Economy

How U.S. is lagging on quality of life

4/19/14

Fareed speaks with Michael Porter, a professor at the Harvard Business School, about a groundbreaking new social progress index – and how the United States is lagging on many indicators. Watch the video for the full interview or on GPS this Sunday at 10 a.m. and 1 p.m. ET on CNN.

You were shocked at what you learned about America.

Yes, I think this wasn’t the picture of America that I think many of us Americans have – that we are a leader, a social leader, that we've advanced the ball in terms of opportunity and the needs of our citizens. And it shows anything but that.

So if you look at the Social Progress Index, on the whole, what's striking is the top countries are New Zealand, Switzerland, Iceland, these small countries. But basically then a lot of European countries and Canada beat the United States.

Correct.

The United States is 16, Ireland is ahead of it, Japan is ahead of it, Britain is ahead of it, Germany is ahead of it.

Yes.

What does that tell us? What does that measure?

So this effort tries to really, for the first time ever, take let's call it the social or community or quality of life dimensions of a society, and capture those in a rigorous measurement framework – using the best data available in the world. That's the best and objective measures of these various multiple things. But of course, social progress is a broad concept.

Right. And that's where you break it down into these subcategories. Health and wellness, Japan is number one, Italy is number two, Switzerland is number three. You have to go all the way to 70 to get to the United States.

It's an area where the U.S. – if you actually look objectively, we're just not delivering. We actually spend the most money on this of any country in the world, probably in all of recorded history, in terms of our health care budget every year. But in terms of the actual outcomes – and by the way, the Social Progress Index measures the outcomes you achieve, not how much you spend, not how much you care, not whether you have a big heart…

 

 


West Wing Week: 4/18/14 or, “Pull Together, Fight Back, and Win”

4/18/14

This week, the President nominated Sylvia Burwell as Secretary of Health and Human Services, hosted an Easter Prayer Breakfast and a Passover Seder, discussed immigration reform with Faith leaders, welcomed the Wounded Warrior Soldier Ride, announced a major milestone in the continued implementation of the Affordable Care Act, and hit the road to New York City and Oakdale, Pennsylvania.

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Vice President Biden Joins Instagram

4/16/14

Today, we’re excited to announce the Office of the Vice President is joining Instagram to give followers a unique look inside the Vice Presidency. This new social media presence continues efforts by the Vice President’s Office to connect with citizens online, adding to his official Twitter handle and the Being Biden audio series.

The VP's Instagram followers will have access to behind-the-scenes photos from the road and around the White House. And today, as the Vice President joins President Obama in Pennsylvania to announce grants that will spur job training and apprenticeship programs, you’re invited to follow along on Instagram.

Stay tuned for photos and videos from the Vice President – and don't forget to check out our other official Instagram accounts, including: The White House, First Lady Michelle Obama, and Chief Official White House Photographer Pete Souza.

What's behind China's reforms?

4/15/14

For more What in the World watch Sundays at 10 a.m. & 1 p.m. ET on CNN

By Global Public Square staff

If Dick Cheney were arrested…and his assets seized…all in an anti-corruption effort by President Obama…you might say "What in the World," right? Well, as the New Yorker's Evan Osnos points out, that scenario is a rough analogy for what is going on in China today.

Some of you will remember that in the first week of 2014, we began the show suggesting that this would be "the year of China," meaning that the country was likely to go through enormous changes that would make or break its rise.

But even we have been surprised at how much has happened on almost all fronts. China is now being ruled by a new generation, spearheaded by President Xi Jinping who has consolidated power and appears to be the strongest and most ambitious Chinese leader since Deng Xiaoping. Consider what he has been doing in just one year in office.

First and most significantly is the anti-corruption drive. And at the forefront of that is the expansive investigation into Zhou Yongkang, China's former domestic security tsar, once head of China's National Petroleum Corporation and a former member of China's "untouchable" Politburo Standing Committee. Zhou is the man who has been called China's Dick Cheney by Osnos.

Authorities have detained several of Zhou's family members and associates and have seized assets worth $15 billion dollars. And President Xi has taken his anti-corruption drive to the military as well, exerting much more influence than did his predecessor. One result: officials reportedly charged former General Gu Junshan of using his power to amass illegal wealth, pointing to his posh homes and other extravagances that could not have been bought on a military salary.

The second area where one sees great change is the environment.

Everyone talks in China about the unbearable smog. A study released last July shows that air pollution in northern parts of the country can actually cut life expectancy by an average of 5.5 years.

Well, Beijing has now decided to begin a clean-up, promising to spend $280 billion to fight air pollution. This year, China has started to directly monitor and publish the pollution impacts of its biggest 15,000 culprits. China's urban middle class now routinely protests against not only polluted air, but polluted water as well. And in February, China announced a plan to spend $330 billion to clean up its water. This mass-scale, public effort may be a reaction to increased discontent, but it’s also about the economy. The impact of environmental degradation cost China 9 percent of its GNP, according to the World Bank.

Perhaps the most important set of proposals, not just for China but for world, are Xi's plans for economic reform. Last November, the party announced it would maintain its authority over the Chinese economy, but would allow the market to play a "decisive" role. The government vowed to take a less active role in the allocation of resources and said it would allow the private sector to invest in state-owned enterprises.

And in perhaps the most striking development, Premier Li Keqiang told a parliamentary meeting in March that China aimed to expand its economy by 7.5 percent this year but (and here's the key part) that growth would not get in the way of reform. Until now, the party has not faced up to reforms, always pushing them off and goosing the economy to keep jobs growing.

Now let’s be clear. So far, economic reform is all talk and little action. And one thing you don't see in this flurry of new policies and proposals is anything about political reform, moves toward greater pluralism or democracy. That's because the goal of all these ambitious measures is to strengthen the legitimacy of the Chinese Communist Party, not to weaken it.


Get Your 2013 Federal Taxpayer Receipt

4/14/14

Want to know how your federal taxes are spent?

President Obama is keeping his promise to make sure Americans like you can easily see what you're getting for your taxes.

Just enter a few pieces of information, and the Taxpayer Receipt gives you a breakdown of how your tax dollars are spent on priorities like education and veterans benefits.

Click here to get your 2013 federal taxpayer receipt.

Promise and Peril of Investing In Iraq, Interview with MENA Capitals’ Ali Albazzaz

4/14/14
 
Ali Albazzaz is a finance specialist focused on doing business in Iraq. He is a consultant working with MENA Capital, an investment company that focuses on the Middle East and North Africa, including Iraq.  That country has huge potential with its vast energy wealth along with huge needs after decades of wars and sanctions. This has attracted a wide variety of companies interested in developing its oil and gas sector along with rebuilding the nation in general. Unfortunately the rebirth of the insurgency might scare off foreign money. To discuss the promise and peril of Iraq is Ali Albazzaz.

1. Most of the talk about Iraq focuses upon the oil sector, but the country needs so much in terms of services and infrastructure that there are plenty of other opportunities. Outside of petroleum and gas what other sectors of the economy have attracted investment?

Housing and construction have received some foreign private investment, especially in the Kurdish region which has seen a plethora of housing developments, high-rise 5-star hotels, shopping malls and now Emaar's Downtown Erbil project. Unfortunately the picture in the rest of the country is not as rosy. There has been investment in hotels, some high profile housing projects have been signed or broken ground, and you can see visible signs of construction activity in Baghdad, where a few malls have now opened, but foreign investment is still limited in spite of Iraq's estimated 3 million housing unit shortfall.

The electricity sector has and will continue to receive a lot of investment. Whilst most of that has been from the Iraqi government, for engineering, procurement and construction contracts ($4.7bn for electricity projects in the 2014 budget), independent power producer projects (IPP) have been executed in the Kurdish region, and these are starting to be used in other parts of Iraq. The IEA estimated in 2012 that Iraq will need to build an additional 70 GW of generation capacity by 2035, so once IPP projects become entrenched outside the Kurdish region these will be a catalyst for further foreign investment of more substantial scale.

The shrine cities of Karbala and Najaf, which see millions of pilgrims per year, have seen a lot of investment in tourism related infrastructure, such as hotels, markets, shopping malls etc.

There has been some limited investment in industry (for example in building materials, steel), some investment in the telecoms sector (such as the three mobile operators that are largely owned by foreign telecommunications), and some investment in ports and logistics infrastructure.

2. Plenty of companies from the region such as Turkey and the Gulf states have gone into Iraq. Have there been as many companies from Europe, the U.S., and Asia doing business there?

There is a very significant presence of Asian companies. The Chinese, South Koreans, and to a lesser extent the Japanese, are active in the Oil and Gas, Construction, and Electricity sectors, among others. Iranian businesses are involved across a range of sectors, and like Turkey and the Gulf, are big exporters to Iraq. European and American firms are present, but nowhere near to the same extent as the countries above.

3. What issues do foreign companies face with Iraq’s banking sector and insurance?

Iraq's banking sector is still rudimentary but slowly improving. Foreign companies are able to use the better private banks to manage payments and payroll and for local foreign exchange operations. They do also provide Letters of Credit and Letters of Guarantee etc. The service levels of the state banks are so poor as to be effectively unusable, Trade Bank of Iraq being an exception. The biggest issue is the state of development of the banking sector. The balance sheets of most private banks are too small and they don’t have the skill set or appetite to participate in a meaningful way in anything beyond small projects. The entry of Standard Chartered Bank and Citibank is therefore much anticipated.

On the Insurance front foreign companies are able to get coverage but purchase it from outside of Iraq as the local market is not developed enough and does not have the depth even if it were [developed enough].

4. Iraq’s bureaucracy and corruption are rather infamous. What kinds of advice do you give to firms in dealing with those two issues?

With regard to bureaucracy, I recommend that firms work with the best local professional advisors, ideally those that operate in partnership with an international firm, and to choose an experienced, effective, and respected local partner. I also counsel them to set their expectations accordingly from the start of the process, and to be patient.

Corruption is rampant but firms do find ways of managing it in countries with similar levels of corruption and firms are able to conduct business in Iraq without resorting to it.

Some ministries and some local governments are better than others, so it’s important for firms and investors to be judicious about which counterparties they enter into agreements with. Firms can minimize the likelihood of rent-seeking behavior by enlisting the support of their national governments and engaging with Iraqi stakeholders (tribes, religious, civic groups) that may be of help.

With regard to internal graft and other illegal practices, firms need to put a lot of care in the recruitment and training of local management and staff, and be very clear about acceptable behavior. The major international audit firms are now operating in Iraq and are able to provide internal audit and assurance.

5. From 2003-2007 there was very little direct investment in Iraq. Then things took off in 2008 when the civil war ended. Now that the insurgency has been reborn and violence is taking off again in Iraq have you seen any change in foreign interest in the country?

The violence has dampened investor interest for projects in central, western, and northern Iraq - however some firms and investors are pushing ahead regardless, whilst many others have slowed down or suspended their plans (as opposed to cancelling them altogether).

It is not only the spike in violence that is of concern but also the governance issues and nature of Iraqi politics. The elections at the end of this month are unlikely to provide a quick resolution to these issues and there will probably be another protracted government formation period with increased violence in the interim, hence many firms are also waiting to see how the elections play out and what the repercussions are.

6. Kurdistan and southern Iraq are largely untouched by the current surge in violence. Do you think those areas will continue to see foreign businesses going there or will the fighting scare off companies in general from Iraq?

The Kurdish Region is not only unaffected but may be benefiting from further reinforcement of its stability and security compared to the rest of Iraq. I think businesses and investment will definitely keep going to that region, and will do so at an increasing rate.

Southern Iraq is being affected by the recent violence, but to a far lesser degree than the rest of the country. Foreign businesses will continue to be attracted, particularly because of the scale of ongoing investment in the oil and gas sector, the increase in provincial revenues and local incomes, its relative safety, and proximity to the Gulf.

Karbala and Najaf are also relatively more secure and have their own economic momentum which has not been greatly impacted.

Weekly Address: Ensuring Equal Pay for Equal Work

4/12/14

In this week’s address, the President underscores the importance of ensuring equal pay for equal work and highlights the steps his Administration has taken to expand opportunity and narrow the pay gap that exists between men and women. 

Transcript | mp4 | mp3

President Obama and Vice President Biden’s 2013 Tax Returns

4/11/14

Today, the President released his 2013 federal income tax returns. He and the First Lady filed their income tax returns jointly and reported adjusted gross income of $481,098. The Obamas paid $98,169 in total tax.

The President and First Lady also reported donating $59,251 – or about 12.3 percent of their adjusted gross income – to 32 different charities. The largest reported gift to charity was $8,751 to the Fisher House Foundation. The President’s effective federal income tax rate is 20.4 percent. The President pushed for and signed into law legislation that makes the system more fair and helps the middle class by extending tax cuts to middle class and working families and asks the wealthiest Americans to pay their fair share. In 2013, as a result of his policies, the President was subject to limitations in tax preferences, as well as additional Medicare and investment income taxes, for high income earners. The President and First Lady also released their Illinois income tax return and reported paying $23,328 in state income tax.

DOWNLOAD THE OBAMAS' TAX RETURNS

The Vice President and Dr. Jill Biden also released their 2013 federal income tax returns, as well as state income tax returns for both Delaware and Virginia. The Bidens filed joint federal and combined Delaware income tax returns. Dr. Biden filed a separate non-resident Virginia tax return. Together, they reported adjusted gross income of $407,009. The Bidens paid $96,378 in total federal tax for 2013, amounting to an effective tax rate of 23.7 percent. They also paid $14,644 in Delaware income tax and Dr. Biden paid $3,470 in Virginia income tax. The Bidens contributed $20,523 to charity in 2013, including contributing the royalties received from Dr. Biden’s children’s book, net of taxes, to the USO.

DOWNLOAD THE BIDENS' TAX RETURNS

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