Showing posts with label solution. Show all posts
Showing posts with label solution. Show all posts

Thursday, May 14, 2009

Ireland:Scrap NAMA and set up National Recovery Bank to drive new lending and job creation - Bruton

FG is opposed both the Government's creation of the National Asset Management Agency (NAMA) and Labour's temporary nationalisation plans for Irish banks.
Richard Bruton argues correctly that:
"Under Labour's proposal the taxpayer will become fully responsible for all the unknown, but potentially massive, banking losses that will materialise over the coming years"
He further argues that:
Under both NAMA and nationalisation, loan losses will only be shared between ordinary shareholders and taxpayers, while other providers of long-term capital and funding walk away scot free.

He criticizes proposals to waste taxpayers' money by propping up dodgy developer debt and bailing out international bond markets. He suggests that the Government should invest scarce taxpayers' money in clean banks with healthy balance sheets and an appetite to lend to struggling Irish businesses.

FG proposals to tackle Ireland's Banking Crisis:

Speaking during the Oireachtas debate on the banking crisis, Fine Gael Deputy Leader & Finance Spokesman Richard Bruton TD called for the establishment of a new State-run National Recovery Bank to drive new bank lending for investment and job creation, instead of the Government’s misguided National Asset Management Agency.“Eight months into the crisis, the Government has failed to get banks lending again. Thousands of jobs continue to be lost every month as credit facilities are withdrawn from viable businesses and financing remains scarce for new investment.“Fine Gael is deeply disturbed that the Government has rushed headlong into the NAMA scheme whereby the taxpayer will shoulder the responsibility for working out the losses on the massive €90 billion pot of loans on development lands and unsold or partially-built properties. This is an undertaking of Napoleonic proportions.“At a time of huge uncertainty when Governments the world over are cautiously groping towards solutions, this is not the time for a small country with a deep problem in the public finances to plunge into a project on a scale never before attempted. A similar, though more modest, approach adopted by the French Government in 1995 following the Credit Lyonnais crisis ended up costing taxpayers there €18 billion.“It is especially foolish to do this on the basis of a flimsy recommendation without any detailed evaluation of the potential hazards along the way. Huge concerns have been raised by many independent commentators about:

• The difficulty of pricing the loans to be purchased and the risk of taxpayers left shouldering huge losses;• The risk of long court battles with developers;

• The moral hazard of bailing out bondholders and other professional investors who created a banking bubble;

• The difficulty of managing an agency on this gigantic scale;

• The politicisation of loan recovery and write off.

“None of the many legitimate questions are being answered. Yet we learn that already a Chief Executive and an interim board is about to put this grand experiment into action.

“I can well understand why many favour nationalisation over this extraordinary gamble proposed by the Fianna Fáil Government. However we must also tread carefully regarding the option of nationalisation. It may not require the immediate injection of cash up front, but it does force the taxpayer to shoulder all of the problems created by the banks. It risks the taxpayer having to pay too much for the shares. It allows professional investors who funded highly risky activity by the banks to walk away scot free. And it politicises new lending decisions by the banks which in other countries have seen big powerful companies win out over smaller businesses.

Fine Gael favours a different approach. The first step is to establish a National Recovery Bank. This would be a wholesale bank funded by the ECB which would stand ready to provide the necessary liquidity to the covered banks to get credit flowing. It would be willing to buy at a fair market price the small business lending books or the mortgage books of any bank. The key features of the National Recovery Bank would be as follows:

• The necessary capital would be provided by the State, and could initially be in the range of €2 billion;

• It would be set up under well-established Irish Asset Covered Security (ACS) legislation, allowing it to efficiently raise additional funding of €30-€40 billion, initially from the European Central Bank and over time from private markets when they re-open;

• It could be established and operational within four to six weeks, and inject new lending into the economy without delay.“The advantages of this proposal over the other options are several:

• It immediately gets credit flowing – a straight fusion into the blood stream of small business;

• It helps banks to strengthen their balance sheet by swapping parts of their loan book for cash;

• It creates a solid spine to underpin present and future banking for the economy at a time when existing banks are intent on shrinking their own balance sheets to protect their independence;

• It allows existing relationships between businesses with their banks to continue, but in a new prudent framework dictated by the State bank;

• It leaves toxic property-related loans in the hands of the private banks who made them, and who have better skills and incentives than any State agency to recover as much as possible from those loans;

• It allows the banks to refocus on restructuring their operations and on working out the losses that they have incurred in an orderly way.

“Fine Gael recognises that the establishment of this National Recovery Bank is just a first step. The problem of unwinding non-performing loans remains. However, it would be foolish for the taxpayer to rush into undertaking this huge responsibility, either through NAMA or through nationalisation, without a proper assessment of the landscape ahead and a system for sharing out the losses equitably. The taxpayer simply can’t save everyone in this situation. Other countries are also coming to recognise this and are developing ways in which professional investors share in the cost of adjustment. Ireland would be foolish to rush in to solutions that close off new thinking.”

Monday, March 2, 2009

1500 Women A Day die in childbirth especially in Africa and South Asia-Why?

Women are dying in childbirth in the same numbers as they were decades ago. The slow progress is an outrage, argues Chris Brazier in the New Internationalist


Habibu is lying on matting on the mud floor of her hut. The contractions are coming thick and fast now. The pain is intense, but she draws comfort from the memory that, the previous three times, this agony gave way to the peaceful, exhausted bliss of holding her baby in her arms.


Her husband’s mother is on hand to help – she has, after all, given birth many times herself and seen many more children born. Water has been brought from the pump and sits in two large bowls ready to be used – one to wash the baby and the other to wash everything and everyone else; pieces of old cloth have been gathered over the months before so as to soak up any blood and bodily fluid. A kerosene lamp has been borrowed from a neighbour to cast any light needed on this dark West African night.


The delivery itself seems to go well: a girl, Mama says, now to be heard crying. Habibu lies back and gives herself up to the pleasure of there no longer being any sharp pain, only exhaustion and discomfort, and to the satisfaction of having brought another life into the world.

It is a while before Mama realizes that blood is still pumping out of Habibu, forming a widening crimson pool on the mat and the floor. She uses the rags to try to staunch the flow; to no avail. There is no sign of the placenta being delivered, as would normally happen within minutes of birth. Mama waits in hope for further precious minutes before realizing that the blood flow is not going to stop and that there is serious danger. Alarmed now, she summons her son, who sets out on his bicycle to try to contact the nurse at the government clinic 12 kilometres away.
By the time the nurse arrives, two hours have passed and it is too late for Habibu, whose life has drained away with her blood. There is nothing the nurse can do for the woman. Instead she tends to the newborn baby, while cursing under her breath the fees she has to charge for attending a birth at the clinic – fees that mean so many women opt to go it alone. She knows she could easily have saved her – an injection of oxytocin, perhaps, or a manual delivery of the placenta – but knows just as clearly that this desperate experience will be repeated on many other nights and days over the months and years to come.


The specifics of this story are fictional, though I name its victim Habibu in honour of a woman I knew in a Burkina Faso village who died in childbirth. She had just remarried after years of hardship raising children as a widow and had been looking forward to cementing her new marriage with a baby. She could and should have attended the nearest health centre for antenatal checks and for her delivery – the last time I visited it, the maternity unit at that health centre had yet to lose a mother during childbirth. But she opted not to do so – in part because her previous children had been safely delivered at home, but also because such supervision costs money, and even the smallest sums are hard to find in a subsistence farming family.

Just one story – but one that is repeated an average of 1,500 times every day around the world, and with particular terrible regularity in Africa and South Asia. In other cases, the complication might be not postpartum haemorrhage but an obstructed labour that demands, but does not receive, a caesarean section. In many such instances the baby will die along with the mother; in others, the mother will survive but will have lost her child. And for every one woman that dies, another 20 suffer injury, infection or disability that can even leave them shunned by their family and community.

In the vast majority of these cases, the deaths are eminently preventable. While the number of child deaths worldwide has consistently fallen – from around 13 million in 1990 to 9.7 million in 2006 – the maternal mortality toll has remained stubbornly similar. For decades, the international estimate of the number of maternal deaths each year has hovered just over the half-million mark.

You might assume from this that maternal deaths are somehow mysterious, untouchable by medical science or development interventions. Yet nothing could be farther from the truth. Not only could the number of maternal deaths be radically reduced, but it could also be done within a few years if only there were sufficient will.
This was one reason why, when the Millennium Development Goals were set in 2000, arguably the most ambitious of all the targets set was in relation to maternal mortality. Whereas the target was to cut poverty in half and to cut child mortality by two-thirds, the aspiration was to slash the maternal mortality ratio by three-quarters. The chart overleaf shows just how far the world is falling short.
This is where the gulf between rich and poor worlds is at its widest and most obscene. The lifetime risk of maternal death is just 1 in 8,000 in the Global North compared with 1 in 76 in the Global South. At the national extremes, an Irish woman has a 1 in 47,600 chance of dying from a pregnancy-related cause compared with a staggering 1 in 7 chance of death for a woman in Niger.


Click to enlarge


No matter how good the supervision or the medical facilities, some deaths in childbirth will always occur. But the statistics indicate clearly how much less hazardous it is for a woman in the West now to have a baby than it was for previous generations. There is no point in pretending that Ireland’s remarkable safety record could be replicated overnight all over the world. But the Millennium Development Goal could certainly still be achieved – even now, with only 6 years of the 25 left to run, when such pathetic progress has been made to date. And, were we to do so, 400,000 women every year would be saved from unnecessary death – and their husbands, children and families from unimaginable grief.

Given this, there are just two big questions to ask. How might these lives be saved? And, if we know how to save them, why isn’t it happening?

The ‘how’ is surprisingly straightforward. The best way to reduce maternal mortality (as well as the deaths of newborn babies) is to ensure that all births are attended by skilled health workers – trained midwives, nurses or doctors. At the moment only 59 per cent of births in the developing world are attended. The lowest rates of skilled attendance are in South Asia (41 per cent) and sub-Saharan Africa (43 per cent) and it is no coincidence that these are also the regions with the highest incidence of both maternal and neonatal mortality. If you live in the countryside in one of those regions, moreover, you’re about half as likely to have your birth attended as if you live in a city.

Ensuring that skilled workers are there during the delivery will cut out many of the unnecessary deaths. To save even more lives, a suitably equipped maternity centre needs to be within reasonable striking distance (less than two hours’ journey away) if some major obstetric complication arises.

In the simplest terms, if every birth were attended by a skilled health worker the numbers of maternal deaths would tumble
Of course there are all kinds of other factors involved that would further reduce maternal mortality – among them better nutrition for pregnant women, better access to contraception, antenatal and postnatal visits, teaching each pregnant woman and her family about the danger signs. But, in the simplest terms, if every birth were attended by a skilled health worker the numbers of maternal deaths would tumble.

If it is that simple, that attainable, why is it not happening? Is this not something the whole world could agree on as an uncontentious objective? Isn’t motherhood, like apple pie, supposed to be an unchallengeable good?

Actually, the stubborn lack of progress on maternal mortality suggests that the root cause lies in women’s disadvantaged position in most countries and cultures. In countries with similar levels of economic development, maternal mortality tends to be inversely proportional to women’s status – in other words, the worse women are treated in society in general, the more likely they are to die in childbirth.1

Against this background of discrimination, often handed down from generation to generation by cultural tradition, initiatives to enhance maternal health need to go hand in hand with measures to promote women’s rights and to protect girls and women from violence, exploitation and abuse. Getting girls into school is a fast track to improving maternal health (and the health of their children) later; it also helps to protect them from child marriage, with its inevitable consequences of premature pregnancy and motherhood. The evidence is clear that educated adolescents are more likely to wait until they are out of their teenage years, when pregnancy risks are highest, to begin a family, and are more likely to have healthy babies. Pregnancy and childbirth-related deaths are the leading cause of mortality for girls aged 15-19 worldwide, killing 70,000 every year. Girls who give birth at even younger ages than 15 are even more at risk due to their physical immaturity, being five times more likely to die in childbirth than women in their twenties.2

Because there is such a close link between women’s oppression and maternal mortality, we need to treat maternal health as a fundamental human right – especially if we are to reach the poorest and most socially excluded women. The Convention to Eliminate Discrimination Against Women (CEDAW), which has been ratified by 185 countries, requires that governments ‘ensure to women appropriate services in connection with pregnancy, confinement and the post-natal period, granting free services where necessary, as well as adequate nutrition during pregnancy and lactation’. Very few developing countries are currently delivering on this commitment.

So women’s oppression is part of the background. But don’t go away thinking that this means there’s little that can be done about maternal mortality. The scandal is that mothers are dying unnecessarily because the world is unprepared to stump up the relatively meagre resources required to protect them.

That maternal deaths could be reduced by making sure all deliveries were attended has been known for decades – certainly ever since the international conference at Alma Ata in 1978 that propounded the notion of Primary Healthcare. The Alma Ata vision was of relatively low-cost outreach workers in communities, building on the model of ‘barefoot doctors’ pioneered in Maoist China. But those health workers and midwives at work out in the community were always supposed to be backed up by clinics – and beyond them hospitals to which they could refer patients.

The scandal is that mothers are dying unnecessarily because the world is unprepared to stump up the relatively meagre resources required to protect them
This eminently sensible model of an integrated healthcare system that could have transformed the lives of people right across the Majority World was abandoned almost entirely because those pulling the purse-strings of ‘development’ considered this to be too expensive.

It was replaced in the 1980s by the disastrous idea that the funding gap in health should be met by getting the ‘consumers’ themselves to pay user fees. The legacy of that approach is still killing women all over Africa and South Asia, where the poor inevitably take their chances rather than pay for care, just as Habibu did.

A great deal of time and many millions of lives have been lost in the intervening decades since the vision of the Alma Ata Declaration was articulated, but we have returned to the same point. An integrated health system that would allow the MDGs to be met, and would transform maternal, neonatal and child health worldwide, is still achievable – provided the necessary resources are invested.

We could not get overnight to the point where all births are attended and have access to emergency obstetric care when needed – especially given the drain of doctors and nurses away from the countryside and even from Majority to Minority Worlds. There is at present a shortage of 2.3 million doctors, nurses and midwives spread across 57 countries.3 But ultimately it is still a question of resources: if we spent the money required to create health systems that functioned properly, we could still solve this problem in time to meet the MDG target.4

Back in 2003, global development assistance to maternal and neonatal health stood at $663 million a year. It was estimated then that an extra $6.1 billion would be required each year by 2015 to increase coverage to desired levels.5 To put this in perspective, the economic impact of maternal and newborn deaths has been estimated at $15 billion per year in lost productivity, while global military spending passes the $6-billion mark every one-and-a-half days.6

As global recession takes hold and the economic meltdown continues, it will be argued that such resources cannot easily be found. Yet with what ease are hundreds of billions of dollars found to bail out banks, to insure the financial system against its bad debts! Why could we not, over the last two decades, have found the much smaller sums necessary to bail out poor countries by investing in the kind of health services they so badly needed? Why could we not, long ago, have spent the sums necessary to insure young women and their families the world over against death and disability?

This article began by telling the story of Habibu, before sweeping off into the realms of statistics and health policies to make its case. But it is all too easy in discussing the global situation to forget that every single one of the 536,000 mothers who die in childbirth each year has her own story just like Habibu’s. Like her, they approached their labour full of expectation and hope for the new life that they were about to bring into the world, only to die for want of the care that should have been their right – and that mothers in the rich world routinely expect. We should hold stories like theirs in the forefront of our minds as we consider in the months and years ahead exactly what kind of world economy we are now to remake.

1 The Lancet 2006: 368: 1535-41.
2 Giving Girls Today and Tomorrow: Breaking the Cycle of Adolescent Pregnancy, UNFPA 2007, citing various sources.
3 World Health Report 2006.
4 For more detail on how the MDG target could still be met, see UNICEF’s two flagship publications Progress for Children No 7, September 2008 and The State of the World’s Children 2009, both accessible via www.unicef.org
5 From T Powell-Jackson et al, ‘A countdown to 2015: tracking donor assistance to maternal, newborn and child health’, cited in The Lancet 2006: 368: 1535-41.
6 Thoraya Ahmed Obaid, executive director of the UN Population Fund (UNFPA), speech to the UN General Assembly, reported in Thalif Deen, ‘UN Poverty Goals Face New Threats’, Terra Viva UN Journal, 3 April 2008, Vol 16, No 57.

Saturday, February 21, 2009

Olle Wästberg, Director General of the Swedish Institute reveals how the Swedish Banking Crisis of 1992 was resolved

Olle Wästberg, Director General of the Swedish Institute reveals some insights -garnered from his inside track in the early 1990s- into the bone-shaking Swedish banking crisis and its eventual resolution. This article appeared in the Swedish English Language Newspaper-The Local . Here is a brief excerpt.

“....Nowadays when international newspapers and magazines write about “the Swedish model,” they allude to the way Sweden managed the financial crisis in the beginning of the 1990s.Back then, the banking crisis was handled by the then Minister of Fiscal and Financial Affairs Bo Lundgren (now Director General of the Swedish National Debt Office), his State Secretary Urban Bäckström (now Director General of the Confederation of Swedish Enterprise) and the leading civil servant in the field Stefan Ingves (now Chairman of the Riksbank)........

Hopefully Irish policy makers will learn from the Swedish experience. The full article may be accessed here