GM Bankruptcy May Say ‘No Reason to Stay’ to Detroit Residents

GM Bankruptcy May Say ‘No Reason to Stay’ to Detroit Residents
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By Keith Naughton and Jeff Plungis

June 3 (Bloomberg) -- General Motor Corp.’s bankruptcy is the last thing Detroit and the state of Michigan need.

Michigan already has lost 780,000 jobs this decade, the most of any state. Its April unemployment rate of 12.9 percent was the highest in the country.

The fourth-largest U.S. city for four decades starting in the 1930s, Detroit now ranks 11th. Its population of 916,952 is less than half the peak of 1.85 million in 1950.

Now, with 6 of the 12 plants on GM’s bankruptcy hit list located in the state, Michigan and Detroit are bracing for what may be an accelerated exodus of people and jobs.

“People have no job, no home, no credit and no reason to stay,” said Bob Daddow, deputy executive of Oakland County in suburban Detroit, which expects to lose one-third of its property-tax revenue from 2007 to 2011. “We’re very much still on a downward spiral and we haven’t hit bottom yet. I don’t see anything that will be good with the bankruptcy of GM.”

One-third of the population of Detroit, GM’s hometown, lives in poverty. That’s the most of any U.S. city with more than 250,000 people and almost triple the national rate. Public schools graduate 32 percent of their students, according to a study by Michigan State University, compared with the national average of 72 percent.

‘Middle-Class Bind’

With rising white-collar job losses, the pain is seeping into the suburban ring surrounding the city, said Kevin Boyle, a Detroit native who won the National Book Award for an account of race relations in the city in the 1920s. The suburbs have a population of 3.5 million.

“It’s a terrible middle-class bind,” Boyle said. “It’s the entire state, certainly the entire metropolitan area.”

The contrast with the Detroit of five decades ago is stark. In those years, residents flowed into the area from the south and rural Michigan and landed good-paying jobs in Detroit’s factories without having more than a high school diploma.

“You were instantly vaulted into the middle class,” said Mike Smith, director of the Walter Reuther Library of Labor and Urban Affairs at Wayne State University in Detroit.

The bankruptcies of GM and rival Chrysler LLC, in nearby Auburn Hills, may doom the chance of any return to the prominence and prosperity Detroit once enjoyed as the world’s motor capital, said former autoworker Sean McAlinden, now an economist for the Center for Automotive Research in Ann Arbor, Michigan.

Stempel’s Experience

GM’s Michigan employment has plunged to 47,330 today from 482,000 in 1978, according to figures compiled by the center. Even if GM and Chrysler successfully reorganize under Chapter 11, their bankruptcies will result in the loss of 179,400 U.S. jobs by next year, including 35,695 in Michigan, according to a May 26 study by the research group.

“They’ve been permanently hobbled,” McAlinden said. “This is very humbling.”

“There will be a lot of grief and hard times in Michigan,” said former GM Chairman Bob Stempel, who was ousted in a boardroom coup in 1992. His time at GM was marked by large losses and job cuts, but today is much worse, Stempel, 75, said.

“I closed 18 assembly plants,” he said. “You never get over that. You worry for the communities and feel for the people.”

Detroit has tried to broaden its economic base by attracting high-tech firms and movie producers and building three casinos. The efforts have had limited success. Receipts at the casinos are falling, leading the Greektown Casino in downtown Detroit to file for bankruptcy last year.

Overcoming the Image

“There have been a lot of attempts to diversify the economy,” said Daddow of Oakland County, which is going after companies that make batteries for electric cars. “But we’re losing jobs by the thousands and only bringing them in by the hundreds.”

Luring new employers will require overcoming Detroit’s image as a city in decline, scarred by social problems and corruption, said Dennis Archer, Detroit’s mayor from 1994 to 2001. Kwame Kilpatrick, the mayor who followed Archer, went to jail last year after admitting he lied in a civil trial about an affair he had with his chief of staff.

“The city of Detroit faces enormous challenges,” said Archer, who is now chairman of the Dickinson Wright law firm in Detroit. “The economic challenges were compounded by a mayor who resigned in disgrace.”

On May 5, Detroit voters elected Dave Bing, former star of the National Basketball Association’s Pistons, as their new mayor. After leaving the NBA, Bing, 65, founded a steel company that today has about 500 workers. Spokesman Bob Warfield said the mayor wasn’t available to comment.

‘Welfare Queen’

“Immediately, his status as a professional athlete as well as a successful business person who is widely respected begins to help change the image of the city,” Archer said of Bing.

Detroit’s image is linked to its signature industry, which has taken a beating in the national discourse over bailouts and auto chief executive officers flying corporate jets to Washington last year to ask for financial aid to survive.

“We’re being treated like a welfare queen,” said McAlinden. “I don’t know how you get over that.”

Detroit and Michigan should work to transform from a low- education economy dependent on auto-factory jobs to a diversified, knowledge-based economy, according to a study co- authored by University of Michigan senior researcher Don Grimes.

Pittsburgh Example

“You have to recognize that manufacturing is not going to solve your problems,” said Grimes, who worked at a Ford factory in the 1970s. “It’s a mindset that says what we have to be is a yuppie community, attractive to educated people, particularly young people.”

He cites as an example Pittsburgh, which he says successfully transformed itself into a medical center after the steel industry collapsed.

The GM bankruptcy may be the turning point that forces the region to get on with redefining itself, said Diane Swonk, chief economist with Mesirow Financial Inc. in Chicago.

“Detroit is finally having the funeral they’ve been waiting for and they can put it to rest and start rebuilding,” said Swonk, a Detroit native whose father worked for GM for 35 years.

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前時津風親方、退職金を請求　相撲協会に

2009年6月4日10時37分

　大相撲の時津風部屋暴行死事件で傷害致死罪に問われ、５月２９日に名古屋地裁で懲役６年の判決を受けた前親方の山本順一被告（５９）＝控訴＝が最近になって、日本相撲協会に退職金を請求していたことが明らかになった。５月２８日の協会の理事会で報告された。

　日本相撲協会は今年２月、解雇された親方や力士には、退職金を支払わないか減額できるよう規定を改めた。しかし、山本被告は改正前の０７年１０月に解雇されており、この規定が適用されない可能性が高い。金額は約２千万円とみられる。理事会では「支給すべきではない」という意見が大勢を占めたという。協会は今後、弁護士らと相談して方針を決める。

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力士暴行死：前親方が２千万円退職金請求

　大相撲時津風部屋の力士暴行死事件で傷害致死罪に問われ、５月２９日に名古屋地裁で懲役６年の実刑判決を受けた前時津風親方の山本順一被告（５９）が、日本相撲協会に退職金を請求していたことが４日、分かった。協会は今年２月の理事会で、解雇した親方や力士への退職金の支払い拒否や減額できる規定を設けており、回答を保留している。０７年１０月に解雇された山本被告の退職金は２０００万円程度とみられる。

　規定改正前には、解雇者から退職金の請求があった場合に支払いを拒否できなかった。昨年８月に大麻取締法違反容疑で逮捕（後に起訴猶予）され、解雇処分となった元若ノ鵬には請求に応じて、５２０万円余りが支払われた。

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協会が元時津風親方に退職金支払い拒否

　大相撲の力士暴行致死事件で傷害致死罪に問われ、１審名古屋地裁で懲役６年の判決を受けた元時津風親方の山本順一被告（５９）が、日本相撲協会に退職金を請求してきたことについて、日本相撲協会は４日、支払いの意思がないことを山本被告側に回答していたことを発表した。理由は山本被告の亡くなった力士（故斉藤俊さん）に対しての行為によって協会側が、計り知れない大きな損害を被ったからとしている。山本被告は、１審判決を不服として名古屋高裁に控訴している。

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Telecoms groups fight off claims of illegal spying

By Joseph Menn in San Francisco

Published: June 4 2009 03:00 | Last updated: June 4 2009 03:00

A US federal judge yesterday dismissed lawsuits accusing telecommunications companies of illegally spying on Americans, citing a controversial law granting those companies retroactive immunity.

Vaughn Walker, a San Francisco district judge, ruled that Congress did not violate the constitution's separation of powers last year by allowing the US attorney-general to certify privately to the court that the companies had been asked to co-operate in an antiterrorism programme authorised by the president.

"Congress has manifested its unequivocal intention to create an immunity that will shield the telecommunications company defendants from liability in these actions," Mr Walker wrote. He added that Congress did not go too far in delegating authority to the executive branch, although he said that matter was "a close question".

Mr Walker has been weighing a number of cases since it was revealed in late 2005 that the National Security Administration was directing surveillance of international phone calls without warrants in apparent violation of the Foreign Intelligence Surveillance Act.

The original case against AT&T gained heft the next year with the submission of documents from Mark Klein, a former employee, that showed copies of all domestic as well as international electronic traffic through AT&T's San Francisco hub being diverted into a locked room.

Other employees confirmed in interviews that only those with NSA clearance could enter that room, which contained equipment for storing and sifting through data. Current and former officials in the administration of then president George W. Bush said that it was part of a second, broader programme, again without warrants, that sought to mine data.

AT&T and other companies said they could not defend themselves without revealing classified information, and the justice department backed them up. But Mr Walker had previously refused to throw the case out on "state secrets" grounds.

He wrote then that, by going public in defence of the first, international, operation, the White House had confirmed enough of its essence for the suits to -proceed.

In its unsuccessful opposition to the latest motion to dismiss, the Electronic Frontier Foundation, the civil liberties advocates, tried to poke holes in certification from Michael Mukasey, former attorney-general, that the phone companies were acting in a post-September 11 2001 anti-terror operation.

The group said Mr Mukasey stated in public that the companies were not engaged in a "content-dragnet", while its evidence showed otherwise. Mr Walker said the EFF made "a valiant effort" to challenge the private certification, considering it was barred by law from viewing it.

Yesterday's ruling does not affect cases turning on similar facts against the government itself, several of which are before the same judge. Lee Tien, attorney for EFF, said the group would appeal against the dismissal of the phone company cases.

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Kroes brands German bank system ‘obsolete’

By Nikki Tait in Brussels

Published: June 3 2009 12:00 | Last updated: June 4 2009 07:53

Neelie Kroes, the European Union’s competition commissioner, has made her strongest and most explicit call to date for restructuring the German banking system.

In an interview with a German newspaper published yesterday, Ms Kroes said she believed that Germany’s ”three-pillar” system of commercial, co-operative and savings banks was obsolete.

”It does not at all encompass the role that Germany plays and should play. Europe urgently needs a Germany that is in good form again,” she said.

Asked what measures Germany should take, Ms Kroes replied that it should ”concentrate on market structures”. Taxpayers, whose money has been used to bail out banks during the financial crisis, would not be content with the status quo, she suggested.

The commissioner’s latest remarks follow repeated comments over recent weeks in which she has stressed the need for ailing banks that have received large amounts of government aid to restructure.

Last month, for example, she said many banks would have to redefine their business models.

”For many that will mean a greater focus on retail banking,” she said, adding they might also be obliged to cut back cross-border operations and focus on domestic markets.

This view is contentious: some critics, including Axel Weber, head of Germany’s Bundesbank, have argued such changes would frustrate the goal of a pan-European banking market.

In a more specifically German context, Ms Kroes has also previously called for a ”profound restructuring” of the country’s regionally-owned banks, known as the Landesbanken.

Problems in the sector were evident well before the financial crisis. In May, the European Commission approved a restructuring plan for WestLB which will see the bank halve its asset base and change its ownership structure. It is also looking into aid given to BayernLB.

”These particular cases . . . illustrate the need for a profound restructuring in the sector . . . Potentially this will contribute to a consolidation among the Landesbanken,” Ms Kroes said at the time.

In her latest interview with the Süddeutsche Zeitung paper, Ms Kroes described the German banking system as ”completely different” to that in France, Italy or the UK.

She acknowledged that her views and decisions had frequently been questioned by Peer Steinbrück, Germany’s finance minister, but said: ”We work toughly, but openly together. And constructively. Germany are no weaklings. Neither are we. But you know, I don’t like having to deal with softies.”

*The European parliament has taken the concept of absentee ballots to new heights after a Belgian astronaut yesterday announced his vote for the body’s elections from space.

”I have arranged to vote by proxy, so I won’t miss out on the next European elections while I’m up here. I hope you will also vote, wherever you are and whatever political views you have,” said Frank De Winne in a message beamed from the International Space Station. ”Europe looks united from up here,” said Mr De Winne, whose mission was believed to have been for purposes of scientific research as opposed to European enlargement.

Thestunt was another example of Brussels’ determination to generate enthusiasm among voters for an election that has suffered from dwindling turnout.

Parliament has teamed up with MTV and turned to social networking sites such as MySpace, Facebook and Twitter in order to get its message out.

The elections begin in earnest on Thursday and run through until Sunday.

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Hedge funds may quit UK over draft EU laws

By James Mackintosh and George Parker in London and Nikki Tait in Brussels

Published: June 3 2009 23:34 | Last updated: June 3 2009 23:34

Some of Britain’s biggest hedge funds have warned the UK Treasury they will be forced to leave the country unless a draft European directive is radically changed.

Some have already begun back-up preparations to move to Switzerland in case the rules – described by one manager as a “French plot against London” – are not rewritten. New York is also a possible destination, according to another.

The warnings come as hedge funds step up their campaign against the draft directive on alternative investment fund managers, which was modified at the last minute to require the European Commission to set a limit on borrowing. Private equity firms are also fighting the rules.

Ian Wace, co-founder of hedge fund manager Marshall Wace, told the Treasury this week it should modify tax rules to allow the thousands of Cayman Islands-based funds to move to be fully regulated in London, rather than have much of the industry abandon Europe.

“If this directive goes through as drafted, large chunks of the industry will be leaving Europe, whereas we have the opportunity today to have large chunks of this industry coming to Europe,” he said.

At a meeting organised by Dan Waters and Henry Knapman of the Financial Services Authority and Tom Springbett, a Treasury representative, officials reassured almost a dozen of London’s top managers they would fight for changes.

Managers present included Mr Wace, Jon Aisbitt, chairman of Man Group, Hugh Sloane, co-founder of Sloane Robinson, David Stewart, chief executive of Odey Asset Management, and executives from the London arms of America’s Tudor Investment Corp, Citadel and Och-Ziff.

People present said the FSA officials accepted that the “killer” rules limiting borrowing – and defined to include the implicit borrowing built in to derivatives – would make popular strategies such as global macro, made famous by George Soros, impossible. But the FSA and Treasury argued the definition of borrowing was so “obviously ridiculous” it was bound to be rewritten, one official said.

Lord Myners, City minister, accused the European Commission of producing “naive” proposals.

Speaking to MPs, he said the draft directive “did not conform with the best practice of consultation” and he was confident it could be improved.

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US guest list includes Egypt regime’s critics

By Heba Saleh in Cairo

Published: June 3 2009 22:06 | Last updated: June 3 2009 22:06

The US has invited leading critics of the Egyptian regime, including members of parliament from the Muslim Brotherhood, the Islamist group, to attend President Barack Obama’s much-awaited speech to the Muslim world in Cairo on Thursday.

The audience at Cairo University will include bloggers critical of the Egyptian government, Ayman Nour, the former presidential candidate whose imprisonment had strained relations between Cairo and the previous US administration, as well as independent deputies who belong to the banned Brotherhood, the country’s largest opposition group.

The guest list marks an apparent US attempt to balance closer relations with Arab leaders with an outreach to civil society and opposition groups. Mr Obama has carefully refrained from criticising the Egyptian authorities even when pressed on their human rights record. And he arrives in Cairo after lavishing praise on King Abdullah of Saudi Arabia during a visit to Riyadh.

“I imagine that the US embassy had something to do with the invitations,” said Saad Al Katatny, the head of the Brotherhood’s parliamentary bloc. “We have a fifth of the seats in parliament, and we are present in society. It is natural that we should be invited, it is ignoring us that is not natural.”

Brotherhood members of parliament are usually not asked to official events in Egypt and they are almost never interviewed on state media. The group is the main target of a government crackdown intended to keep it on the defensive through a revolving-door policy of arrests and releases of its members.

“We welcome Mr Obama and his speech,” said Mr Katatny. “But it is a welcome mixed with caution.”

On his arrival in Saudi Arabia on Wednesday Mr Obama said he wanted to visit the place where Islam began and discuss “many of the issues that we confront here in the Middle East”. He said he had been “struck” by the Saudi monarch’s “wisdom” and “graciousness”.

His trip to the region is an attempt to win the hearts and minds of Muslims after eight years of tensions provoked by the September 11 attacks and the resulting “war on terror”, which was perceived by Muslims as an attack on Islam. Mr Obama has clearly disconcerted the leaders of al-Qaeda, whose organisation thrived on the deepening anti-Americanism in the Muslim world.

In an audio message broadcast on Qatar’s al-Jazeera television, Osama bin Laden, the al-Qaeda leader, on Wednesday said the US president had “sown the seeds of hatred and revenge against the US”.

“Certainly there is a pitched battle for hearts and minds,” said Gamal Abdel Gawad, an Egyptian political analyst. “It is certain that the image of the US in the Muslim world has started to improve. Even if scepticism rules, more people are willing to give the US a second chance. This is what worries extremists.”

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Obama seeks new chapter in Muslim ties

By Heba Saleh in Cairo and Abeer Allam in Riyadh

Published: June 3 2009 17:49 | Last updated: June 3 2009 17:49

Fresh asphalt gleams on the palm-lined avenue leading to Cairo University, where Barack Obama, the US president, is to deliver his eagerly anticipated address to the Muslim world on Thursday.

Workers have been busy scrubbing pavements and anything else likely to be seen by Mr Obama as he arrives to make a speech intended to scrape away from US-Muslim relations the thick grime of mistrust accumulated over the eight years in which George W. Bush was president.

“Events like this do not happen frequently in international relations,” said Abdel Moneim Said, head of the Cairo-based Al Ahram Centre for Political and Strategic Studies. “This is as big as Nixon’s visit to China. After eight years of talk about the clash of civilisations, this guy comes to an Islamic country to make a point about our shared humanity.”

Mr Obama has made it clear that he wants to begin a new chapter in US-Muslim relations based on “respect” and shared interests. In the Arab world he will be speaking to a largely receptive audience, even if it is one which wants to see how his words will be translated into actions.

“So far Obama has sent several positive signs,” said Jamal Khashoggi, editor of Al Watan newspaper in Saudi Arabia. “He has started to change the course of US-Muslim relations. I believe he will try to rearrange the relations with the Muslim world and fight terrorism in a more rational way.”

But public opinion will also expect more than expressions of goodwill and paying homage to the greatness of Islamic civilisation.

The address will be closely watched for signs of a willingness to put pressure on Israel and to implement a serious plan for Middle East peace. Reformers and opposition groups will also want to see to what extent democracy and human rights for the region will be part of his agenda.

“What is he going to do about Washington’s total support for repressive regimes in the Islamic world?” asked Mohamed Habib, a senior leader of the banned but tolerated Muslim Brotherhood group in Egypt. “We have no problems with the man, but there are US institutions, vested interests and a Zionist lobby which all exert pressure to make him go back on his positions.”

A survey of six Arab countries by polling agency Zogby International found 45 per cent of Arabs had a positive view of the US president, but only 3 per cent described themselves as having “a lot of confidence” in the US.

“I started liking the US more since Obama became president,” said Mohamed Osama, a political science student at Cairo University. “It is clear he does not hate Arabs. Bush was very biased towards Israel. Now the tone is different. I think Obama can make some changes. He will pressure Israel, but I don’t think it will submit to his pressure.”

All the same, Mr Obama’s call for a freeze on Israeli settlements in the West Bank and his insistence on a two-state solution to the Palestinian-Israeli conflict have raised expectations.

In an open letter to the US president this week, retired Arab diplomats said his “historic election and new administration provide a beacon of hope that ending this protracted conflict is now possible”.

Egyptian officials see the visit – which they hope will give a fillip to the country’s efforts to maintain its regional supremacy – as a turning point in relations with a strategic ally with whom political ties in recent years had soured.

The last time a US president delivered a speech in Egypt was last year, when Mr Bush publicly berated Arab leaders for their undemocratic ways in a homily boycotted by his host, Hosni Mubarak, the Egyptian president.

“The previous administration did not handle relations the right way,” said Hossam Zaki, spokesman at the Egyptian foreign ministry. “It dealt with these issues in an insulting and public manner. We expect that this administration, if it has similar points to raise, will do so in an entirely different manner. Respect here is a must ... and going public on such issues will not yield any results, quite the contrary.”

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Latvia auction flop sparks fears of struggle to find debt buyers

By David Oakley in London

Published: June 3 2009 19:13 | Last updated: June 4 2009 08:05

A failed Latvian government debt auction on Wednesday sent tremors across financial markets as investors feared that emerging nations round the world would struggle to find buyers for a huge wave of sovereign debt issuance.

The auction failure revived concerns about the economies of central and eastern Europe and triggered a sell-off in the shares of Swedish banks, which have invested heavily in the Baltic nation. The currencies of several east European countries fell sharply against the dollar.

The failure to raise any money in the auction of short-term treasury bills was due to fears that Latvia would have to devalue its currency, the lat, because of its economic woes. The government had hoped to raise 50m lats ($100.7m).

Governments around the world are forecast to issue $11,690bn in debt in the international markets this year compared with $10,570bn last year, according to the Organisation for Economic Co-operation and Development. Although emerging market bond issuance has picked up following a revival in financial markets, investors remain reluctant to lend to weaker economies.

The Hungarian forint saw the biggest fall, tumbling 1.97 per cent against the euro and 2.85 per cent against the dollar. The Polish zloty fell 0.75 per cent against the euro and 1.56 per cent against the dollar, while the Czech koruna fell 0.25 per cent against the euro and 1 per cent against the dollar.

Shares in Swedbank and SEB, the Swedish banks, fell 15.9 per cent and 11 per cent respectively. The Baltic states’ currencies are all pegged to the euro and Swedish banks would be hit by companies and consumers struggling to pay back foreign currency loans after a devaluation.

A Swedish adviser to Valdis Dombrovskis, Latvia’s prime minister, said on Tuesday that a devaluation of the lat was just a matter of time.

Nigel Rendell, senior emerging markets strategist at RBC Capital Markets, said: “The country is in a mess with the economy expected to contract very sharply this year, while the budget deficit is horribly high. Devaluation looks very likely as a way of boosting exports and growth.”

Latvia’s economy is forecast by the government to contract by 18 per cent this year, while its budget deficit is estimated at 9 per cent of gross domestic product.

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Business of survival: The MBA universe is expanding despite the global recession

Schools are striving to find new selling points to attract students

By Michael Prest

Thursday, 4 June 2009

MBA students are increasingly spoilt for choice. You want to study in your home region? Islamic finance? A medical MBA? Need help paying the fees? Schools from northern Europe to the Far East by way of the Mediterranean will oblige. Despite the recession, or perhaps partly because of it, the explosion in the number and variety of business schools shows no signs of slowing down. The big bang causing this expansion of the MBA universe is worldwide demand from students and business. And as in many consumer-led industries, business schools are locked in a Darwinian struggle to differentiate themselves.

"I think there is overcapacity in this market. New entrants may underestimate how easy it is to get into this market, for example in hiring a good-quality faculty," says Narendra Laljani, director of executive education at Ashridge Business School in Berkhamsted, Hertfordshire. Faced with an increasingly complex market, there are two connected areas in which business schools, even the better-known names, are particularly trying to make their mark: how you entice the students in; and what you teach them when they're signed up. Both mean more work for the schools and more choice for the students.

The related questions of student recruitment and paying the fees are critical to filling the classrooms. Although they vary greatly – the ratio of the highest to the lowest MBA fee in the UK is about 7:1 – fees in general rose faster than inflation for several years. But more recently, competition between schools has kept the lid on what they can charge, and that seems likely to continue. One consequence has been to freeze the fees hierarchy and force schools to make a virtue out of necessity. "We do not compete on fees," says Javier Muñoz, director of admissions for IESE, one of Spain's leading schools and, at €67,900 for its full-time MBA, one of the more expensive.

Top schools argue that they offer a superior education and better value for money: IESE has a student-to-faculty ratio of 4:1, despite boasting an MBA cohort of 220. But even so large a school cannot ignore the plethora of offers from less prestigious institutions which students may find tempting – especially in recessionary times. IESE's answer for some time has been an arrangement with a Spanish bank to provide students with highly attractive loans: 100 per cent of the fee at 2 percentage points over the euro interbank rate (the rate at which banks lend to each other in euros), which effectively has to be repaid over eight years. In fact, the average repayment period is four years.

IESE has also introduced a young talent programme to draw in more students and sponsors. Companies that agree to sponsor students recruit suitable candidates straight from university and employ them for a few years before paying to put them through the MBA. The student then has to return to the sponsoring company. "The programme is open to any student, with any degree from anywhere," says Muñoz.

ENPC School of International Management, based in Paris, operates a scheme along broadly comparable lines. When students apply for the full-time MBA being launched in October with the Hassania School of Public Works in Casablanca, Morocco, their dossiers will be shared with a group of sponsor companies. If a company likes an applicant, it can pay part of the tuition fees in return for him doing his MBA project in that company. "We go to the companies and say this is a win-win," says Professor Tawfik Jelassi, dean of ENPC.

Ashridge, with its traditional strength in management education, makes a similar case to sponsors. Companies are more reluctant to finance employees to take executive MBAs (EMBAs), but Laljani argues that the assignments and the consultancy project that students do for their sponsors as part of the degree makes it good value for the sponsors' money, not least because faculty are involved. "Anecdotally, we know it's worth a lot to a sponsor company. It's a lot of consulting time," says Laljani.

ENPC's new joint degree points to another way in which schools are differentiating themselves to attract students: going to where the students are and offering a qualification with a strong regional appeal. The course, some of which will be taught in Paris, is aimed at students from the Mediterranean and Africa. It will focus on the private sector as well as the public sector managers who traditionally have gone to such institutions in Arab countries. "We think Africa is the next continent to get the attention of the business community. Teaching some of the course in Paris is important for business education with a European-Mediterranean emphasis," says Jelassi.

Another French business school, ESC Lille, is also taking the product to the customers. In October, it will introduce an 18-month part-time MBA offered jointly with Institute Dar Basile in Aleppo, Syria. ESC Lille has been involved in the Middle East for 20 years. The school's Catholic connections led it to Dar Basile, a management school under the aegis of the Melkite Greek Orthodox Archbishop of Aleppo whose blessing was required for the link-up. The Melkites are an ancient denomination who are Catholics but follow Byzantine theology and rites.

Students on the course can be based either in Aleppo or on ESC Lille's Paris campus. Each will spend time in the other place, and all students will have a study trip to China. Christophe Bredillet, director of postgraduate programmes at ESC Lille, believes Syria is modernising and that there is demand for management training. "People there are keen to learn. We target young professionals usually, and companies understand how they can benefit from management education," he says. Most of the faculty will be from ESC Lille, although Bredillet expects more Syrian teachers will participate in the future.

Islamic finance is a common element in such courses, which also devote more time to local laws and business practices than would a mainstream MBA in a better-known school. But Javier Muñoz is relatively sanguine about regional competition. "In the short term at least, I don't think it will be serious competition to the established schools in Europe and the US," he says. In his view, new degrees and schools may be a good choice for local students, but they are unlikely to attract European students and still less Asian students, who are increasingly important in the MBA market.

However, that has not stopped European schools from innovating. ESSEC, a long-established Paris school, has joined forces with the faculty of medicine at the Université Paris Descartes to launch a double MBA and medical degree. Pharmaceutical companies such as Servier, Sanofi-Aventis and Roche have agreed to sponsor four to six students, and more than that number have already applied. "We were looking for high-potential students who eventually might hold positions such as heads of hospital departments or hospital directors," says Gérard de Pouvourville, Chair of health economics and management at ESSEC.

In any case, well-established European schools often already offer courses which distinguish them. Nottingham University Business School has carved out a niche in entrepreneurship, although other schools tout their entrepreneurial credentials as well.

Martin Binks, professor of entrepreneurial development, stresses that teaching entrepreneurship is about much more than students starting their own businesses – although that is becoming more popular. "It's about opportunity recognition and creative problem-solving," he says. "We're getting the impression from large businesses that their response to innovation needs to be more creative and less responsive. There's a real thirst for the sort of capabilities we're talking about."

Ethics is another component of business school courses which the recession has put more on the map. Cass Business School, in London, has set up a business ethics task force to examine how this thorny subject can be applied across all its courses. "Perhaps people are going back to basics," says Professor Steve Haberman, director and deputy dean of the school. The mounting interest in ethics coincides with an upsurge in applications, particularly for the EMBA, which has surprised him and many other deans and left them wondering if it is a flash in the pan.

The rise in the number and quality of applicants for full-time and part-time MBAs is posing a dilemma. Should schools increase class sizes as far as facilities allow or stick to their normal cohorts? The answer partly depends on each school's capacity and teaching philosophy. Cass, for example, has a largish cohort of 80 for its full-time MBA. Students sit round a classic horseshoe-shaped lecture theatre which accommodates about 90. "A group of 30 in our judgement is too small to get the right mixture," says Haberman.

By contrast, Laljani at Ashridge, which has classes of about 30, says: "If you're in a room where the professor has to wear a microphone, you're in trouble from a student point of view. We have no lecture theatres." It is not exactly a buyer's market, but MBA students are in a strong position.

'It's demanding, but very rewarding'

Mia Carbon, 29, gave up her position as the acting head veterinarian at the Royal Veterinary College's Beaumont Animals' Hospital to enrol on an MBA at Henley Business College, a move which she hopes will open up new horizons.

"I had got to the point in my career where I either needed to specialise further as a veterinarian, or try something new. I have always been passionate about environmental and animal welfare issues and decided to do something that would broaden my options. An MBA was a perfect opportunity to do this. I had worked in quite a specialist role and it would provide me with the opportunity to develop much more generalised skills and knowledge.

I chose the Henley Business School because I was very impressed by the range and type of people that studied there. I was also attracted by the course content and wanted to do a general MBA rather that a specific one. I hope it will provide me with the skills to get my foot on to the ladder of a career in policy-making.

The course covers a wide range of areas from the point of view of a general or line manager rather than that of, for example, a marketing or HR specialist. There are things I had not thought of before, such as business strategy, and I have learned to think differently about more familiar areas involved in my work, such as process design.

There is a very valuable focus on personal and career development, and I've learned to appreciate the more generic skills I've developed that will be useful in other areas, such as coping well under pressure and both leading and being part of teams in highly stressful situations. Communication skills is another area I can use to market myself – an important part of being a vet is the ability to communicate effectively with people who are typically stressed and often emotional.

It's a demanding course, but very rewarding, particularly in terms of the interaction with other students and the emphasis on team working." LL

'I still have things to learn'

Julius Babayemi, 42, is building up his first dental practice in Rainham, Kent and wants to be nominated as an official dentist to the 2012 Olympics. Keen to improve his business and management skills, he enrolled on an MBA at Kent Business School.

"Apart from the close proximity to my home address, I chose the Kent Business School because of the atmosphere around the campus and within the school. The building was easy to navigate – very modern, and the culture within the school is family-friendly.

I think it was Charles Darwin who said if you don't grow and change you become obsolete. My first degree was in zoology at University College, London. I then spent six years qualifying as a dentist. After nine years of dentistry, I opened the OmniPark Dental Centre in March last year. We've got more than 3,000 patients. I soon realised there is an important business aspect to dentistry when you are running a practice and employing people. There are still things I have to learn, such as managerial and accounting skills.

We were thinking of ways to expand the practice and be more effective. I've already learned things I have been able to use. It wasn't until I started the MBA that I realised we could be even more effective in our marketing strategy. Now we spend our resources on local radio and newspapers. You don't always have to pay for adverts if what you are doing is interesting. We invited children in as part of the National Smile Month and it was a tremendous success. The phone hardly stopped ringing afterwards.

People ask me if I will ever stop studying and I don't think I will."

Liz Lightfoot

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Protests over Peru land rights escalate

By Naomi Mapstone in Lima

Published: June 4 2009 03:00 | Last updated: June 4 2009 03:00

Peru’s investment-friendly government is under intense pressure from Amazonian indigenous communities, whose protests over new land rights laws have curtailed oil and gas production, blocked roads and ports and interrupted train services to the Macchu Picchu Incan ruins.

The demonstrations by the Awajun, Huambis and Asháninka communities have prompted warnings of fuel rationing within a fortnight, even before the capture at the weekend of two valves on the sole pipeline between Peru’s Camisea gas field to the coast.

The government has declared a state of emergency, and on Tuesday it used military and police forces to recapture the Camisea valves.

Yehude Simon, Peru’s prime minister, is leading negotiations with the communities, including Alberto Pizango, president of an umbrella national indigenous rights group, Aidesep, who at one point called for “insurgency” to ensure indigenous rights to land.

Mr Pizango quickly clarified the remark, saying he intended only a defence of “natural rights and peacefully resisting excesses committed by the Peruvian state”. But in Peru, which despite China-like economic growth rates in the years preceding the global financial crisis has an official poverty rate of 36.2 per cent, Mr Pizango’s comments underscore the depth of anger among poor indigenous communities about the wealth generated by extractive industries.

Peru is the world’s leading producer of silver and among its top five producers of gold, zinc and copper, and Alan Garcia, the country’s centre-left president, wants it to become a net oil exporter. In May, the government signed 13 oil and gas concessions with foreign companies, including Reliance of India. At least a dozen more concessions are to be auctioned next month. Perenco, of France, recently announced it would invest $1bn in oil drilling in one of the contested areas, where it denies the existence of any indigenous communities. Mr Garcia has criticised the protesters, arguing that “Peru’s riches belong to all Peruvians”.

Meanwhile, PetroPeru, the state energy company, says the protests have forced it to shut its crude oil pipeline, at a cost of $119,000 a day. Miguel Celi, PetroPeru’s general manager, told state media that Pluspetrol of Argentina, which produces about a fifth of Peru’s total crude, around 30,000 barrels a day, has now also suffered a knock-on effect as it relies on the pipeline.

The demonstrators are demanding that presidential decrees passed in conjunction with changes to implement a trade agreement with the US be repealed. Mr Pizango says the decrees serve only to increase the rights of oil, mining, logging and agricultural companies at the expense of indigenous communities.

Mr Simon has promised a softening of the decrees and an end to the protests within the week, but there is little sign of progress.

‘All over the Andes there are lots of indigenous communities who have no rights over their lands,” said Gregor MacLennan, of Amazonwatch. “The very fact that they have lived there and always lived there means they have rights, but they don’t have an official title document given to them by the government and lodged in a registrar.”

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Three more Russian citizens released in Egypt

04.06.2009, 06.55

CAIRO, June 4 (Itar-Tass) -- Egypt's security forces have released three more Russian students. Russian Vice-Consule in Egypt Yusup Abakarov told Itar-Tass on Thursday that 14 students who were still remaining in custody would be deported back to Russia.

As a result, 23 out of 37 students who were arrested on the May 27 have been released. They will continue their studies at the Al-Azhar Islamic University.

Those who are going to be deported on charges of violation of the passport and visa regime will have to pay for their trip back home,if they cannot, their relatives should pay for their air tickets.

On the night to May 27 the Egyptian police carried out masse arrests among foreign students of the Al-Azhar University. The include the natives of Dagestan, the Republic of Kalmykia, North Ossetia, Tatarstan and Chechnya.

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Russia’s attitude to Israel much better than in Europe - Lieberman

03.06.2009, 14.49

MOSCOW, June 3 (Itar-Tass) - Russia’s authorities and society have much better attitude to Israel and the Jewish people than those in many European countries, Israeli Foreign Minister Avigdor Lieberman told a news conference at Itar-Tass on Wednesday.

Referring to the results of recent public opinion surveys, he underlined that “the degree of tolerance to Israel and Jews” is much higher in Russia than in many European countries.

“Of course, there are marginal groups in Russia. There is enough xenophobia, but in general Russian authorities and society’s attitude is more than positive,” he said.

Lieberman noted that at present, some countries, in particular in Europe, take attempts to revise the world history, including that concerning WWII and the Holocaust.”

This is especially painful for Russia that made a major contribution to the victory over fascism as well as for Jews who severely suffered from Nazism, he said.

“We have no right to commit the history to oblivion. I believe that Russia will be our reliable partner in preserving the historical truth,” the diplomat said.

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Russia loses billion dollars in defense fight with France
03.06.2009 Source: Pravda.Ru URL: http://english.pravda.ru/russia/economics/107675-russia_india-0

Russia is losing its positions on the Indian arms market. Russia has lost a billion-dollar tender for the delivery of fuel aircraft to this country in spite of the fact that India is one of the key buyers of Russian arms. It was not the first time when Russia failed to sign contracts with India. Experts say that Russia may entirely lose the Indian market if it continues to offer outdated defense technology to one of the most dynamically developing Asian nations.

Russia’s United Aircraft-Building Corporation lost the tender to sell six Il-78 fuel tankers to India. The deal was evaluated at $1 billion. India preferred France’s Airbus A330 MRTT, made by Europe’s EADS.

Foreign experts were certain that Russia would win the tender because of the country’s close ties with India. However, Delhi preferred France.

The Chief of India’s Air Force, Fali Homi, said in an interview with the Hindustan Times that Russia’s offer did not meet India’s requirements. Russia only has to hope that Mr. Homi will retire soon and that his successor will be more Russia-oriented.

Russia has been shipping fuel aircraft to India since 2003. The recent business failure took place because of Russia’s fault only, officials of the Indian Air Force said.

Vladislav Shurygin, a Russian military expert, believes that one should not make a tragedy of the story.

“Of course, Airbus’s fuel tankers have a number of advantages as opposed to Russian-made aircraft. First and foremost, Russia is unable to offer a good technical support package. A lot of things depend on the corruption aspect. India’s decisions depend on its lobbies. To crown it all, India tries to purchase arms from different exporters not to be dependent on arms shipments from one country only,” the expert said.

The fact that India chose Russia’s French competitor is not surprising at all. India does not owe Russian anything. India is a very strong country nowadays, not like it was several decades ago. This country does not have a habit of choosing only Russian weapons. Furthermore, Russia still offers Soviet arms to India and may often disrupt delivery terms.

Airbus A330 MRTT is an up-to-date aircraft, the tests of which began in 2003. Russia’s Il-78 is the product of the 1970s. India’s recent decision is the result of the politics, which the country has been running in its defense industry during the recent 20 years.

Sergey Balmasov
Pravda.Ru

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Medvedev ready to back sanctions against N.Korea

11:5304/06/2009

MOSCOW, June 4 (RIA Novosti) - Russian President Dmitry Medvedev has said he is ready to support economic sanctions to deter North Korea's nuclear program, and will discuss Pyongyang's nuclear test with his U.S. counterpart.

The UN Security Council denounced Pyongyang's May 25 nuclear test as a violation of Resolution 1718 and the international non-proliferation regime, and is currently drafting a resolution that could impose sanctions against the North, already under a number of UN sanctions over its first nuclear test, carried out in 2006.

"We need to think about measures to curb those programs that are being conducted," Medvdev said in an interview with the U.S. television network CNBC broadcast on Wednesday night.

"I am ready to discuss the issue during the meeting with the U.S. President [Barack Obama] to be held in Moscow in July, and we will also communicate with him through other formats," the Russian leader said.

Medvedev reiterated Russia's stance on Pyongyang's nuclear test and missile launches last week, calling them "measures that disrupt international security."

"This is our shared concern. And we must make a decision on this," he said.

Earlier this week, Russia's envoy to the United Nations, Vitaly Churkin, urged the international community to give a "strong" response to North Korea's nuclear test.

However, he said the resolution "will not aim to impose any kind of economic embargo on North Korea."

Medvedev said any expansion of the nuclear club must be prevented, and expressed hope that the North Korean authorities would return to the negotiating table, as "there is no other solution to the problem."

The six-nation talks involving North and South Korea, Russia, Japan, China and the United States, ended in deadlock last December over a U.S. demand that nuclear inspectors be allowed to take samples out of the country from North Korean facilities for further analysis.

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Nord Stream participants ready to readjust route - Putin

Никольский Алексей

21:4303/06/2009

HELSINKI, June 3 (RIA Novosti) - Participants in the project to lay the Nord Stream natural gas pipeline under the Baltic Sea are ready to alter the route in line with Finland's environmental concerns, the Russian prime minister said on Wednesday.

Vladimir Putin arrived in Finland on Wednesday for talks with his Finnish counterpart, Matti Vanhanen, seeking Finland's approval for the Nord Stream pipeline to bring Russian natural gas to Europe.

"Participants in the project are ready to lay any route that will be more acceptable to Finland," Putin told reporters after the talks.

The construction of the 6 billion-euro pipeline, due to eventually pump 55 billion cu m of gas per year to Western Europe bypassing traditional transit nations, has been repeatedly delayed over Baltic nations' environmental and security concerns.

President Tarja Halonen said in April that Finland's concerns on the project were purely environmental, and that she hoped they would be tackled by June.

Putin stressed the importance of the pipeline for Europe, saying: "The issue is whether our European partners... wish to get our cheap gas or have it condensed through a mediator."

Vanhanen described the Nord Stream project as "strategic" and said Finland appreciates that Central Europe needs gas.

"I am sure that taking into account all environmental rules and requirements, such a gas pipeline can be built," the Finnish premier said.

Vanhanen also said Finland would complete an environmental impact review of the project by the end of June, and that the country's State Council would consider using the country's economic zone to lay the pipeline in September-October.

Nord Stream is currently run by Gazprom, with a 51% stake, Germany's Wintershall Holding and E.ON Ruhrgas, holding 20% each, and Dutch Gasunie with 9%.

Russia provides 100% of Finland's gas requirements, and some 70% of its crude oil supplies.

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Putin warns of gas shutdown to Europe if Ukraine fails to pay

21:2403/06/2009

MOSCOW, June 3 (RIA Novosti) - Russia's prime minister warned on Wednesday that natural gas pumped via Ukraine to Europe could be cut off by early July if Ukraine fails to pay for its gas, and urged the EU to intervene.

"During discussions with our European partners, I have called attention to this problem, and asked them not to leave us [Ukraine and Russia] to handle these issues one-on-one. We are warning in advance that if such a conflict arises, it could lead to a full shutdown in our transit in late June or early July," Vladimir Putin said after talks with his Finnish counterpart Matti Vanhanen in Helsinki.

Russia, which supplies around one fifth of Europe's gas, briefly shut down supplies via Ukraine's pipeline system at the start of the year over Kiev's unpaid debt.

The premier said that if there are further payment delays on the part of Ukraine, Russia's Gazprom has the contractual right to demand pre-payment for future gas, suspending supplies until the money is paid. Without buying gas to fill Ukraine's storage system, the resulting shortfall will have a knock-on effect on Europe, he warned.

"I want to stress that without pumping gas into its underground storage facilities, Ukraine won't be able to survive, and will be forced to tap gas from the export pipelines. It will be forced to do this, you can't even blame them for it," he said.

Despite the warnings from both the Russian side and Ukrainian President Viktor Yushchenko that further gas disputes and cutoffs are highly likely to arise, leading to problems for the European Union, the 27-nation bloc has so far been reluctant to consider financially backing Ukraine's gas imports.

Last Friday, European Commission President Jose Manuel Barroso said it would be difficult for the EU to help Ukraine keep up with its payments.

The Russian premier said: "All our requests to the European Commission have so far been unsuccessful, there has only been one answer - we have no money for Ukraine."

Putin stressed that Russia has not escaped from the global economic slowdown, and is not in a position to subsidize Ukraine.

"We, in Russia at least, are not glad and are not gloating over Ukraine's difficulties in paying for the product they buy from us... But we can't pay for this."

Russia's president has also called for dialogue involving the EU on the Russia-Ukraine gas issue.

Dmitry Medvedev told Deputy Prime Minister Igor Sechin on Wednesday: "We need to continue contacts with our European partners, Brussels, the EU presidency, and our Ukrainian colleagues."

Sechin told the president that the government has submitted proposals to the EU and to Ukraine on coordinating efforts aimed at solving payment problems.

"We have appealed to Barroso, the president of the European Commission, as well as the president of the Czech Republic, the prime minister of Sweden and Ukrainian Prime Minister Yulia Tymoshenko on coordinating these efforts," he said.

Sechin also confirmed that Russia will not be able to grant Ukraine's request for a $4.2 bln loan to enable the country to buy 19.5 billion cubic meters of gas for its underground storage facilities.

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企業収益、アジア依存最高　09年３月期、営業利益の36％占める

　日本企業の収益のアジア依存が高まっている。上場企業が2009年３月期に稼いだ営業利益のうち、アジア地域の比率は36％と過去最高で、下期（08年 10月～09年３月）に限れば日米欧がそろって赤字となる一方、アジアだけが黒字を確保した。世界同時不況の中でもアジアの需要は底堅かった。日本の国際企業にとり、アジアでの収益力が中長期的にも成長を左右するようになっている。経営資源を重点配分する動きもあり、10年３月期もアジアが収益を下支えしそうだ。

　日本経済新聞社が、３月期決算の上場企業（金融、新興３市場を除く）のうち、連結の所在地別売上高・営業利益を開示し、00年３月期から比較が可能な 432社を対象に集計した。営業利益は本業で稼いだもうけを示し、事業や地域別の収益力の比較に使えることから注目度が高い。(07:00)