Latest Developments, June 7

In the latest news and analysis…

Mining fears
Accounting giant PricewaterhouseCoopers has published its annual report on the state of the world’s top 40 mining companies, in which it expresses concern over “resource nationalism” despite record combined profits of $133 billion in 2011:

“Ownership of resources and mining industry fiscal regimes remain high on the agenda for many governments around the world. Nations are looking to take an increasing share of profits and resources through a range of measures. Ongoing discussions and debates, formal reviews of fiscal regimes, or recently enacted changes have been seen in countries such as Australia, Chile, Ghana, Peru, and South Africa.

Governments are under pressure from local communities and other key stakeholders, and as a result, the stability that previously existed in many nations is deteriorating. High commodity prices have increased the industry’s visibility, triggering stakeholders to seek a bigger piece of the pie.”

Sales assistants
Embassy Magazine reports that the Canadian government is actively helping domestic arms manufacturers find buyers abroad:

“In the last few years, the Canadian Commercial Corporation, a Crown corporation, has helped Canadian firms sell everything from military hardware and weapons to wiretapping technology, forensics for ballistics, surveillance, document detection, sensor systems, bulletproof vests and helmets, training, and other services.
They are partnering with government ministers to get the job done. It’s called ‘co-operative marketing,’ according to CCC president Marc Whittingham.
The way it works is that firms tell the organization which markets they’re interested in, and when corporation representatives or a minister is travelling, they are able to ‘further that pursuit,’ he said.”

Banking rules
The New York Times reports that a hearing into JPMorgan Chase’s “multibillion-dollar trading loss” has led to more talk of the need to impose stricter limits on the activities of US banks:

“Several Democrats have seized on the news of the bank’s loss, saying the case underscores a need to enforce a strict Volcker Rule.
The rule, named for Paul A. Volcker, the former chairman of the Federal Reserve, would ban banks from trading with their own money, a practice known as proprietary trading. Support for the new regulations gained momentum after JPMorgan’s loss disclosure last month.
But the scope of the rule, which regulators plan to complete in the coming months, is unclear. For one, it allows banks to use hedges to offset risk. Regulators have yet to decide how broad to make that hedging exemption, prompting some Democrats to push for clarity.”

Oil troubles
Business Daily reports that the recent discovery of oil in Kenya by UK-based Tullow Oil has touched off tensions in local communities:

“The oil find in Turkana is touching on land ownership and compensation and last week a meeting to discuss the discovery aborted as locals and legislators demanded more involvement in the decisions on the black gold resource.
‘Engagement with the locals has not been smooth. We had planned a forum for Wednesday on the oil discovery but it has aborted on account of consensus. MPs from the two counties and those in relevant committees of Parliament have said they were not consulted,’ said [Energy Ministry Permanent Secretary Patrick] Nyoike.”

Hip hop wars
Columbia University’s Hishaam Aidi writes on the significance of the growing debate over hip hop in Europe:

“European government officials are increasingly worried about the influence that Muslim rap artists wield over youth, and are scrutinising hip hop practices in the immigrant neighbourhoods, trying to decide which Muslim hip hop artists to promote and which to push aside.

The debate over hip hop, Europe’s dominant youth culture, stands in for a much larger debate about race, immigration and national identity. With many of the biggest stars being Muslim, the disputes over which Muslim hip hop artists are ‘moderate’ or ‘radical’ are also disagreements over what kind of Islam to allow into the public space.”

Burma caution
Burma partnership’s Khin Ohmar argues that the international community needs to put the brakes on the sudden race to invest in her country:

“There are no such things as environmental impact or social impact assessments. There is no participation from any group that represents people’s interests in the decision-making process. Rule of law is extremely weak, with a subordinate and ineffective judiciary, arbitrary arrests, widespread corruption and a culture of impunity.
Burma is quite simply not ready. Investment, particularly in the country’s unstable ethnic areas, serves to exacerbate human rights abuses and causes major environmental and social damage. As long as the military has the biggest say in the development of Burma, the status quo won’t really change. Foreign investors should wait until the nation is reconciled before proceeding with the unabated enthusiasm currently on display.”

Big money
UC Berkeley’s Robert Reich looks at the impacts the US Supreme Court’s “grotesque 2010 Citizens United vs Federal Election Commission decision” is having on the country’s presidential election campaign:

“According to the reliable inside-Washington source Politico, the Koch brothers’ network alone will be spending $400m over the next six months trying to defeat Obama, which is more than Senator John McCain spent on his entire 2008 campaign.
Big corporations and Wall Street are also secretly funneling big bucks into front groups like the US Chamber of Commerce that will use the money to air anti-Obama ads, while keeping secret the identities of these firms.”

Fragile union
The Financial Times’ Martin Wolf writes on the inherent difficulty of maintaining an economic union without corresponding political cohesion:

“Given such uncertainty, panic is, alas, rational. A fiat currency backed by heterogeneous sovereigns is irremediably fragile.
Before now, I had never really understood how the 1930s could happen. Now I do. All one needs are fragile economies, a rigid monetary regime, intense debate over what must be done, widespread belief that suffering is good, myopic politicians, an inability to co-operate and failure to stay ahead of events.”