Category: Business

The Fifth Column’s business section focuses on more than just Profit and Loss statements.

ExxonMobil’s Significant Oil Find Off Guyana Leads to Questions About the Country’s Future

U.S. oil giant ExxonMobil made waves in Guyana on Thursday June 30, 2016 by announcing it had confirmed a “world-class discovery” of oil offshore. The company said results from its exploration well in the Stabroek block, about 120 miles (193 kilometres) offshore Guyana, found between 800 million and 1.4 billion oil-equivalent barrels.

Guyana’s natural resources minister, Raphael Trotman, called the discovery fantastic news, telling News Source Guyana that “the future of Guyana has now been written and I think that this is going to send ripples throughout the world.” Minister Trotman added that the country was receiving support and guidance from the international community, including the Canadian, U.S. and Mexican governments, the European Union and the Commonwealth Secretariat.

EU Citizen? Check Your Immigration Status

The referendum has passed and if you are a non-UK citizen of the European Union you may feel some uncertainty about what is your lawful status in the UK now is.

Under current law, you can stay in the UK for three months without any conditions. Afterwards, you need to ‘exercise your treaty rights’. That means you must be in the UK in one of the categories covered by EU law. These are: jobseeker (max 91 days), worker, self-employed (requiring you to pay national insurance contributions (NICs), etc), self-sufficient (with private health insurance and no reliance of benefits), student (with private health insurance), certain types of family member of an EU citizen exercising treaty rights (eg spouse or dependent child). Currently no one is really checking this, but if for instance you are studying but do not have private health insurance, you are not exercising your treaty rights and are in the UK illegally.

A day in the life of a member of the elite Global 1%

Would you recognize this man if you passed him on the street? Maybe, but probably not. He’s made international TV news, but you won’t probably won’t find him on American news stations unless it’s in the background of a report on the activities of other people of his status. For the last three years running, the media has covered a meeting of his ilk in DC. Almost none of the participants were named in the reports.

He wakes up and checks his cell phone before he rolls out of bed. He pays particular attention to events in the Middle East and how they impact the political situation in the US. He readily admits making his living off what Americans don’t know. He puts his shoes on. For 1.3 billion of the world’s population, it would take six months of earnings to purchase them. He climbs into an SUV and drives to get breakfast. The custom SUV costs more than the net worth of 85% of the world’s population. His breakfast costs 4 times the daily wage of about half of the world. His dogs are waiting by the door when he returns home. The dogs have a better diet than about 800 million humans. Of course, the dogs are pure bred. The pair are worth more than 39% of the population makes in a year. Today, he’s having a hard time getting his day started. He was up all of last night talking to a team of other elites scattered around the world. He admits to using that team to influence the news you read.

Why Venezuelan Cheese Costs More than American Hi-Tech Headphones

The Abundance We Take For Granted

I recently ordered a pair of Bluetooth wireless sport headphones with noise cancelling technology that will interrupt the audiobook I am enjoying on my smart phone whenever I receive an incoming call. While hiking up the mountain trails that surround my rural Montana town, I will be able to carry on a hand’s free conversation through my headphones, and the audiobook will resume where I left off when I end the call. The headphones cost me $19.77, and they will be delivered to my rural Montana doorstep in two days at no extra charge. I love free markets.

In 1958, Leonard Read, founder of the Foundation for Economic Education, wrote an essay titled: “I, Pencil.” In this essay Read highlights the wonders of capitalism. While we take the common pencil for granted – we see them everywhere and they cost practically nothing – the pencil is anything but simple. Although the pencil is only made up of four components: wood, clay, metal, and rubber, none of us has ever made our own pencil, and most of us wouldn’t have a clue how to do so. As the essay describes, free markets have wonderfully brought millions of people together from many nations to produce a product as complex as the pencil in such a way that is now so inexpensive and ubiquitous that we take it for granted.

The TAP Project as an Intangible Asset

The official ceremony that took place in Thessaloniki to mark the launch of the construction of the Trans Adriatic Pipeline (TAP) that is intended to deliver Azerbaijani gas to Italy via Greece and Albania brought to mind the events of June 2013, when the European Commission officially announced the termination of the Nabucco gas pipeline project – its most ambitious – and suggested that priorities now shifted to the TAP.

The problem of how to fill the pipeline had been cited as one of the reasons for halting the construction of Nabucco, since the reserves in the Shah Deniz gas field in Azerbaijan, coupled with Azerbaijan’s contracts with Russia, had made it impossible to ensure a supply of 30 billion cubic meters of natural gas per year.

Since then of course the picture has changed for Europe’s gas markets. The current shareholders in the TAP project are BP (UK), SOCAR (Azerbaijan), Snam (Italy), Fluxys (Belgium), Enagás (Spain), and Axpo (Switzerland). However, these changes are not a favorable indication that the TAP will be either efficient or even cost-effective as a successor to Nabucco, although the new pipeline is only designed to have a capacity of 10 billion cubic meters per year, not 30.

Coca-Cola Halts Production in Venezuela over Sugar Shortage

Coca-Cola has announced that it will be suspending a few days of production in Venezuela due to a shortage of sugar.

The company, whose headquarters are in Atlanta, did not detail at what time it would restart production in the struggling country. Last week, the state-owned company responsible for processing sugar temporarily shut down production, causing problems for the globally popular beverage producer.

Coca-Cola FEMSA will be looking for alternative sources for obtaining the sugar it needs to produce its products within Venezuela. The temporary halt in production will not affect non-sugar drinks, whose production will continue as normal.

Is Nationalization of the Biggest Private Turkish Bank a Reality?

Recently, President Erdogan’s inner circles have intensified attacks on Isbank, the biggest private Turkish bank, and the pressure has only been increasing. Established in 1924 by Mustafa Kemal Ataturk, the founder of the Republic of Turkey, Isbank has been heavily criticized by pro-government mass media since 2012. Yigit Bulut, a senior advisor to Prime Minister Erdogan was the last to bash the bank last January. Bulut openly stated that the government should be managing the bank’s operations.

Isbank often falls victim of heated political debates because of its structure. According to Ataturk’s will, the Republican People’s Party (the main opposition party) is supposed to hold 28% of the bank’s shares. In his speech Bulut contested this provision, denying the Republican People’s Party’s right to be the bank’s major shareholder. He also said that the bank should be promptly expropriated and turned into a state-controlled institution.

Bulut’s remarks shook the markets causing Isbank’s shares to lose about 5% of their value the following day. The managers of Isbank were also shocked. Though there were calls to expropriate the bank in the past, it was the first explicit statement on the topic produced by a high-ranking official closely affiliated with the President. A week later, President Erdogan received a letter signed by Ersin Ozince, Chairman of the bank’s Board of Directors, and Adnan Bali, the bank’s General Manager. According to the information released by a Middle Eastern news agency Аl-Monitor, the letter contained the bank’s background and listed concerns over Bulut’s statements.

Asian Development Bank’s Money vs. Its Mouth

At last week’s Asian Development Bank (ADB) annual meeting in Frankfurt, Germany, high level officials highlighted key human rights messages. The Bank’s president, Takehiko Nakao, emphasized the importance of free speech for sustainable development in response to concerns about the bank financing governments engaged in broad and brutal crackdowns. German Chancellor Angela Merkel, the ADB’s host, said supply chains should be free from labor abuses and welcomed the bank’s new commitment to International Labour Organization standards on supply chains. But the bank has a long way to go to turn rhetoric into reality.

Azerbaijan’s government has been waging a repressive campaign against critics, a dramatic deterioration in an already poor rights record. It has arrested or imprisoned dozens of human rights defenders, journalists, and bloggers on politically motivated charges, prompting others to flee the country or go into hiding. The government has frozen bank accounts of independent civic groups and their leaders, in some cases forcing them to shut down.

Although, since March, the authorities have pardoned or conditionally released over a dozen activists and journalists imprisoned on politically motivated charges, many others remain behind bars. The authorities have unfrozen the bank accounts of some nongovernmental groups and their leaders. But existing legislative restrictions make it effectively impossible for these groups both to use the funds in their accounts and to receive foreign funding.

Gemini Just Became The World’s First Licensed Ether Exchange

Cryptocurrencies are decentralized, self-regulating digital currencies that may be used as “cash” for global trading and are based on very complex mathematical algorithms that must be approved by a majority of the community, making it practically impossible to defraud. It offers instant exchanges from anywhere in the world, with little or no charges.Gemini Trust Company, LLC is the first company in the US (and the world) to gain a license for trading Ether, a new and emerging type of cryptocurrency that is run on the platform Ethereum which, according to their website, “is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.”

Cryptocurrencies garnered hostility from the mainstream population due to its tendency to attract illegal businesses, mainly because it offers anonymity and can be used to transfer money without a trace. While their legality varies from country to country, people see their possibilities and advantages and the acceptance of digital currencies has been developing.

Recently, Japan recognized Bitcoin and a license has been issued to Bitstamp for trading bitcoins within the EU.

TTIP: we were right all along

Throughout the crisis – and ostensibly as a response to it – Europe has increased its focus on external competitiveness as a means to transform both the EU and eurozone into a huge German-style, export-led economic machine (as emphasised by the Global Europe strategy). Various experts and economists have pointed out that this is a fundamentally misguided strategy.

In recent years, however, the EU has negotiated numerous bilateral trade agreements. This has been topped by the announcement in early 2013 that the EU and the US had agreed to enter into negotiations on a bilateral trade agreement, the so-called Transatlantic Trade and Investment Partnership (TTIP).

The European Commission has always argued that the agreement is aimed at ‘help[ing] people and businesses large and small, by opening up the US to EU firms; helping cut red tape that firms face when exporting; and setting new rules to make it easier and fairer to export, import and invest overseas’. Furthermore, it contends that the TTIP, will ‘kick-start’ the EU economy by ‘generating jobs and growth across the EU’ and ‘cutting prices when we shop and offering us more choice’.

China Railway links Ethiopia to Red Sea

Nothing could be more symbolic of the decline of Europe and the rise of Eurasia than the construction of a modern railway from the Ethiopian capitol of Addis Ababa to a port on the Red Sea in Djibouti. The Rail line is being built by Chinese Civil Engineering Construction Corporation and China Railway Group (CREC). It replaces an old delapidated rail line built by the French during the period of European colonization of Africa at the end of the 19th Century.