NEWS,16. AND 17.05.2013

Pope rails against economic dictatorship

Pope Francis issued a strong call for world financial reform on Thursday, condemning a heartless "dictatorship of the economy" and saying the economic crisis had made life worse for millions in rich and poor countries.
"Money has to serve, not to rule," he told ambassadors in the first major speech about finance since his election in March in which he also urged states to take greater control of their economies and protect the weakest.
The economic crisis had created fear and desperation, diminished joy of life and increased violence and poverty as more people struggled to get by in "undignified" ways, the pope said.
There was a "need for financial reform along ethical lines that would produce in its turn an economic reform to benefit everyone," he added.
"We have created new idols. The worship of the golden calf of old has found a new and heartless image in the cult of money and the dictatorship of an economy which is faceless and lacking any truly humane goal," he said.
The reference was to the Book of Exodus in the bible, when the Israelites worshipped a golden calf while Moses was at the top of Mount Sinai receiving the Ten Commandments.
While Francis' predecessor Benedict also called for changes in economic systems, he did so in often dense intellectual language.
Francis seemed to be expressing very personal views forged from his experience with the poor in Latin America.
Francis, who has said he wants the 1.2 billion-member Catholic Church to defend the poor and be more austere itself, urged more state control over economies.
"While the income of a minority is increasing exponentially, that of the majority is crumbling," he said.
"This imbalance results from ideologies which uphold the absolute autonomy of markets and financial speculation, and thus deny the right of control to states, which are themselves charged with providing for the common good," he added.
Market tyranny
Speaking of financial markets he said: "A new, invisible and at times virtual, tyranny is established, one which unilaterally and irremediably imposes its own laws and rules."
In many cases, the value of people was judged by their ability to consume, he added.
The pope's comments add to growing expressions of concern about a global economic malaise that has left millions out of work or hanging on to insecure, short-term jobs.
Francis, the former Cardinal Jorge Bergoglio of Buenos Aires, said his pontificate would side with the poor on social and economic issues.
"The Pope loves everyone, rich and poor alike, but the Pope has the duty, in Christ's name, to remind the rich to help the poor, to respect them, to promote them," he said.
Francis, who will visit a slum during his trip to Brazil in July, urged "those in power to be truly at the service of the common good of their peoples" financial leaders "to take account of ethics and solidarity".

Pressure too much for some top CEOs

On approaching his 60th birthday this year, long-serving Tullow Oil boss Aidan Heavey told staff he felt "like two 30 year-olds".
A handful of recent shock departures by 50-something chief executives at European blue chip companies - none of them under any obvious pressure to quit - suggest some of his peers either lack that vigour, or want to channel it elsewhere.
Peter Voser is giving up one of the world's most challenging CEO roles at Royal Dutch/Shell next year, before his 55th birthday, in pursuit of a "lifestyle change".
Swiss engineering group ABB's 55-year old boss Joe Hogan is also going, for "private reasons". Pierre-Olivier Beckers, 53, is walking out on Belgian retailer Delhaize , and Paul Walsh, 57, is waving goodbye to drinks multinational Diageo.
All four are about average European CEO age.
While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted up in recent years, and not just because of the tough economic times.
"The reality is it's gruelling. It's really tough, and there comes a point where you don't want to do it any more," said Ian Butcher, who headhunts board-level and senior executives for MWM Consulting.
"The quarterly reporting, the governance, the regulatory aspects, it just becomes very wearing - the level of scrutiny, the pace at which things are moving, the short-term nature of how people look at any given situation. Even over the past five years these things have made CEO a tougher position to hold, and the travel that people have to undertake in these jobs - it's just something they run out of steam on."
Some recent early retirees, while still well short of traditional retirement age, also got to the top spot early.
"They're still in their early fifties, with energy and a desire to do something, but they want to do something different, something quite significantly different sometimes," says Butcher.
Voser fits that bill. He has no plans to collect well-paid chairmanships and non-executive directorships, as many ex-CEOs have done in the past. Former Tesco chief Terry Leahy has also resisted that gravy train since he left two years ago.
As for the early starters, executive search industry professionals point at people like Andrew Witty, the CEO of GlaxoSmithKline, who took on the job aged 44 in 2008 and would have to stay in harness for another decade to reach 60 in the role.
Blue-chip bosses as young as Witty are still rare, but over a quarter of Europe's current crop have less than two years in the job, and more than half have less than four, according to data from executive search specialists BoardEx.
Median CEO age is 55 years
The BoardEx data, collected for Reuters from 238 companies in the main stock indexes of Germany, Britain, France, Spain, Italy, Belgium, the Netherlands and Denmark, puts the median CEO age at 55, and the median tenure at four years. Only 16 percent of the group have held on for 10 years and more.
The longest serving of them is Martin Gilbert of the British fund Aberdeen Asset Management. Though younger, at 57, Gilbert pips the 28.3-year tenure of Tullow's double thirty year-old Heavey, with 29.8 years at the helm.
There are 17 top European CEOs who have been in the job for less than six months, and the youngest of the 225 in the group for whom ages were available is Vitaly Nesis, 37, who runs Polymetal International, the London-listed Russian precious metals miner.
While the recent spate of quitters are looking for something else to do, there are still some who appear to want nothing but.
In the BoardEx group there are four over 70, and the oldest by eight years is Albert Frere, CEO of Group Bruxelles Lambert .
Perhaps some linger on for fear that the pension pot is still a little light. Frere will have put such qualms behind him long ago. At 87, he is Belgium's richest man.

China steps up inspection of meat trade

China has begun a crackdown on the sales of fake, diseased and tainted meat products after a series of scandals that have further dented public confidence in the food industry, the official Xinhua news agency said on Thursday.

It said the State Council, China's cabinet, recently ordered local government departments to step up checks on meat and processed meat products, and carry out detailed inspections of rural factories, workshops and warehouses as well as private slaughterhouses. 

"The current water-injected meat, fake beef and mutton, dead livestock and other types of toxic and hazardous meat has aroused widespread concern," said the report.

"Local governments at all levels should strengthen their organisation and leadership, to severely crack down on fake beef and mutton and other illegal and criminal activities."

Pork and poultry prices have suffered this year as a result of a series of food safety scandals, a bird flu outbreak and crackdown on expensive government banquets. 

China has long been plagued by poor food safety standards, but many of the recent scares have involved its meat trade.

Earlier this month, the police said it had uncovered a crime ring that passed off more than $1m rat and small mammal meat as mutton. 

It came after pictures of thousands of dead pigs dumped in rivers supplying Shanghai caused widespread outrage. 

A media report last year uncovered excessive levels of hormones and antiviral drugs in chicken meat supplied to KFC, whose parent company is Yum Brands, and McDonald's. 

Beijing has repeatedly called for greater inspection of food processing facilities to tackle food safety problems, but such actions appear to have done little to improve standards.

The latest clampdown will encourages local governments to offer rewards to people who inform on illegal activities.

The government also called for implementation of measures for the proper disposal of livestock that had died from disease.

Tycoon: Mining firms treated as ATMs

Australia's richest person Gina Rinehart on Friday accused the government of using the mining industry as an ATM, warning of an unhealthy reliance on the sector and unsustainable debt levels.

In a speech to be delivered at the Australian Mines and Metals Association conference, the outspoken tycoon, chairman of Hancock Prospecting, cautioned that without reform Australia risked the debt problems faced by countries like Greece.

"Let's not be too proud to admit that we're really just a large island with a small population with record debt," she said, according to extracts of the pre-recorded speech.

"Plenty of Australians know this in a casual way.

"What few seem to properly understand even people in government  is that miners and other resources industries aren't just ATMs (cash machines) for everyone else to draw from without that money first having to be earned and, before that, giant investments are made."

Australia's economy has been driven by the mining industry but the boom is approaching an investment peak and a bumpy transformation lies ahead as alternative sources of growth are sought.

Mining projects have faced headwinds from depressed conditions in Europe and the United States, softening growth in China and increased competition from other producers as well as falling commodity prices.

Earlier this week, the government revealed a significant plunge in revenues due to sluggish corporate tax earnings and announced an $18bn budget deficit for 2013/14, having previously forecast a surplus.

Rinehart said the government had been complacent in managing the commodities boom and its debt levels which are forecast to peak in 2014/2015 at 11.4 percent of GDP were unsustainable.

"It is incredible that after the last six years of record commodity boom times, we now find the once lucky country in record debt, with the budget tipped to deliver yet another deficit, to further increase our record debt," she said.

"Without mining and its related companies this country has no hope of repaying our record debt without facing the problems Greece and other countries faced with overspending and consequent debt traumas."

Rinehart has been a fierce critic of the government's mining and carbon taxes, saying that along with red tape and high wages it had made Australia "cost uncompetitive".

According to the Australian Financial Review, she was also to use her speech to urge Australia to borrow from the economic policies of Singapore, using low taxes to encourage investment and development.