Tuesday, October 21, 2014

IPR and Innovation 19: The Policy Workshop Seminar in Hong Kong

Two weeks from  now, I will participate in a small group meeting-seminar on intellectual property rights (IPR) of independent Asian think tanks to be held in Hong Kong. The event is sponsored by The Policy Workshop, a public affairs firm that helps clients meet public policy challenges and communications, headed by a friend, Cathy Windells. 

The event will be held one day before the Economic Freedom Network (EFN) Asia 2014 conference, Among the cool reading materials are these. 

The Global IP Center (GIPC) of the US Chamber of Commerce published a few months ago The International Intellectual Property Index, 2014 Report. Only 25 countries were covered though, the Philippines not one of them. Perhaps in the coming years. 

Here is the overall result, global ranking of the countries included.

The GIPC Index consists of 30 indicators divided into six major categories. Each indicator is scored between 0 and 1. The maximum available score for the entire index is 30.

Category 1: Patents, Related Rights, and Limitations

1. Patent term of protection
2. Patentability requirements
3. Patentability of computer-implemented inventions
4. Pharmaceutical-related patent enforcement and resolution mechanism
5. Legislative criteria and use of compulsory licensing of patented products and technologies
6. Patent term restoration for pharmaceutical products
7. Regulatory data protection term

Category 2: Copyrights, Related Rights, and Limitations

8. Copyrights (and related rights) term of protection
9. Legal measures that provide necessary exclusive rights that prevent infringement of copyrights and related rights (including Web hosting, streaming, and linking)
10. Availability of frameworks that promote cooperative action against online piracy
11. Scope of limitations and exceptions to copyrights and related rights
12. Digital rights management legislation
13. Clear implementation of policies and guidelines requiring proprietary software used on government
information and communication technology (ICT) systems to be licensed software

Category 3: Trademarks, Related Rights, and Limitations

14. Trademarks term of protection (renewal periods)
15. Non-discrimination/non-restrictions on the use of brands in packaging of different products
16. Ability of trademark owners to protect their trademarks: requisites for protection
17. Legal measures available that provide necessary exclusive rights to redress unauthorized uses of trademarks
18. Availability of frameworks that promote action against online sale of counterfeit goods

Category 4: Trade Secrets and Market Access

19. Protection of trade secrets
20. Barriers to market access

Category 5: Enforcement

21. Physical counterfeiting rates
22. Software piracy rates
23. Civil and procedural remedies
24. Pre-established damages and/or mechanisms for determining the amount of damages generated by infringement
25. Criminal standards including minimum
26. Effective border measures

Category 6: Membership and Ratification of International Treaties

27. World Intellectual Property Organization (WIPO) Internet Treaties
28. Singapore Treaty on the Law of Trademarks
29. Patent Law Treaty
30. At least one free trade agreement with substantive and/or specific IP provisions such as chapters on IP and separate provisions on IP rights provided it was signed after World Trade Organization/ TRIPS membership.

The criteria seemed to be "tailored" so that the US would be in #1 rank, a comment from a friend.  Maybe but it was not the US government that made that report, it was the US Chamber of Commerce.

In Asia, only China, Indonesia, India, Japan, Malaysia, Singapore, Thailand and Vietnam were included, and four of them are in the bottom -- Indonesia, Vietnam, Thailand and India.

Here is another data from the World IP Office (WIPO), shared by WEF in their fb page. In terms of patent applications, a number of big Asian countries are on the top, they realize the value of IPR protection and its contribution to a more innovative, higher productivity economy. This data seems to contradict the GIPC Report although the latter covers all  aspects  of  IPR while the WIPO data covers only patents.

This from WEF blog is interesting, How to benefit from China’s innovation boom

China’s move from imitation to innovation has been a matter of national policy in recent years. In 2011, for example, the government established a set of ambitious targets for the production of patents. Almost immediately, China became the world’s top patent filer.

China soon surpassed the US in other important measures. Each year, Chinese universities award more PhDs in science and engineering than US institutions do – and more than twice as many undergraduate degrees in these fields.

Moreover, China is set to outpace the US in investment in research and development. Since 2001, China’s R&D expenditure has been growing by 18% annually and has more than doubled as a share of GDP. In the US, that ratio has remained relatively constant.

...statistics from the US National Science Foundation reveal a genuine drive to innovate across much of Asia, with East, South and Southeast Asian countries together spending more on R&D than the US. And technology-intensive activity in the region is fast approaching that of North America and Western Europe.

Indeed, despite territorial disputes and other divisive issues, the commissioners of the patent offices of Japan, South Korea, China and, to a lesser extent, Singapore and Taiwan meet often to define and coordinate their intellectual-property (IP) policies. China’s leaders know that they can learn from countries like Japan and South Korea, which implemented policies to encourage innovation and protect IP rights long before China did.

This is good news. The territorial dispute and packing up of armaments seem to be exaggerated by some sectors and the mainstream media.Underneath are many avenues for peace and commerce -- more global and regional trade, in both goods and services, like IPR and innovative products and processes.

More innovation will spur more global commerce and trade. And that should mean less likelihood of any regional war.

See also:
On IPR abolition 16: Debate with Teddy Boy Locsin, August 24, 2012 
On IPR Abolition 17: Copyright by a Government Corporation, September 07, 2013

On IPR Abolition 18: Patent, Copyright and Jeffrey Tucker, May 15, 2013

Sunday, October 19, 2014

Freedom Run 2014

This morning, I attended the 4th Freedom Run sponsored by the Friedrich Naumann Foundation for Freedom (FNF) in partnership with other organizations, government offices and private enterprises. It was a big number of runners today, more than 3,200 people registered. The first five photos below from the FNF fb page and Jules' camera.

From left: FNF Country Director Jules Maaten, European Chamber of Commerce Past President and  convenor I think  of Integrity Initiative, Henry Schumacher, Napocor President Gladys Cruz-Sta Rita,  Cong. Erin Tanada, and LLDA Gen. Mgr. and former CALD President Neric Acosta.

It was fun in the early morning, with early band performers, warm up exercises, etc.

The marshall though told the 10K runners, me included, to go to the starting line early, and this is far from the stage. So we missed some  of the speakers.

Actor Dingdong Dantes was there, he arrived late I think. He joined the 3K runners. Last year, he also joined the Freedom Run, with gf Marianne Rivera.

This one-legged runner, the other leg on prosthetics, impressed me. I took his photo on our way back to the start/finish. Then I briefly ran with him, he said he met an accident, his left leg was amputated.

This is my 4th, straight participation in Freedom Run. The 1st Freedom Run in 2011 held in UP Diliman campus. It was only a 3K and 6K run, many joined it. This photo taken by Jules Maaten.

The 2nd Freedom Run in 2012 was held in Taytay, Rizal, going to a portion of Laguna Lake, and back. I ran the 10K.
The 3rd Freedom Run in 2013 was held at the Quezon Circle, going to Commonwealth Ave. and back. Here with friends from FNF, from left: Julianne S. of the regional office in Bangkok, Thailand, Pimrapat also from Bangkok, Sungeun Lim from FNF Korea, and Wimonpug also from FNF Thailand.

Today, I met a friend from Congress Mountaineers, Doming Gonzaga. He also ran the 10K.

Another fun day. Thanks FNF for organizing such a famous running for freedom annual event.

See also:
Freedom Run 2011, November 28, 2011 
Freedom Run 2011 and 2012, November 03, 2013

Freedom Run 2013, I will Run the 10K, November 09, 2014
Freedom Flame Awards 2013, November 13, 2013

Wednesday, October 15, 2014

Business 360 19: Investments and Inequality in Asia

* This is my article for this business magazine in Kathmandu, Nepal, October 2014 issue.

Accumulated savings become investments. And these in turn expand economic output and create new jobs, or expand the productivity of those  who already have jobs. Such is the beauty of continued investments and savings accumulation.

In many recent social literatures though, including those coming from the multilateral institutions and foreign aid bodies, there is growing disapproval if not outright  contempt, of rising inequality within and among nations as they grow  faster, as they attract more investments and expand economic production. Thus, the repeated call for “inclusive growth”, previously called as “growth with equity” or “broad-based growth”.

To improve social equality within countries, some governments have erected various  restrictions to foreign  direct investments (FDIs). The Philippines for instance has that restriction in the 1986 Constitution itself, where in some sectors, foreign investments is totally prohibited while in some sectors, it is allowed up to 40 percent.

Such restrictions make some foreign investors find other ways to come in and do business. Like having local dummies, so foreign money is able to penetrate even  in sectors that is explicitly reserved for the local investors. But many foreign investors do not like that arrangement as it lacks transparency, and they cannot report to their shareholders and regulators in both home and host countries that they have invested in companies that are supposed to be 100 percent locally-owned.

The next route for foreign investors is via the stock market. Not all of such market capitalization is foreign-owned of course, there are also many local investors in each country. Here are the figures for major Asian economies.

Source: WB, World Development Indicators 2014, http://wdi.worldbank.org/table/5.4

North East Asia except N. Korea is generally developed. The economies there are able to attract plenty of domestic and foreign investments that create plenty of higher productivity jobs.

South East Asia generally are emerging economies, except Singapore which is already a developed economy, and the three catching up economies of Laos, Cambodia and Myanmar.

South Asia though remains not so friendly to the stock market system, except India. Nepal in particular is the least friendly or least attractive to investors in the stock market.

In terms of FDIs in South Asia, the levels remain very low on average, except for Maldives.

Figure 2. Average FDI Inflows to South Asia, 2000-2011, Percent of GDP

There is a need to encourage more investments, local and foreign, in stock market and FDIs, to Asian economies. Investments not only refer to money. They also include tools and machineries, technology and processes, research and development, managerial skills and marketing initiatives.

Social and economic  inequality is inevitable as people have different goals and ambitions in life, different network and exposure in business, use different technology and managerial styles. 

What is important is that opportunities should be available for the people so they can manage their lives and career. The business climate in Asian economies should become more friendly, more accommodating to investors, local and foreign. People can decide to be hardworking or lazy, be ambitious or complacent, if different jobs have become more available in their countries and communities.

The important subjects of growth and investments, inequality and justice, will  be discussed for two days this  coming November  6-7, 2014, during  the  Economic Freedom Network (EFN) Asia Conference 2014 to be held in  Hong  Kong. The event will be jointly-sponsored by the Friedrich Naumann Foundation for Freedom (FNF) and the Lion Rock Institute (LRI). FNF is a German political foundation spreading the ideas of (classical) liberalism, free market, human rights and rule of law while LRI is Hong Kong’s first free market think  tank.

This writer will attend this important conference. It is hoped that more participants from Nepal and South Asian nations will be able to come and hear the healthy and productive exchange of ideas and experiences among other participants from North- and South-East Asia, as well as their friends and network from  the US, Canada and Germany.

RIP, Leonard Liggio

Rest in Peace, Prof. Leonard P. Liggio, Executive Vice President of Academics at Atlas Economic Research Foundation, Washington DC, USA. He passed away October 14, 2014, he was 81.

I met Leonard first time in April 2004 when Atlas granted me an international fellowship for one month to the US, along with Ellen Cain of the Foundation for Economic Freedom (FEF). First in Chicago for the Atlas Liberty Forum, then at the Atlas office in Fairfax, Virginia then. It was my first exposure to other free market-oriented groups, think tanks and individuals from many parts of the world.

Atlas put this brief memoriam for Leonard today in their website:
Leonard’s career advancing liberty spanned seven decades, during which time he served as the President of the Mont Pelerin Society, the Philadelphia Society, and the Institute for Humane Studies, where he later continued to serve as its Distinguished Senior Scholar. He was a professor at George Mason University, a visiting professor at the Universidad Francisco MarroquĂ­n, a board member of the Competitive Enterprise Institute, and a Trustee of Liberty Fund. 
Alex Chafuen and the late John Blundell once wrote that, if F.A. Hayek was the great architect of the revival of classical liberalism, then Leonard has been its “great builder, building a worldwide movement… one career at a time.”
Then I met Leonard again in 2005 in Phuket, Thailand, when Atlas and the Friedrich Naumann Foundation for Freedom (FNF) sponsored a round-table discussion on "The Constitution of Liberty in Asia" where we discussed for one whole day Friedrich Hayek's book, "The Constitution of Liberty". He moderated the discussion, assisted by Colleen Dyble, then Director for Institute Relations of Atlas. I learned a lot from that forum. A few months before we went to Phuket, Atlas mailed to us participants a copy of Hayek's book. I remember that I had a hard time understanding Hayek's deep political philosophy then, but it was good that I re-read some of the chapters to appreciate the great Austrian economist-philosopher's thoughts.

Our group photo below. Two names I cannot remember now, I put as (?). Standing from left: Leonard, (? from Malaysia), Hiroshi (Japan), Minh Nguyen (Vietnam), Charu Chadha (Nepal), Nambiar (Malaysia), (? from India), Kang Chandararot (Cambodia), Yongqin (China), Chung-ho Kim (S. Korea).

Sitting from left: me, Mr. You (Japan), Paata Sheshelidze (Georgia), Cuoung Nguyen (Vietnam), Khalil Ahmad (Pakistan), Colleen Dyble (USA), Trupti Meetah (India), and Ellen Cain (Philippines). Liu Junning (China) was also there but he went outside when this photo was taken.

Yesterday, good friend and former VP for Institute Relations of Atlas, Jo Kwong, posted in fb:

Grateful to have the chance to visit Leonard Liggio today, my long time friend and mentor, to tell him how much he's meant to me all these years. Remembering our younger days.

Today, she posted, Rest in peace, Leonard. Could there be a more gentle, knowledgeable, insightful, thoughtful person? A gentle giant, a gentle teacher. How blessed we are to have known him.

I have met again Leonard in 2008 (Atlanta) and 2009 (LA, California) during the annual Atlas Liberty Forum. Jo Kwong looked for extra funding to allow me to travel to the US and attend those events, and met with other free market leaders from other parts of the world. Thanks once again, Jo. I will never your efforts then.

The Institute for Economic Studies-Europe (IES) produced this youtube clip in 2009, also in recognition  of Leonard's role in contributing to the liberty movement in Europe. They posted in fb with this note,

The movement of Liberty has just lost a giant. R.I.P Leonard Liggio. Here is a little tribute (showing just small part of his huge impact) made in 2009 for the 20 anniversary of IES-Europe which wouldn't exist without his help. (Appearing in the video: Jacque Garello, Jo Kwong, Tom G. Palmer, Douglas B. Rasmussen, Pascal Salin, Fred Smith, Tibor Machan, Randy Barnett, Henri Lepage, Victoria Curzon-Price, Douglas Den Uyl, Emmanuel Martin, Mario Rizzo, Gregory Rehmke, Christine Dunn Henderson, Pierre Garello)

Ozlem Caglar-Yilmaz of the Association for Liberal Thinking (ALT) in Turkey posted this photo, with Alejandro "Alex" Chafuen, Atlas President, and  Leonard.

Leonard is known more by North and South American and European classical liberal academics and think tank leaders. He may have not traveled much to Asia, so the Atlas-FNF event in Phuket in 2005 was a great way for us Asians to know him more.

Once again, rest in peace Leonard. It was great to meet you.

See also:
Jo Kwong rocks, February 09, 2010
EFN Asia 2: Hayek in Asia, September 20, 2010

Tuesday, October 14, 2014

Hong Kong Democracy Vs. China Dictatorship, Part 3

An Indian friend, Barun Mitra, posted this interesting article from Live Mint, October 8, 2014. 

"Wang Zang is a Chinese poet who was taken into custody in Beijing on 1 October because he posted a photograph of himself holding an umbrella on the Internet. The umbrella has emerged as the unlikely icon of demonstrations in Hong Kong...

… each year on 4 June, when thousands of Hong Kong residents unfailingly congregate at Victoria Park and hold a candle-light vigil, remembering Tiananmen. China doesn’t like it but doesn’t do anything about it. This is partly due to that Basic Law, which is meant to protect Hong Kong’s character for 50 years....

Perhaps the unanticipated outcome of these demonstrations is gradual transformation in the way China’s leadership wields power. China reviled and insulted Hong Kong’s last British governor, Chris Patten, who said that the only way to deal with China is by treating it like any other country. If it glares angrily, stare back. China respects strength in its rivals, not acquiescent kowtowing. Patten had limited time in China, but he succeeded in broadening the political space. By staying firm on their demands, the demonstrators in Hong Kong are doing the same.

The outcome isn’t assured. Hong Kong might become another Chinese city. Many think it already is. Or China might become a bit more like Hong Kong. We do live in interesting times."

Beautiful analysis. Another Indian friend commented,
Why should Asians accept the Western religion of democracy? One place that has reduced wretchedness is not democratic India, but dictatorial China. And HK and Singapore are among the freest places in the world despite not being democratic.

I understand some ramblings against democracy, that majority rule can ultimately lead to majority dictatorship, the 50% + 1 of the population can wield dictatorship over the 49%+. I support some of those sentiments actually. I find this thesis on democracy by Barun as brilliant. He wrote,
Democracy is not about majority rule, but about recognition of and respect for minority opinions. So that the minority view of today, may enjoy the freedom to peacefully persuade others, and could become a majority opinion of tomorrow....  For democracy to survive in large communities and countries, where only representative democracy is possible and practical, democracy has to be minimal, so that it does not offend or alienate too many people. Secondly, as societies become complex, there is a need to recognise the challenges of centralised government, and devolve greater political authority and autonomy to lower tiers of government and local communities. Because only at such community level, with shared values, can there be a realistic prospect for widest consensus on such complex issues.

Right. As economies become more prosperous, people become  more impatient with dictatorship  and authoritarianism. Democracy is not be-all and end-all for them, but the freedom of expression available under democracy is a lot more preferable than the unfreedom and self-censorship of undemocratic but rich economies like HK and Singapore. The Singapore government is more flexible and more sophisticated in its political dictatorship than that in HK or China. But there are several signs of discontent looking for more sophisticated outlets there.

I emphasized"self-censorship" above and not "HK (government) censorship". For instance, can ordinary HK people rally in the streets and shout or have huge placards saying "Down with China Communist Party", the same way that Filipino activists can rally in the streets and shout "Down with President Aquino (and all previous administrations) and the Liberal Party"?

If the answer is No, then there is self-censorship.

The HK demonstrators, including friends at the Lion Rock Institute (LRI) reject the status quo, that all major political issues must get approval  from Beijing. There has been a slow but steady reduction of free market culture in HK under the status quo. Friends at LRI and Momentum 107 have protested the huge tax hike of real properties in HK that has been implemented several years ago. They did not support the creation of a new bureaucracy, the Fair Trade Commission, which I think has been created already. They did not support the enactment of minimum wage law in  HK.

HK under the status quo is following Beijing footsteps. The protesters want a break from Beijing, to get out of China Communist Party delegated dictatorship as much as possible. The status quo  is leading towards bigger government in HK. The Democracy movement, though not a monolithic ideological movement, has elements unsupportive of more, bigger HK government.

Good posting by LRI . Exec. Dir. Peter Wong last Sunday with a link to an article by The Economist, What’s gone wrong withdemocracy,
The rise of  China which threatens democracy is nonsense. However, "one reason why so many democratic experiments have failed recently is that they put too much emphasis on elections and too little on the other essential features of democracy. The power of the state needs to be checked, for instance, and individual rights such as freedom of speech and freedom to organise must be guaranteed. The most successful new democracies have all worked in large part because they avoided the temptation of majoritarianism—the notion that winning an election entitles the majority to do whatever it pleases."

Hong Kong (and many other countries or economies) needs more democracy than ever. Democracy is good, not bad or unhealthy, for Asia. Freedom of expression without the use and advocacy for violence and aggression is more needed now. When governments use more force and coercion, explicit or implicit, by police or court harassment to limit freedom of expression, that means governments are getting bigger and becoming more allergic to protecting individual rights and liberty.

See  also:
Part 1, September 25, 2014
Hong Kong Democracy vs. China Dictatorship, Part 2, September 29, 2014
Lion Rock 11: Barun Mitra on Democracy, Reading Salon 2013, October 28, 2013 
Lion Rock 13: LRI Position on the Hong Kong Protests, October 08, 2014

Sunday, October 12, 2014

Free Trade 39: Advantages of Unilateral Trade Liberalization

Free trade is part of human nature. People may oppose it philosophically but consciously or unconsciously, they are engaged in it. Even militant protectionism crusaders are still humans, they need to eat, and they want free choice where to eat.  Do not go to restaurants that are too expensive for their budget, never go back to a resto which may be cheap but the service is too annoying. They want to be served well given their budget, or they may endure bad service in exchange for really cheap food. That is the beauty of voluntary exchange, no one is forced and coerced to give his/her money to people who do not provide their specific needs. That is the beauty of free trade.

Thus, even the most authoritarian governments recognize the value of free trade. But because they are authoritarians, or semi-authoritarian protectionists, they want to limit and restrict trade because they are protecting certain sectors, like the business interests of their friends, families and campaign financiers, or a considerable block of voters.Thus, multilateral trade negotiations towards free trade has become too bureaucratic and time consuming. 

Some countries and economies have taken the unilateral trade liberalization route -- Hong Kong, Singapore, Dubai, Chile, among others. And have good results. Chart below shows that as of 2001, average tariff in S. America was around 12 percent vs around 4 percent in East Asia, zero already in Singapore. East Asians are more receptive to unilateral trade liberalization than their counterparts in S. America or Africa.

Applied Most Favoured Nation (MFN) Tariff Liberalization in Latin America and East Asia.

source: Richard Baldwin, 'Unilateral Trade Liberalization", Center for Trade and Economic Integration, CTEI 2011-04,  http://graduateinstitute.ch/.../working.../CTEI-2011-04.pdf

When it comes to agricultural products though, economies in general are more protectionist even if they may be relatively free traders in non-agri products. Stark cases are Korea, Turkey, Egypt and Thailand.

The exceptions to this agricultural protectionism are the unilateral Asian free traders HK and Singapore, and some countries in S. America, Argentina and Brazil. Data also from R. Baldwin.

In this working paper at the WB, Nogues argued that "Developing countries would gain far more from unilateral than multilateral trade liberalization negotiations over many years." 

(Julio Nogues, 1989. "The Choice Between Unilateral and Multilateral Trade Liberalization Strategies", 24 pages),  http://wwwwds.worldbank.org/.../Rendered/PDF/multi0page.pdf

Chile experience is fantastic, from 220 percent tariff in 1973 to only 11 percent in 1991 (only 18 years after.) 

Source: Sebastian Edwards and Daniel Lederman, 1998. "The Political Economy of Unilateral Trade Liberalization: The Case of Chile", NBER working paper, http://www.nber.org/papers/w6510.pdf

A Cato paper, A Cautionary Tale on Negotiated vs. Unilateral TradeLiberalization (November 21, 2012), author Sallie James wrote,

But since the 1950s...trade theory has pretty-much consistently shown a hierarchy of mechanisms for increasing commerce across borders: unilateral trade liberalization is best, followed by multilateral trade liberalization (although the current WTO round of trade negotiations is dead), and then regional or bilateral agreements.
Two groups of people dislike unilateral trade liberalization. The first is the group of some local business (like cronies) and political  interests (trade unions, big farmer organizations). The second is the group of government trade negotiators and consultants (including academics), they do not want to lose their perks of frequent global junkets flying to many countries and flashing or exotic cities doing all sorts of trade bargaining that last for many decades. Consultants get huge amount of money justifying restrictions to trade, explicit or implicit; economic or social or environmental.

Ordinary consumers and independent researchers, them who are not corrupted by government and foreign aid money and consulting, should push the logic of unilateral trade liberalization. Ordinary consumers benefit from more choices, more options, where to buy and whom to sell.

See also:
Free Trade 35: EU-FNF Forum on 'FDI Engine for Job Growth', May 15, 2014

Free Trade 36: Taxation, Regulations, Trade and Rule of Law in ASEAN, August 05, 2014

Free Trade 37: Multiple Concerns and Regulations in the ASEAN, September 11, 2014

Free Trade 38: Liberalize Rice Imports and Demonopolize NFA, September 28, 2014

Friday, October 10, 2014

Korea Unification Soon?

Is the North Korea dictatorship crumbling further? Is the N-S. Korea unification happening soon? I really wish so.

Famous investor Jim Rogers, a rich American businessman who moved to Singapore since 2007 as he believed that this is the Asian century, said in 2013 during the Jeju Forum that he believed that a North-South Korea unification is possible by 2018 (+/- one year), and that it will be the "most exciting economy in the world." Yes, about 70 M people, with huge resources rechanneled from military to global trade.

Below are some encouraging news reports from various sources that point to the imminent collapse of the  N. Korea dictatorship.

(1) News from The Diplomat, October 1, 2014

K1) “Kim Yo-jong, the younger sister of North Korean leader Kim Jong-un, might be leading the hermit kingdom instead of her brother, a recent report from Seoul-based think tank, North Korea Intellectuals Solidarity (NKIS) revealed.

According to NKIS on October 1, Kim Jong-un — who has failed to appear at official events since early September — is getting medical treatment at Bonghwa Clinic from both domestic and foreign medical teams. Meanwhile, in his absence,  Kim Yo-jong is charged with handling important government decisions.”

(2) From Vice News, October 2, 2014

“An elite group of exiles from North Korea gathered in September in the Netherlands to discuss the state of the regime they used to serve. The conference included top diplomats, an ex-senior official of the Ministry of Security, and a high-ranking military officer, but the keynote address was given by Jang Jin-sung, formerly a key member of Kim Jong-il's propaganda machine. Included in Jang's speech was a surprising assertion: North Korea is in the midst of a civil war.

According to Jang — a former counterintelligence official and poet laureate under Kim Jong-il — members of the government's Organization and Guidance Department (OGD), a powerful group of officials that once reported only to Kim Jong-il, have stopped taking orders from his son, Kim Jong-un. The OGD, Jang says, has effectively taken control of the country, and a conflict is simmering between factions that want to maintain absolute control over the economy and others seeking to gain wealth through foreign trade and a slightly more open market.”

(3) From WaPo, October 4, 2014, is good. It was the top leaders of the North other than Kim Jong-Un, who unilaterally went to the South.

KYOTO, Japan— North and South Korea have agreed to hold another round of high-level talks after a top-level Northern delegation, including the men thought to be second and third in command behind Kim Jong Un, paid a surprise visit to the South on Saturday.

The unusual and unannounced trip — the first such high-level visit in more than five years — comes at a time of intense speculation about North Korea’s leadership, given that Kim, the third-generation leader of the communist state, has not been seen in public for a month….

“It’s a big deal, it’s really a big deal, because it’s completely unprecedented,” said Andrei Lankov, a North Korea scholar who studied in Pyongyang and now teaches in Seoul.

The 11-strong group from North Korea was led by Hwang Pyong So, widely considered Kim’s deputy. He’s the top political official in the Korean People’s Army and vice chairman of the National Defense Commission, which is led by Kim.

(4) And from The PCMD Gazette, also last October 4, is good news. 

"North Korea’s Organization and Guidance Department (OGD), the country’s most powerful group of officials, has stopped taking orders from Kim Jong-un. amid reports that the dictator has been overthrown.

Kim Jong-un has been missing for over a week and authorities originally tried to cover-up his absence by claiming he was recovering from ankle surgery."

Socialism and one-party dictatorship is destined to end wherever they may be, People are generally rationale, they want diversity, they want to be creative and spontaneous. Socialism/communism and one party dictatorship hates all that, they want uniformity, monotony, central planning and absence of spontaneity.

So Jim Rogers and other observers are correct. A unification of N-S Korea is coming soon. The dark horse will be the China commie government -- will it allow such unification and hence, stronger capitalism buffer near its backyard, or will it stage its own puppet regime and retain socialism with limited capitalism system, what it is doing now in China.

See also:
North and South Korea conflict, November 23, 2010
Criminals 11: Kim Jong Il, North Korea, December 20, 2011
Business 360 7: Jeju Forum for Peace, May 10, 2013
Chung ho Kim, Freedom Factory Ltd., May 28, 2013
EFN Asia 24: Jim Rogers talk at Jeju Forum, June 10, 2013

Thursday, October 09, 2014

Energy Econ 27: Expensive Electricity, FIT and Europe's Renewables,

I am engaged in a civil debate in a fb group, Amend the Electric Power Industry Reform Act (EPIRA). Many members there are anti-EPIRA, anti-privatization, anti-fossil fuels, and highly worshiping renewables like wind, solar and biomass.

As I posted several times on this subject, I have nothing against the renewables as I support all forms of energy sources. What I do not support is expensive electricity, high energy taxes and high subsidies to renewables just to make them "viable".

The experience of some European economies like UK and Germany in their hard push to depend more  on renewables and move away from  fossil  fuels has not been exactly good and favorable.

For instance, see this story from Forbes.

"You can’t build more PV solar than the rest of the grid can ramp up/down to accept. The necessary grid storage for large-scale solar power is a “maybe someday” technology, not something viable today. Calls for 50% of power to come from solar in our lifetimes are a fantasy, and we need to be realistic about that.

You can’t force utilities to buy unneeded power just because it’s renewable. The energy and materials to build the excess capacity just goes to waste. That is the opposite of green."

Renewables like wind and solar are not only expensive (hence, the need for high subsidies to make them "viable"), they are also highly unstable. A 100 MW wind plant can possibly give 50 MW at most on windy hours, and only 5 MW or zero on non-windy hours. Thus, big consumers like industrial parks and dense residential villages need back up power plants from non-renewable sources to prevent brown outs.

See also this report from Hot Air, 

"It’s no coincidence that Germany has some of the highest rates of renewable generation as well as some of the highest energy prices in the developed world. Their and several other European countries’ ambitions to self-revolutionize their energy sectors turned out to be a recipe for the precise disaster that they were conscientiously looking to avoid — i.e., more coal. This is what happens when you let big-government delusions of “green” grandeur commandeer policy, and the Obama administration seems determined not to learn that universal lesson."

In the Philippines, the currently expensive electricity (no feed-in-tariff (FIT) yet will become even more expensive with FIT for renewables. Will people justify even more expensive electricity for the PH via FIT?

Some renewables here like geothermal and big hydro have no FIT because they were not covered by RA 9513 or the Renewable Energy (RE) Act of 2008. This RE law gives FIT to wind, solar, biomass and run-of-river (small) hydro.

Some people ask, "What to do about electricity pricing that is the highest (or 2nd  highest) in Asia despite the promise of EPIRA to bring down prices?" 

My quick answers are:

1. Drastically reduce government taxes and fees on energy,
2. Abolish the royalty (another form of energy tax) on natural gas and geothermal,
3. Amend RA 9513 and remove FIT and renewable portfolio standards (RPS) provisions. Let renewables flourish even with zero subsidies.

4. Reduce significantly government bureaucracies and permits for power developers and generators, renewable or not.

Meanwhile, from the IEA, Medium Term Renewable Energy Market Report 2014, Summary. It shows how expensive (a) solar PV, (b) concentrated solar power or CSP, (c) onshore wind, and (d) offshore wind are, compared to (i) new coal and (ii) new gas turbines. Both for 2014 and 2020 projections.

This article by Dr. Roy Spencer, Why Don’t More People Care About Global Warming? (October 1, 2014) is cool.

"most people understand that fossil fuels have been necessary for the prosperity that we all enjoy (at least those under political systems allowing people to benefit from their labors). Energy which currently is dominated by fossil fuels, and will be for decades to come.

Modern prosperity, as evidenced by increased lifespans, has depended upon access to abundant, low-cost energy — fossil fuels. I think getting an extra 40 years of life in exchange for 1 to 2 deg. of warming is a pretty good deal. Might even be a win-win."

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