Microsoft founder Bill Gates
Published On: Thu, Nov 3rd, 2011
The world’s second richest man and one of its most influential philanthropists will today advise the G20 to ask government to make details of Uganda’s oil agreements public.
Microsoft founder Bill Gates is also expected to ask the G20 to ensure that government declares the money it receives from its oil resources. Mr Gates’ comments come a day after a parliamentary ad hoc committee started investigating allegations of corruption and unfair agreements in Uganda’s largely opaque oil sector which is expected to generate $2 billion per year at peak production, compared to a national budget of $3 billion.
“This oil revenue should have a huge impact on the government’s ability to address the needs of millions of poor Ugandans,” Mr Gates will today tell leaders of the G20, which include the world’s richest and most powerful countries. “However, we have no insight into the country’s oil leasing arrangements, and, as a result, Ugandan citizens have no means to protect their interests.”
Mr Gates’ comments on Uganda are part of a report on financing global development he has written for the G20 meeting at the request of French President Nicolas Sarkozy, who currently holds its rotational leadership. The full report will be published today.
Mr Gates has closely been following developments in Uganda where his Bill and Melinda Gates Foundation is a major donor to health projects, and is keen to see Uganda’s oil money spent transparently on social and economic development.
Ms Winnie Ngabiirwe of Publish What You Pay Uganda, a pro-transparency pressure group, said yesterday: “For a long time now, Ugandans have asked our government to do exactly what Mr Gates is asking for. Unfortunately, our government has continued to dismiss our concerns, treating the oil and gas sector with the highest level of secrecy. Making agreements accessible to Ugandans, and publishing what the country is earning is an important step necessary for fighting against corruption and embezzlement.”
Energy Minister Irene Muloni told Daily Monitor yesterday that there was no need to worry since the oil industry in Uganda is young. “All the appropriate laws will be put in place. Uganda’s oil resources will be adequately managed,” she said, advising this newspaper to seek President Museveni’s view over Mr Gate’s presentation.
Tullow Oil is in final stages of farming down two-thirds of its interest in Uganda’s oil fields to France’s Total and China’s CNOOC. In July 2010, the US passed the Dodd-Frank Act, which calls for all oil, gas and mining companies listed in the US to publish their payments to foreign governments.
This would include CNOOC, which is listed in the US, but not UK-listed Tullow.
However, last week the European Commission proposed a new law which would implement the same requirement for all 27 EU member countries.
If adopted, Tullow and Total would have to publish their payments to Uganda unless government passes a secrecy law making it explicitly illegal for any oil, gas or mining company to publish information about their activities in Uganda.
Mr Gates is also expected to encourage Uganda to sign up to the Extractives Industries Transparency Initiative (EITI) and gives an example of Ghana, which used the initiative to raise minimum mining royalties from three to six per cent. “The problem is that EITI is a voluntary initiative, and only five African countries are currently compliant, although more are working towards it,” Mr Gates says. “All G20 countries should require the mining and oil companies listed on their stock exchanges to disclose payments to governments.”
By John Njoroge, Daily Monitor
- Uganda: Minister aims to present oil bills this year (mb50.wordpress.com)
- For Uganda, oil industry is more curse than cure (theglobeandmail.com)
- The ‘Resource Curse:’ Uganda’s Upcoming Oil Wealth is a Global Challenge on Multiple Fronts (forbes.com)
- Analysis: Rocky start for Uganda’s oil sector (mb50.wordpress.com)
- Why U.S. military in Uganda? Soros fingerprints all over it (mb50.wordpress.com)
- Uganda struggles to make oil a blessing (marketwatch.com)
- Uganda Welcomes Oil, but Fears Graft It Attracts (nytimes.com)
For the majority of a nerve-wracking summit that dragged on more than 10 hours, from 6 PM CET Wednesday to 4 AM CET Thursday morning, all attempts at progress to stem the crisis appeared to hit a wall.
But EU leaders finally made a breakthrough.
At 3:30 AM CET, we heard that they were closing talks with bank representatives on “voluntary” 50% haircuts on holdings of Greek bonds. Then we started hearing about leverage, and suddenly — at 4 AM CET (10 PM EST) — we finally got word of some agreement.
So here’s the rundown of what leaders decided (EU leaders were still pretty vague about all the numbers, however, citing estimates for most things):
– 50% haircuts on private holdings of Greek bonds through 2020. Evidently this will still be voluntary. It would cut Greece’s debt by €100 billion ($139 billion). German Chancellor Angela Merkel said EU leaders aim to see the credit swap take place in January.
– Leverage will increase the firepower of the European Financial Stability Facility by 4-5 times, to somewhere in the range of €1 trillion ($1.4 trillion).
– China and the IMF could play a huge role in the bailout. Not only has the IMF expressed interest in playing a role, French President Nicolas Sarkozy told reporters that he will call Chinese Premier Hu Jintao around midday tomorrow, presumably to discuss this.
– Greece will receive €130 billion ($180 billion) in fresh aid. We’re thinking this includes the nearly €110 billion ($150 billion) it was promised back in July.
– EU leaders believe Italy’s commitment to debt sustainability and encouraging growth, even though Italian PM Silvio Berlusconi didn’t propose any new measures to accomplish these goals in a letter he wrote to some members of the summit today.
– The European Banking Authority estimates that only €106 billion ($147 billion) in funding will be needed to recapitalize European banks and help them meet capital requirements of 9%. Turns out it didn’t actually conduct new stress tests accounting for adverse scenarios this time around. European Council President Herman van Rompuy told reporters that banks must reach this 9% ratio with only the “highest quality capital.” We’re hoping he means Tier 1 capital and will not allow banks to use riskier convertible bonds to meet this number.
– We aren’t likely to see a final roadmap on EU treaty changes until March 2012.
– A statement from the summit can be found here.
Clearly there’s still a lot more progress to be made towards truly solving the crisis. None of these steps alone — or even altogether — will do that, not to mention that the numbers we’re seeing here have not all been written in stone. Indeed, until we see EU authorities start to execute some of these proposals, it will be difficult to bank on their success.
That said, the fact that EU leaders actually made (at least preliminarily) plans on a lot of the issues they said they would — particularly after all the negative news today and earlier this week — will reassure markets that these leaders are indeed capable of accomplishing something when pressed.
Looking forward, we will be looking to see EU leaders make good on these proposals, without diluting them to ineffectiveness. In particular, treaty changes — probably the most controversial of any measures we’ve heard discussed thus far — will be key to actually mending the broken bones of the euro area.
Following last night’s big meeting — which is being greeted with a strong rally — here’s what to watch next:
We would expect the next 24 hours to be driven by how the Sarkozy call to China President Hu Jintao goes, how investors analyze the sustainability of Greek debt under this program, and the reception that the EFSF proposal will get. We are a bit surprised by the enthusiasm given the lack of detail and lack of surprise. We are also wondering how seriously investors will take the EFSF guarantees (which only apply in the event of a default), given that the banks were strongly encouraged to declare the current restructuring voluntary. Investors may fear that the EFSF – guaranteeing – governments will similarly contrive to avoid paying out on their first-loss guarantees.
- Europe’s new debt crisis agreement: the good, the bad, the ugly (curiouscapitalist.blogs.time.com)
- EU to leverage EFSF to 1 trillion euros: report (marketwatch.com)
- Watch for Sarkozy-Hu Jintao headlines (forexlive.com)
- Europe crafts debt deal that pleases markets (seattlepi.com)
By Roger James
Sep 29, 2011
The EU Commission further noted that financial firms had played a role in the current “economic crisis” and was “under-taxed” compared with other sectors, also arguing that banks must make a “contribution” back to society after the €4.6 trillion of taxpayers’ money they have received in the last three years.
Earlier this year 1,000 economists urged G20 countries to accept a similar ‘Tobin tax’. France and Germany have been joined by Bill Gates alongside other leading financial actors, George Soros, Warren Buffet and the UK’s Lord Adair Turner who have stated their support for a tax on financial transactions which could raise billions for the fight against poverty and climate change.
Gates was asked by President Nicolas Sarkozy to come up with proposals for new forms of financing for development for this autumn’s meeting of the G20 meeting of the biggest twenty economies in Cannes in November.
The next few weeks leading up to the G20 are going to be critical in deciding whether an FTT is agreed and crucially whether the resources are earmarked for the fight against poverty at home and abroad and to tackle climate change.
EU Finance Ministers next week are expected to discuss the proposal as part of pre-G20 and EU summit discussions. Public and political support is building behind an EU-wide FTT before the EU Heads of State Summit on October 17 and 18 and for a global agreement before the French G20 Summit starting on November 3.
I was heartened to see it as the leading item on the 10pm news only to be followed by interviews with City of London representatives who decried the idea claiming that about 80% of the revenues of any Europe-wide financial tax would come from London.
The UK Government is currently opposed to the idea. The UK Treasury said it would “absolutely resist” any tax that was not introduced globally because it may drive business overseas. The International Monetary Fund (IMF) on the contrary, has clearly stated that FTTs exist in all the major financial sectors already, without driving business away.
The best example of this is the UK, where we have a stamp duty of 0.5% on all share transactions. The UK’s major competitors do not have this and there certainly is no global agreement, yet it is a successful FTT that raises around £5 billion pounds each year. It is designed so it can’t be avoided and London remains one of the biggest stock markets in the world.
The Robin Hood Tax Campaign, backed by 115 aid agencies (including Oxfam), green campaigners, trade unions and faith groups is campaigning for a tiny tax of about 0.05% on transactions like stocks, bonds, foreign currency and derivatives.
It has the potential to raise £250 billion a year globally. It will not affect retail banking, which includes savings and mortgages. It will instead introduce a micro-tax on short-term, casino-style trading which employs a small number of highly paid bankers in London, not the tens of thousands employed in high street financial services.
The world faces a dramatic economic crisis but alongside our concerns we must remember that the financial crisis has driven millions of people into poverty and put many more at risk, as the world’s poorest countries scramble to fill huge budget holes with dwindling help from richer nations. Poor people in the UK are also being hit hardest by cuts. Revenue from a Robin Hood Tax could go a long way to helping make the world a fairer place by helping tackle poverty and climate change, at home and abroad.
Oxfam and others do have concerns about the apparent EU proposals. While we welcome the fact that the FTT is moving from rhetoric to reality, a significant part of the revenues should be used as Bill Gates suggested, to help poor countries facing chilling reductions in aid, trade, and investment – not just shore up the EU budget. An FTT is not a ‘Robin Hood Tax’ unless clear commitments are made to use the revenues for tackling climate change and poverty at home and abroad
That is why huge public pressure is needed to convince the government it is more costly to ignore the people than to ignore the banks. Actor Bill Nighy has been a prominent public supporter. The UK campaign alone has a quarter of a million supporters, and there are sister campaigns across the globe. A recent EU poll of more than 27,000 people found that 61% of Europeans support FTT, including 65% of Britons.
If you are reading this article please give your support to this campaign at a critical time. Many MPs have declared they are supportive – contact your own and ask them to write to the UK Chancellor and to press their own party spokespeople to come out in support. Have a look at Robin Hood Tax site for all the low down. One fun thing to do is add your own (or friend’s) face to a RHT Video. It’s great!
If a tax is agreed, it’s crucial that a commitment is made that the resources will go towards tackling poverty and climate change – not into the general EU or national budgets. Otherwise it’s not a Robin Hood tax.
We have lots of support, both expert and popular, there has never been a better time or opportunity to make the Robin Hood Tax a reality!
Roger James is a campaigner at Oxfam South West in Bristol
- The Robin Hood Tax – What is it? Who’s Behind it? Who’s Against it? (blogs.confused.com)
- A Robin Hood tax could turn the banks from villains to heroes | Bill Nighy | Comment is free | The Guardian (worldwright.wordpress.com)
- Bill Gates backs Robin Hood tax on bank trades (guardian.co.uk)
- Eurozone rescue deal has too many moving parts (guardian.co.uk)
- Adbusters demand ‘Robin Hood’ tax to restrict global financial deals (theprovince.com)
- Occupiers Have A Mascot, Robin Hood. Too Bad He Is Opposed To Their Rhetoric. (caseyhendrickson.wordpress.com)
- Who’s behind it? | Robin Hood Tax (moneeey.wordpress.com)
Oct. 20 (Bloomberg) — Angela Merkel won’t allow the euro region to split because she understands that could cause “a dark age” by wrecking the markets leading energy policy as oil supplies dwindle, said an adviser to the German chancellor.
Europe‘s 500 million residents, the wealthiest market on Earth, have led the development of technologies in clean energy, transport and communications that can drive global growth that doesn’t rely on oil, said Jeremy Rifkin, a Wharton Business School professor who has advised Merkel for six years.
“I hope they pull this off, there’s no one else,” he said yesterday in Madrid of Merkel’s struggle to boost growth as part of Europe’s rescue strategy and preserve the single currency area. “If it splits up, we’re into a dark age.”
Rifkin argues that record oil prices in 2008 pushing up the costs of everything from food to clothing rather than the collapse of Lehman Brothers Holdings Inc. was the main cause of the financial crisis. The global economy won’t return to its pre-crisis growth until it moves away from fossil fuels because rising oil prices will continually hold down expansion, he said.
The global economy sputtered again this year after oil prices surged. The European Central Bank started buying Italian and Spanish government bonds to control the sovereign debt crisis on Aug. 8, three months after oil prices reached their highest since 2008. Stock markets slumped this summer, with the S&P 500 losing 17 percent from July 22 to Aug. 8.
Germany’s deployment of renewable energy, intelligent power grids and electric vehicles leaves it best-placed to lead the world economy beyond its reliance on fossil fuels, Rifkin said. His vision involves creating an “energy Internet.”
The EU has led the global battle to limit the greenhouse gas emissions that scientists say are almost certainly the cause of global warming, establishing the world’s biggest market for carbon-dioxide emission permits in 2005. That infrastructure, as well as the bloc’s targets for transforming its energy networks over the next 30 years, would likely be wrecked if the single currency area split, Rifkin said.
Merkel meets European Union leaders in Brussels on Oct. 23 as they seek a solution to the debt crisis that has brought the euro area to the brink of recession, according to Christian Schulz, an economist at Joh Berenberg Gossler & Co. in London.
“If the euro fails, Europe fails,” Merkel said yesterday. “But we shall not allow this to happen.”
Global crude output likely peaked in 2006, the International Energy Agency said last year. Oil companies will have to spend trillions of dollars drilling in increasingly hostile environments such as the deepwaters of the Gulf of Mexico or the Arctic to meet demand, it said in its 2011 World Energy Outlook.
Merkel, Sarkozy, Zapatero
Rifkin, in the Spanish capital to speak today at a Del Pino Foundation conference, has advised Merkel, French Premier Nicolas Sarkozy and Spain’s Jose Luis Rodriguez Zapatero that the global economy’s fundamental problem stems from the end of a growth model based on fossil fuels.
Sustainable expansion will only return when officials and executives can produce “the third industrial revolution,” the University of Pennsylvania’s Wharton School professor argues in a book of the same title due to be published next month.
The shift will involve harnessing Internet technology to manage a decentralized network of renewable power generators based in homes and offices, he said. Domestic hydrogen batteries and computer software will allow consumers to buy and sell power over a smart network, he said.
“This is the completion of the legacy Steve Jobs started,” he said, referring to the Apple Inc. chief who died on Oct. 5. Energy “collecting technologies are going to get cheaper and cheaper. They are following same cost curves as computers and phones.”
Rifkin has also advised executives at companies including Samsung Electronics Co., Citigroup Inc., McKinsey & Co. and Ford Motor Co. as well as the European Commission and the U.S. Department of Interior.
–Editor: Randall Hackley
- Jeremy Rifkin on NPR: “The Third Industrial Revolution” (pointaview.wordpress.com)
- Oh boy… the Germans and EU are taking advice from Rifkin. They really are screwed (junksciencesidebar.com)
- Sarkozy issues barely veiled threat to Merkel: deal on euro or destroy Europe. (politics.ie)
- Latest Barrage Of Headlines From Europe (zerohedge.com)
- The Third Industrial Revolution? The ‘Democratization Of Energy? (mikyunglim.wordpress.com)
- Keen On… Why The Third Industrial Revolution Will Take Place in Europe Rather Than America (TCTV) (techcrunch.com)