NEWS,19.09.2012

Russia expels 'meddling' USAid

Russia on Wednesday said it had given USAid until 1 October to halt its work as the US aid agency was meddling in domestic politics, a move that risks sparking a new diplomatic crisis with Washington.The termination of the US Agency for International Development's activities may also harm the operations of a string of NGOs that rely on its funding, including the vote monitor Golos that showed up irregularities in recent polls.The unexpected move appears part of an increasing crackdown in Russia on civil society after President Vladimir Putin's return to the Kremlin for a third term in May amid an outburst of street protests"The decision was taken mainly because the work of the agency's officials far from always responded to the stated goals of development and humanitarian co-operation," the Russian foreign ministry said in a statement."We are talking about attempts to influence political processes - including elections at different levels - through its distribution of grants," it added.USAid's activities "must be halted from October 1", it added, giving a short deadline that had not been revealed by the Americans when the decision was first made public in Washington on Tuesday.'Heavy blow'Anxious Russian NGOs expressed fears for their future financing - more than half of USAid's annual budget in Russia had been spent on democracy and civil society programmes as well as a substantial chunk on health projects."I am very sorry that the USAid office is closing," said Arseny Roginsky, the chairperson of Memorial, Russia's best-known campaigner for human rights and the preservation of historical memory across the country."It is impossible not to see here the continuation of the isolationist policy" of the Russian authorities, he added. Without giving further details, he described the material help of USAid as "significant".Lilia Shibanova, the director of Golos, described the halt in USAid's operations as a "heavy blow".She said there was now serious concern for the funding of its monitoring of local elections on 14 October, two weeks after the deadline for the closure of the USAid office."The problem is that as soon as Russian business starts giving funds to monitor elections it comes under pressure," she said.No need of 'external leadership'Viktor Kremenyuk, analyst with the USA-Canada Institute at the Russian Academy of Sciences, said that while the move was not an outright U-turn in foreign policy, it was a Kremlin "gesture aimed at worsening relations between Russia and the US"."Russia wants to say 'we do not need your help, we can stand on our own feet'," he said.The foreign ministry statement said that Russian civil society was "quite mature" and the country - now itself a foreign donor - was in no need of "external leadership".The expulsion of USAid comes after Putin signed a law forcing NGOs that receive funding from abroad to register as "foreign agents". He has even compared organisations like Golos to the disciple Judas who betrayed Jesus.A senior US administration official said that Washington regretted the decision, which according to a US government source also affects the future of 13 US staff in Moscow and 60 Russian staff."This is a difficult day for USAid," said the official, who asked not to be named.Similar incidents It is unclear whether some if any US funding of the organisations can continue but the official said that President Barack Obama's administration was committed to promoting civil society in Russia."Over the coming weeks and months the Obama administration will be looking at ways to advance our old foreign policy objectives using new means," said the official.The United States had first learned of the measure when Secretary of State Hillary Clinton attended the Apec summit in Vladivostok earlier this month, the official said.The departure of USAid echoes the 2007 clampdown on the activities of the British Council cultural agency which poisoned relations between Moscow and London. The US Peace Corps had also been asked to leave Russia in 2002.

Japan cabinet approves plan to exit nuclear energy

Japan's cabinet has approved a new energy plan to cut the country's reliance on nuclear power in the wake of last year's Fukushima disaster, but dropped a reference to meet a nuclear- free target by the 2030s, ministers said on Wednesday.Since the plan was announced on Friday, Japan's powerful industry lobbies have urged the government rethink the nuclear-free commitment, arguing it could damage the economy and would mean spending more on pricey fuel imports.Trade Minister Yukio Edano, who also oversees the energy portfolio, said the cabinet had approved the new energy plan."But whether we can become nuclear free by the 2030s is not something to be achieved only with a decision by policy makers. It also depends on the will of (electricity) users, technological innovation and the environment for energy internationally in the next decade or two," he said.In abandoning atomic power, Japan aims to triple the share of renewable power to 30 percent of its energy mix by the 2030s, but will remain a top importer of oil, coal and gas for the foreseeable future.Finance Minister Jun Azumi told a separate news conference that there needed to be flexibility in the policy to avoid putting a burden on the public in a country where nuclear supplied 30% of electricity before Fukushima.All but two of Japan's nuclear 50 reactors are idled for safety checks after an earthquake and tsunami in March 2 011 devastated the Fukushima Daiichi plant, causing the worst nuclear disaster since Chernobyl in 1986.Under the new energy plan, there should be strict implementation of a 40-year lifetime for reactors. It also said existing reactors shut after Fukushima should be restarted only if a new nuclear regulator confirms their safety and there should be no construction of new reactors.The newly established Nuclear Regulation Authority (NRA) will decide whether reactors currently under construction are safe enough to start commercial operations, Edano said.Asked if newly built reactors could run beyond the 2030s, Edano said a decision on this would be decided later.Reactors currently under construction include the 1,373-megawatt Shimane No.3 unit of Chugoku Electric Power Co's and the 1,383-megawatt Ohma unit of Electric Power Development Co's.

Wealth surge for richest Americans

The net worth of the richest Americans grew by 13% in the past year to $US1.7 trillion, Forbes magazine said today, and a familiar cast of characters once again populated the top of the magazine's annual list of the US uber-elite, including Bill Gates, Warren Buffett, Larry Ellison and the Koch brothers.The average net worth of the 400 wealthiest Americans rose to a record $US4.2 billion, the magazine said.Collectively, this group's net worth is the equivalent of one-eighth of the entire US economy, which stood at $US13.56 trillion in real terms according to the latest government data.But the 13% growth in the wealth of the richest Americans far outpaced that of the economy overall, helping widen the chasm between rich and poor.Bill Gates, the chairman of Microsoft Corp, topped the list for the 19th year in a row with $US66 billion, up $US7 billion from a year earlier.Warren Buffett, chairman and chief executive of insurance conglomerate Berkshire Hathaway, stood second with $US46 billion, followed by Larry Ellison, head of software maker Oracle Corp, with $US41 billion; and the Koch brothers, Charles and David, who run the energy and chemicals conglomerate that bears their name, Koch Industries, were tied for fourth with $US31 billion, Forbes said.The ranks of the top five were unchanged from a year earlier.Two notable names dropped from the top 10, however.Casino magnate Sheldon Adelson, also active in conservative political causes, fell to the 12 spot from No. 8 last year, and financier George Soros dropped five spots to No. 12 from the No. 7 position one year ago.The disappointing stock market debut of Facebook also took a toll on the fortune of its founder and CEO, Mark Zuckerberg.His net worth fell by nearly half to $US9.4 billion, and he slid to the No. 36 slot from No. 14 a year ago, Forbes said.

NEWS,17.09.2012

Billionaires score over millionaires

Many millionaires got poorer in the last year, but billionaires did just fine, using their heavyweight money management teams to ride out market and economic turmoil that hit the lesser rich, research company Wealth-X said on Monday.The ranks of people with at least $30m edged up to 187 380 but their total wealth fell 1.8% to $25.8 trillion - still a sum bigger than the combined size of the US and Chinese economies, Wealth-X said in a report.Hardest hit globally were those in the $200m to $499m range, whose numbers dropped 9.9% and whose fortunes shrank 11.4%, the World Ultra Wealth Report said, using data for the year through July 31.But the really, really rich got even richer as the number of billionaires rose 9.4% to 2 160 people and their wealth grew 14% to $6.2 trillion."Even at a billion or two billion, they have a much larger entourage, they have much more in the way of investment advice. They certainly get the attention of every major bank," Mykolas Rambus, Wealth-X's chief executive officer, told Reuters. "This was the issue about that mid tier, the $100m to $500m risk land. I don't think it appears these guys employ enough talent to help their own portfolios plus their holding companies to be successful."As Europe struggles and the US economy recovers fitfully, the affluent are shifting away from speculative investments into private companies, commodities and property, said Wealth-X, a Singapore-based firm that provides intelligence on the ultra-rich to banks, fundraisers and luxury retailers.Asia suffered the worst regional loss of wealth, with a fall of 6.8% to $6.25 trillion due to weaker equity markets and lower export demand from the West, it said.While wealth also shrank in Europe, Latin America and the Middle East, the rich saw their fortunes grow in North America (up 2.8% to $8.88 trillion) and Oceania (up 4.4% to $475bn) - much of that in Australia.But Asia's rich cannot be discounted, Wealth-X said, as the fall in wealth in Japan, China and India - home to 75% of ultra high net worth (UHNW) Asians - will reverse, based on the strength of the region's financial systems and economies."Total Asian UHNW wealth is forecast to surpass the US combined wealth by 2020," it said.

Private banks target the super rich

 

What do you get the client who has everything? An evening at a sleep school to get tips on how to beat insomnia? A chance to play cricket with former England star Andrew Flintoff? Advice on finding the right school?These are just some of the services offered by Barclays in its "Little Book of Wonders," underscoring the lengths to which the bank is prepared to go to win the custom of the super-wealthy at a time when its traditional businesses are struggling with weak economies and tougher regulators."There is more to wealth than managing one's assets," said David Hughes, Head of Affinity Partnerships at Barclays, which oversees the Little Book of Wonders. "This is a complement to the financial advice we give clients and a recognition of the world in which our clients exist."Attracting the business of wealthy clients, worth an estimated $42 trillion globally, is critical for banks seeking not only to maintain their profitability, but also to diversify their sources of funding and reduce their reliance on capital markets."Private banking, given the relatively lower capital requirements and the fee based nature of revenue is an area of growth and competition which is expected to increase," Jill Zucker, a partner at McKinsey's, told Reuters.Private clients pay on average 1 percent of assets under management in fees to their wealth managers each year, estimates specialist wealth management consultant Scorpio Partnership.Banks are keen to attract such fees as profits remain squeezed in other parts of their business, from high street lending to commercial and investment banking.For example, Barclays reported a 38 percent rise in adjusted pre-tax profit in its wealth and investment management division in the first 6 months of the year compared with a 15 percent rise in its retail and business banking and 11 percent rise in corporate and investment banking.Coutts, the 300-year old British bank which counts Britain's Queen Elizabeth among its clientele, is beefing up its non-financial services to hold onto elite customers.Ian Ewart, head of product, services & marketing, said the bank still loved to whisk away clients on horseracing jaunts and to a welter of events hosted in the social calendar of the glitterati - including the Cowes Quarter Ton sailing regatta and annual British Academy of Film and Television Arts awards bash.But as entrepreneur clients start to outnumber heirs and heiresses, who tend to have a different outlook, Coutts is spending more time, effort and money satisfying a thirst for intellectual "entertainment" and high-level networking in a business world where success increasingly depends as much on 'who you know' as 'what you know'.A new thought leadership series called Futurescope has been designed to help the bank's entrepreneurial customers analyse future macroeconomic issues and identify moneymaking opportunities in this decade and the next."Our clients can buy whatever they want for the most part. What they cannot buy - which is also what they really need - is to connect with people like them, to hear new ideas. The experience is far (more) important than a luxury freebie," he said.Tale of two millionaires But in expanding the breadth and depth of services offered, private banks will have to make sure the extra cost is worth their while as profit margins in wealth management buckle under the increasing cost of regulation, compliance and technology.The global wealth management industry is now paying $8 to generate every $10 of income, calculates Scorpio Partnership in its closely watched annual health check of the global private banking sector in July."The question of how you can continue to cater for clients that might be less profitable for you in the future is a difficult one," Coutts' Ewart said.In the case of its Little Book of Wonders, Barclays declined to disclose the cost of building and maintaining the online portal, saying it was part of its overall investment in its wealth management platform.In an attempt to offset the costs of providing the service, the bank has offered the luxury brands the opportunity to advertise, for a fee, on its Little Book of Wonders portal.Banks will pitch services such as Futurescope or the Little Book of Wonders to a select set of clients depending on their wealth and how they've made their money rather than offering blanket invites, to preserve the exclusivity of the offers.But as clients question the fees they pay, especially in an environment where investment assets are delivering lacklustre returns due to ongoing economic uncertainty, additional services not seen as essential to business needs might raise eyebrows."If there are fancy chandeliers and teacups, some clients might assume they are paying too much in fees," said Zucker.Such services are often tailored to the ultra high net worth individuals, with assets greater than $25 million, who are not only costing the banks more but are also not necessarily the most profitable.So-called 'Core Millionaires', with assets of between $1 million and $10 million, generate investment revenue margins on average two to three times higher than their wealthier counterparts, making greater use of more profitable banking and lending products, a survey by McKinsey estimates.These Core Millionaires are also projected to generate 60 percent of asset growth amongst all households with more than $1 million in assets by 2015."They're a bit of a lost set of clients," said Zucker. "Banks need to tailor their offering so there is growth in different market segments."So, where does this leave the Little Book of Wonders?A junior member of one of Britain's most successful entrepreneurial families, whose mother recently switched private banking allegiance, was sceptical that affluent individuals would be tempted to change banks based on free offers."Would clients be impressed by that? No way," said the family member, who declined to be named. "They just want to make sure that their banking is done, that their transfers happen, that they can speak to someone when they need to," he said.