, when the Government decided against opening up Telecom's network to competitors in a process known as local loop unbundling. Instead, Telecom's proposed "unbundled bitstream service" was instituted, wherein the company was allowed to dictate speeds and prices to wholesalers.

TelstraClear took issue with the arrangement and, in November 2004, applied to the Commerce Commission for better UBS terms. Over the next year, the company sat out of the broadband market for the most part and watched Telecom, ihug and others snap up customers.

It finally got its terms last December, but promptly squandered them for a lesser commercial agreement with Telecom a month later.

The regulated terms would have provided superior speeds and pricing, but Telecom was going to fight them with a judicial challenge. TelstraClear didn't want to risk being left out for even longer, arguing that doing the deal was the pragmatic solution.

The company also argued that just because it signed a deal, that didn't mean it was going to go quiet in the fight for regulation. It would still fight the good fight but at least it'd be selling something in the meantime.

The only problem is, that deal is going to muddy the situation by giving Telecom ammunition. The deal could "vent steam from the industry", as one analyst put it, and potentially water down any regulation.

Before its selective memory took effect in November, Telecom argued that its original 33 per cent wholesale customer number was based on TelstraClear participating. With TelstraClear not playing ball, it's not surprising Telecom failed to meet the goal. (Telecom now denies agreeing to that one-third goal.)

It's fair to say that Telecom can now project an extra 100,000 customers just from TelstraClear, probably over the next year. With the Government looking to boost broadband uptake, a chunk of potential customers this big might look appealing.

Secondly, although the speed and price details of the deal are not as good as those supplied by the commission's regulation, they are better than those that exist. Speeds will go up and prices will come down, if only incrementally, alleviating somewhat the main complaints with broadband.

Lastly, Telecom says it will offer similar terms to other internet service providers, which will have no choice but to accept them. It would have been easy for the others to piggyback on the commission's TelstraClear ruling had it actually gone into effect but, now, there's no way. Without a precedent, the other ISPs are going to have to go back to square one and fight for those terms if they want them, which could take years.

The end result of TelstraClear's deal is that Telecom, by throwing it and the rest of the industry a bone, is back in the driver's seat - whereas in December, it was firmly on the back foot.

TelstraClear chief Allan Freeth's words in September are now ringing exceptionally hollow. "We're not here simply to be some type of competitive stalking horse or for anyone to suggest that competition is alive and well," he said. By signing the UBS agreement, Freeth has not helped his own cause and has potentially set back the industry as a whole.

No one is blaming TelstraClear for wanting to get into the game. After all, it has a responsibility to shareholders to make money wherever it can.

But by signing such deals, the company has lost the right to say any of Telecom's results are a "disaster for New Zealand".

Gwynne Dyer: Bush barking up wrong tree over oil

America is addicted to oil, which is often imported from unstable parts of the world," said President George W. Bush in his State of the Union speech last week. And his solution? He will cut US oil imports from the Middle East by 75 per cent, and replace the missing oil with ethanol made from fermented plant waste.

"If ... being dependent upon oil is a problem for the long term, why don't we figure out how to drive our cars using a different type of fuel?"

Not a word from Mr Bush about attacking the demand side of the equation by burning less oil, although after the 1973-74 oil embargo, the US managed to cut its oil consumption by almost 30 per cent strictly by energy conservation.

Not a word about the consequences for climate change of burning so much oil, or about the implications of soaring oil demand in the emerging Asian giants, China and India, for prices and supply. Just a promise to cut American oil imports from the Middle East by three-quarters - by 2025.

As so often with President Bush, it is hard to tell whether he is trying to fool us, or just fooling himself. Sixty per cent of the oil the United States consumes is imported, up from 53 per cent when Bush came into office.

Last year, less than one-fifth of that imported oil came from the Middle East, so achieving Bush's stated goal would only bring the share of imported oil in US consumption back to the level of 2001. And much of it would still come from "unstable parts of the world".

Actually, Mr Bush is being unfair to the Middle East, which is the most stable part of the planet in terms of the longevity of its regimes.

Perhaps he is afraid that his vaunted democratic revolutions will actually come to pass, for free elections almost anywhere in the region would produce governments much more hostile to the American presence than the present regimes. Hamas' victory in the Palestinian occupied territories is an example.

But he is also barking up the wrong tree: the real vulnerabilities of the US lie elsewhere. The three largest sources of American oil imports are Canada, Venezuela and Nigeria. Canada is stable, but Venezuela is definitely not, mainly because the US keeps trying to destabilise it.

The Bush Administration loathes President Hugo Chavez for his socialism and his closeness to Fidel Castro, and has already been implicated in one attempted coup against him in 2002. If there were to be another attempt, and Chavez suspected American involvement, an embargo on Venezuelan oil exports to the United States would be pretty much a certainty.

As for Nigeria ... "It must be clear that the Nigerian government cannot protect your workers or assets," declared the Movement for the Emancipation of the Niger Delta (Mend) in an email last month to oil companies working in the region.

"Leave our land while you can, or die in it. Our aim is to totally destroy the capacity of the Nigerian government to export oil."

Since mid-December, two major pipelines have been blown up in the Niger Delta, home to all of Nigeria's oil. Nine people were killed in an attack on the Italian oil company Agip. Four foreigners were kidnapped from an offshore rig and later released, presumably on payment of a large ransom.

And at least 17 people died in a motorboat raid on a Shell flow station in the swamps around Warri.

Mend is the latest expression of the seething dissatisfaction of the region's 20 million people with the fact that all that oil has brought them so little prosperity.

All of Nigeria's 129 million people have a legitimate grievance, for most of the $350 billion the country has earned from oil exports in the past 50 years has been stolen by a narrow politico-military elite, but only the people of the Delta live amid the pollution that the oil causes, and only they can take direct action.

Moreover, the protest groups and the guerrillas are often tangled up with the criminal gangs who siphon off oil from the pipelines.

The major foreign oil companies operating in the Delta (Royal Dutch Shell, Chevron, ENI and Exxon) have long turned a blind eye to this "bunkering", as it is known, in return for being left alone to get on with their operations, and the gangs restricted their stealing to about 10 per cent of Nigeria's oil. But with the passage of time they have got richer, more heavily armed, and greedier.

The Nigerian government seems helpless to do anything about security in the Delta. The double threat of political guerrillas and criminal gangs has become so severe that Stakeholder Democracy Network, an anti-corruption group active in the area, suggested in a report last month that "Shell and [other] foreign oil operators may have to go offshore altogether by 2008 as security and public order deteriorate".

And who would then buy the onshore oil facilities, assuming that Mend had not destroyed them?

Probably China, which is willing to accept higher levels of risk than strictly commercial companies to have secure long-term oil supplies.

If Mr Bush insists on treating oil as a supply rather than a demand problem, he should at least find the right trees to bark up.

* Gwynne Dyer is a London-based independent journalist whose articles are published in 45 countries.

Michael Richardson: China may bridge impasse

South Korean officials are optimistic that Chinese diplomacy will revive the stalled negotiations to get North Korea to abandon its nuclear programme.

They hope that the six-party talks, hosted by Beijing, may resume later this month after being in recess since November.

One hitch is that the United States is continuing to press charges that North Korea is involved in large-scale counterfeiting and distribution of US currency and that this, with drug smuggling and other illicit activity, is helping to pay for weapons of mass destruction.

Pyongyang has said that it will not return to the talks unless the US lifts financial sanctions.

The US ambassador to Seoul, Alexander Vershbow, has said the penalties are a matter of law enforcement against "a criminal regime" and that "we can't somehow remove our sanctions as a political gesture when this regime is engaging in dangerous activities such as weapons exports to rogue states, narcotics trafficking as a state activity, and counterfeiting of our money on a large scale".

The US insists that it is enforcing the law and that this issue is separate from the six-party talks which involve Japan, Russia and North and South Korea as well as China, which chairs the negotiations.

Last month, Chinese officials arranged for the top North Korean and US negotiators to meet in Beijing, following a secretive visit in January by North Korean leader Kim Jong-il.

During his visit, Kim assured Chinese president Hu Jintao that he would "push forward" with the multilateral talks.

However, since then Pyongyang has reaffirmed that the US financial sanctions must first be lifted.

A team from the US Treasury - led by Daniel Glaser, the official responsible for combating terrorist financing - was in Seoul two weeks ago to brief South Korean officials on the evidence Washington has gathered on Pyongyang's involvement in producing and circulating large amounts of fake $100 bills, known as supernotes because of their high quality forgery.

US officials in Seoul said South Korea had been urged to join a crackdown on illicit North Korean financial activities, and that money-laundering, currency counterfeiting and weapons of mass destruction constitute a grave threat to global security.

South Korea has denied it is soft on North Korean counterfeiting.

South Korean officials say the evidence offered by the US is "pretty convincing" and that a separate investigation by the Chinese government confirmed that North Korea was "engaged in wrongdoings".

China has not commented publicly on the issue but the renewed US pressure comes at a particularly sensitive time and has prompted speculation that some hardliners in the Bush Administration want to scuttle the talks and instead try to undermine the North Korean Government by imposing a blockade and starving it of funds.

However, Washington has said that it is ready to resume the negotiations and that this should be done without any preconditions.

If Pyongyang agrees it will be a measure of Chinese influence, because the counterfeiting charges are a frontal assault on Kim's Government.

In September, the US Treasury Department accused Banco Delta Asia - which has its headquarters in the Chinese territory of Macao - of being a front for more than 20 years for North Korean counterfeiting, money-laundering and other illicit financial activities.

Although Banco Delta Asia and Pyongyang denied the charges, the Treasury halted all dealings between the bank and US financial institutions.

The following month, the department blacklisted eight state-owned North Korean firms for alleged involvement in spreading weapons of mass destruction and their delivery systems and froze assets they had in the United States.

At the same time, the US Justice Department indicted a leading member of an Irish Republican Army splinter group on charges of conspiring with Pyongyang to put millions of dollars of counterfeit US currency into circulation in Asia and Europe.

The arrest of Sean Garland and six alleged accomplices marked the first time the US has formally cited North Korea in a US court on counterfeiting charges.

US officials said at the time that the court case was part of an intensifying effort to halt Pyongyang's wide range of criminal activities.

* Michael Richardson, a former Asia editor of the International Herald Tribune, is a visiting senior research fellow at the Institute of Southeast Asian Studies in Singapore.

Eye on China: In control of the outcome

By Dan Slater

In the context of North Asia, where the likes of Japan, Korea and Taiwan have enjoyed such economic success, China has a particular distinction. It's the only country not to have benefited from large infusions of Western foreign aid.

While most of North Asia (at least, those countries that weren't battlegrounds) benefited economically from the Cold War between the West and the former Soviet Union, China had to go it alone. But it does benefit from vast amounts of foreign direct investment (FDI), which last year totalled more than US$60 billion ($87.9 billion), making it the world's biggest of recipient of such funds.

The possible problem with FDI is that, by its very nature, and unlike sharemarket portfolio investments, it leaves large parts of your economy influenced by foreigners or even dominated by foreigners.

This is a bizarre situation to be in when so much of China's rise to power has been based on regaining its independence in the face of overwhelming Western might. After all, the 1911 revolution, which toppled the Qing Dynasty, was triggered by resentment against foreign ownership of certain provincial railway lines.

This leads one to a number of reflections about how countries approach similar problems.

Renowned China scholar John K. Fairbanks often drew attention to the balance between wen (culture) and wu (war) throughout China's history.

China has always had a far less romantic view of martial glory than Europeans. China's view of the application of military force, like its attitude to business, evolved in a different way to that in the West.

Instead of a war-loving aristocracy, China often sub-contracted warfare to its more violent neighbours. These acted as mercenaries, but often relatively well armed and organised ones thanks to Chinese administrative and technological skills.

Even better was when fighting could be avoided altogether. That could be effected either through the payment of huge bribes (leveraging China's relative advantage, its more advanced economy) or of fomenting dissent among its enemies. Chiang Kai-shek did this superbly with the Americans and the Japanese during World War II, husbanding his resources for the fight against the communists he knew would follow the defeat of Japan.

Thus the Chinese state conducted a paradoxical but frequently successful policy of leaving fighting to others while managing to keep a great deal of control over the outcome. It has a similar attitude towards commerce.

As many historians have shown, the traditional Chinese state was averse to commerce as undertaken outside the approved Government monopolies and organs.

An essentially static world view was threatened by the vigour of an independent merchant class.

Merchants threatened to undermine the state in several ways. Wealth led to a love of luxury and a turning away of the self-discipline required for Confucian self-improvement. It also led to the creation of a powerbase outside the traditional hierarchy.

Consequently, merchants throughout Chinese history had to put up with periodic and violent purges against their ranks, and just as the Army was ranked low in the choice of acceptable careers, so was commerce.

But how does this apply to modern China, when so much of the economy seems under the sway of multinationals? Foreign cars, high-speed trains and planes clog up the roads, tracks and skies, foreign electronic items flood the market and supermarkets increasingly reflect Western diets and living habits.

It's tempting to see this as being in keeping with China's historical tradition. An advantageous by-product of the system is that foreign companies don't provide any political risk.

Unlike a rich and powerful domestic merchant class, the foreign element is not seeking political representation. Generally, the foreign investor focuses on profit, not any increase in rights or representation.

Of course, the generation of wealth to sustain the empire was always important. But many of these activities took place under Government monopolies, such as the vital and immensely lucrative salt monopoly.

In modern times, one can see parallels with successful state giants such as the telecom players and oil majors. They are essentially Government monopolies or duopolies generating enormous wealth for the Government while remaining well within its scope of control.

What emerges alongside this centralised and non-market-friendly system is a business culture where the role of the "broker" is the preferred one. The Government acts very successfully as a broker. It brokers the flows of foreign funds into China and lets the actual generation of wealth be taken care of by foreign companies, who have the management and technological know-how to deal with this.

The most successful brokers are the ones that mediate internationally, between the rich countries and China itself. Within this group are the US-educated Chinese who have become the "super-brokers" and who have met with some resentment from the less fortunate brokers.

Access to licences and information becomes key under this system, which is ripe for abuse by the bureaucratic gatekeepers. That's in contrast to the "disintermediation" beloved in the West and fostered by the internet.

It's possible to exaggerate the extent of Western influence. UBS China economist Jon Anderson wrote in a recent report that the foreign-funded portion of total exports had risen from 25 per cent in 1993 to almost 60 per cent now. He also estimates that the domestic content of processing imports has fallen from a peak of 35 per cent to less than 20 per cent.

However, Anderson goes on to point out that exports are only 20 per cent of China's total industrial output.

Anderson explains that within the domestic economy, foreign companies - over the past eight years - have a market share of just around 20 per cent. Import penetration has been steady at around 10 per cent.

But to take his first point, a great deal of Chinese mainland output is put out in the form of Government investment, which confirms the idea the Government plays a powerful role as broker in the domestic economy as well as in the international economy.

What could change all this is the emergence of a powerful private sector on the Western model. But despite all the attention the Chinese private sector has obtained, it's impossible to quantify. For the time being, at least, China's seems to be evolving according to a far more ancient historical pattern.

* Dan Slater is a journalist based in Beijing.