Business
Authors
Siegfried S. Hecker
News Type
News
Date
Paragraphs
Siegfried Hecker testified April 30, 2008, about the importance of expanding the cooperative threat reduction programs to counter the growing proliferation of nuclear weapons and weapons capability. A formal written statement is also available: Hearing of the United States Senate Committee on Appropriations, Subcommittee on Energy and Water Development

Thank you Chairman Dorgan, Senator Domenici and distinguished members of the Committee for giving me the opportunity to comment on the National Nuclear Security Administration's Defense Nuclear Nonproliferation programs and its 2009 budget request. I have a written statement that I would like to submit for the record.

This morning I will summarize the three main points in my statement. My opinions have been shaped by 34 years at the Los Alamos National Laboratory and nearly 20 years of practicing nonproliferation with my feet on the ground in places like Russia, China, India, North Korea and Kazakhstan.  Much of this I have done with the strong support and encouragement of Senator Domenici.

1) The proliferation of nuclear weapons and weapons capability is growing. Today, we face a nuclear threat in North Korea, nuclear ambitions in Iran, a nuclear puzzle in Syria, recently nuclear-armed states in Pakistan and India, and an improved, but not satisfactory, nuclear security situation in Russia and other states of the former Soviet Union. The danger of nuclear terrorism is real. This is not a fight the United States can win alone. We cannot simply push the dangers beyond our borders. It is imperative to forge effective global partnerships to combat the threat of nuclear terrorism and the proliferation of nuclear weapons. Meeting these challenges requires diplomatic initiative and technical cooperation. The United States must lead international diplomacy and DOE/NNSA must provide technical leadership and capabilities. The NNSA has done a commendable job in nuclear threat reduction and combating nuclear proliferation. However, funds to support these activities are not commensurate with the magnitude or the urgency of the threat.

2) CTR began with Nunn-Lugar followed by Nunn-Lugar-Domenici legislation directed at the aftermath of the breakup of the Soviet Union. We must stay engaged with Russia and the other states of the Soviet Union. Much progress has been made, but more needs to be done. We have to change the nature of the partnership to one in which Russia carries more of the burden.

We should expand the cooperative reduction programs aggressively to other countries that require technical or financial assistance. The nuclear threat exists wherever nuclear materials exist. These materials cannot be eliminated, but they can be secured and safeguarded. We should more strongly support the International Atomic Energy Agency and provide more support to countries that try to implement UNSCR 1540 to prevent nuclear terrorism, for example.

We should enlist other nations such as China, India, and for that matter, Russia, to build a strong global partnership to prevent proliferation and combat nuclear terrorism. China and India have for the most part sat on the sidelines while the U.S. has led the fight. Russia has not engaged commensurate with its nuclear status. These efforts are particularly important if nuclear energy is to experience a real renaissance.

3) The hallmark of all of these efforts must be technology, partnership and in-country presence. The DOE/NNSA has in its laboratories the principal nuclear expertise in this country. It should be applauded for sending its technical experts around the world, often in very difficult situations (I met up with the DOE team in North Korea on a bitterly cold February day). However, both for structural reasons and budgetary shortfalls, that technical talent is slowing fading away. We do not have in place the necessary personnel recruitment or the working environment in the laboratories or the pipeline of students in our universities to replenish that talent. I strongly support the NNSA's Next Generation Safeguards Initiative, which is aimed at tackling this problem.

Mr. Chairman, when I first visited Russia's secret cities in 1992 shortly after the fall of the Soviet Union, I feared that its collapse may trigger a nuclear catastrophe. The fact that nothing really terrible has happened in the intervening 16 years is in great part due to the DOE/NNSA programs that your are considering today. We must now be just as innovative and creative to deal with the changing nuclear threat today.

In my statement I also mention the implications of my recent trips to North Korea and to India. However, since I am out of time, I will need to leave those for your questions.

Thank you for your attention.

All News button
1

Institute for Knowledge and Business Engineering
University of Vienna
Brunnerstrasse 72
A-1210 Vienna

0
Assistant Professor, Department of Knowledge and Business Engineering, University of Vienna
Forum on Contemporary Europe Visiting Scholar (2008)
hans-georg.fill_black_white.jpg PhD

Dr. Hans-Georg Fill is assistant professor at the Department of Knowledge and Business Engineering at the University of Vienna. He completed the doctorate program in Economic and Social Sciences with a major in Business Computer Science in October, 2006. His doctoral dissertation is titled, "Visualization for Semantic Information Systems."

Dr. Fill was a visiting scholar with the Forum on Contemporary Europe from March-April, 2008.

-

In the first of Shorenstein APARC's five sessions of 2007-08 Corporate Affiliate Visiting Fellows research paper presentations, Mr. Venkatesh Subramaniam will discuss specifically  biopharmaceuticals - its global performance and the U.S. market scenario.

Philippines Conference Room

Venkatesh Subramaniam Corporate Affiliate Visiting Fellow, Reliance Industries Speaker
Seminars
Authors
David G. Victor
News Type
Commentary
Date
Paragraphs
David G. Victor is a professor at Stanford Law School and directs the Freeman Spogli Institute's Program on Energy & Sustainable Development; he is also adjunct senior fellow at the Council on Foreign Relations.

What to do about Mexico's oil company, Pemex, may seem like a parochial issue of interest only to Mexicans and a few oil industry executives. But the matter should be of concern to anybody who is wondering when oil will come down off its near-record highs.

Pemex generates two fifth's of the Mexican government's income and is a lucrative employer, but it is ailing from neglect. For years the government has milked Pemex of cash without giving it the wherewithal to invest in and develop new sources of oil. When President Felipe Calderon proposed last week to reform Pemex and encourage more private investment in oil exploration and refining, his leftist opponents shut down the country's legislature in protest. Pemex, they claimed, is a cherished national treasure that must not be pushed into private hands.

Mexico is hardly the only country that treats its state oil companies as ATMs for governments, unions, cronies and others who siphon the rich benefits for themselves. A large fraction of the world's oil patch is struggling with the problem that bedevils Calderon: how to make state-owned oil companies (which control about three quarters of the world's oil reserves) more effective at finding and producing oil. Veneuzuela's oil output is flagging. Russia's state-owned gas company, Gazprom, is on the edge of a steep decline in production. And in different ways many of the world's state-owned oil companies are struggling to keep pace with rising demand. Simply privatizing them is politically difficult, and thus most of the world's oil-rich governments are struggling to find ways to make state enterprises perform better.

Even among state oil companies, Pemex's performance is notably poor. Used as a cash cow for the government, Pemex has never been able to keep enough of its profits to invest in exploration and better technology, the lifeblood of the best oil companies. Until a few years ago, Pemex invested essentially nothing in looking for new oil fields. It relied, instead, on the aging Cantarell field, which was discovered in the 1970s not by Pemex but by fisherman who were angry that the seeping oil was fouling their nets and assumed that Pemex was to blame. Pemex brought the massive field online with relatively simple technology. A scheme in the late 1990s extended the life of the field, but that effort has run out of steam. On the back of Cantarell's decline, total output from Pemex is sliding; some even worry that Mexico could become a net importer of oil in the next decade or two. They're probably wrong, but even the idea makes people nervous.

At times over the last few decades (including today) Pemex has been blessed with a dream team of smart managers, but even they have not been able to reverse the tide of red ink. That's because the company's troubles run so deep that even the best management can't fix them. Indeed, the most striking thing about Calderon's proposed reforms is that they don't go nearly far enough to make Pemex a responsive company, even though they are on the outer edge of what's probably politically feasible in Mexico.

For example, Calderon proposes a new system of "citizen bonds" that will help bring capital to the company (and because they would be owned by the public, these bonds would help blunt the legal block to any reform—Mexico's Constitution requires that its hydrocarbons be owned by the people). Money alone, though, won't reverse Pemex's fortunes. Part of the problem is that risk taking, which is essential to success in oil, is strongly discouraged. My colleagues at Stanford, in a study released last week, have shown that a system of tough laws that control procurement make managers wary of projects that could fail. Although such laws are designed to help stamp out corruption, a noble goal, they are administered by parts of the Mexican government that know little about the risky nature of the oil business.

Pemex's ability to control its own investment capital is probably more important to its success than anything else. The firm, though, has been hobbled because the government keeps all profits for use in the federal budget and the finance ministry has the final word on all Pemex investments. Solving that problem would require distancing government from the oil company. Given that the government is dependent on Pemex cash, that is politically risky. In fact, the real foundation for Calderon's reforms announced last week actually happened long ago when he first took office and spearheaded an effort to change Mexico's tax system. Much of the Mexican economy doesn't pay taxes to the government, which explains why its need for cash from Pemex is particularly desperate. Those tax reforms, however, are too modest to make a fundamental difference in the government's dependence on Pemex.

Calderon's reforms seem unlikely to solve the politically hardest task: reigning in the Pemex workers' union, which favors projects that generate jobs and benefits for its members. The union is well-connected to Mexico's left-leaning political parties, which helps explain why those same parties are so wary of "privatization." In fact, Calderon's proposals would not privatize the companies, but the union and the left know that cry will rally the people to prevent change.

Elsewhere in the world a thicket of similar, interlocking problems loom over the oil patch. Kuwait has a procurement system much like Mexico's, with a similarly perverse effect on the incentives for workers in that country's oil company to take risks and perform at world standard. Even in Brazil, whose state oil company is one of the best performing, has a hard time keeping the government at bay when it comes to taxing oil output. Two massive new oil finds over the last six months have kindled discussions in Brazil about raising the tax rate and channeling ever more of the oil output for government purposes. In Venezuela, where Chavez has taken a good oil company and run it into the ground, the burden of public projects is so great that the oil company can no longer focus on actually producing oil efficiently, and production is in decline.

The odds are that Calderon will make some reforms but won't transform Pemex. And that outcome, multiplied through state-owned oil companies around the world, suggests that oil output will increase only sluggishly. With demand still strong, oil prices are set to stay high for some time.

All News button
1
-

The demographic billionaires China and India are experiencing rapid population changes and social shifts, fast economic growth, poverty decline, a booming modern business sector, and rising human capital in the labor force age groups.  Because 37% of the entire world population lives in these two countries, the breathtaking transformations in India and China are causing major dislocations in the global economy and big changes in measures of world development.  This colloquium will highlight the most important demographic, social, and economic trends happening in China and India today, will compare and contrast the current situations and future prospects of these two powerhouses, and will focus on implications for Asia and the world today and in the coming decade.

Dr. Judith Banister is the director of Global Demographics for The Conference Board, the world’s premier business research and business membership organization, with offices in New York, Brussels, Beijing, Hong Kong, and New Delhi.  She is an expert on the demography of China and received her Ph.D. in demography and development from Stanford.

Philippines Conference Room

Judith Banister Director of Global Demographics Speaker The Conference Board
Seminars
Authors
News Type
Commentary
Date
Paragraphs
Shorenstein APARC Distinguished Fellow Michael H. Armacost discusses U.S.-South Korea ties and points out challenges ahead. "From free trade to North Korea's nuclear threat," writes Armacost in the Christian Science Monitor, "both sides must move past years of missteps."

Stanford, Calif. - The visit this week of South Korea's new president, Lee Myung Bak, offers a rare opportunity to put the American-Korean relationship back on a more solid footing. President Lee, who won a decisive victory in last December's election, has expressed views on the security alliance, a bilateral free trade agreement, and policy toward North Korea that are thoroughly compatible with US interests. And Mr. Lee's authority was bolstered by his party's substantial victory in legislative elections April 9.

The question is whether Washington is poised to take advantage of this convergence of views.

For the past eight years, a major perception gap between Seoul and Washington has been painfully evident. Our governments often worked at cross-purposes in the six-party talks to denuclearize North Korea. Progressive governments in South Korea encouraged peaceful coexistence with the North through a pattern of unreciprocated engagement. For much of that time, the Bush administration sought to isolate and pressure Pyongyang into relinquishing its nuclear ambitions, and it made little effort to conceal its hopes for a regime change in Pyongyang.

When Washington decided to move its military headquarters out of Seoul in 2003, many Korean officials suspected that the Americans were just eager to get troops out of North Korean artillery range. President Roh Moo Hyun at times seemed interested in carving out a role as a balance wheel between the major powers in Northeast Asia. Meanwhile, the US was preoccupied by problems in the Middle East, and some American officials wondered if the US-Republic of Korea (ROK) alliance could long survive when one party dismissed the North Korean threat while the other viewed it as increasingly menacing.

Now comes Lee, a former mayor of Seoul and Hyundai construction executive with a reputation for tough-minded, pragmatic conservatism, eager to correct what he described as the misguided priorities of past ROK administrations. In a recent meeting with New Beginnings, a group of American policy experts on Korea, Lee appeared determined to accord priority to the alliance with the United States, exact a measure of reciprocity from the North, forestall major economic concessions to the North until it abandons its nuclear activities, and design a more ambitious global role for his country.

Surely Washington welcomes Lee's priorities. The tougher question is whether it can work effectively with him to translate shared aims into concrete results. This will pose three particular challenges.

First, on the nuclear issue, undeniably, bilateral talks with Pyongyang can facilitate diplomatic progress. There are dangers as well. Disconnects with the Japanese have deepened, and their officials occasionally complain about American "betrayals" in the discussions with Pyongyang. The North has consistently sought to use the negotiations to split the US and its allies. Success in the talks requires coordinated diplomacy between the US and the North's neighbors – especially with South Korea. In the past it often appeared that South Korean presidents worried less about Pyongyang's nuclear activities than Washington's possible reactions to them.

Today, there is the danger that South Korean conservatives may fear that Washington will ultimately acquiesce in North Korea's nascent nuclear status. No attempt to contain, let alone eliminate, the North Korean nuclear program can succeed unless the US and ROK governments work closely together. This will require a higher standard of candor and mutual trust in bilateral consultations than has been typical in recent years.

Second, the ratification of the Korea-US free-trade agreement (FTA) is a vital piece of unfinished business. Lee appears prepared to resume imports of US beef (halted due to mad cow disease concerns), essential to moving the FTA forward in Congress. Unfortunately, the Democratic presidential contenders are pandering to special interests on trade issues in a way they will probably later regret. Both sides have strategic and commercial interests at stake. The US stands to gain much more in increased exports from the FTA, while the Koreans hope that liberalizing foreign access to their economy will make them more competitive. So there is much to gain by nailing down this deal. A failure to complete it would be a significant strategic setback for our partnership.

Third, there is the question as to whether our political cycles will again diverge. For the past eight years, the US has been led by one of its most conservative administrations, while South Korea was headed by its most liberal president. Missteps were, perhaps, inevitable. And they have persisted, even though some effective work was done behind the scenes to forge cooperative arrangements on trade and force-deployment issues.

Lee's election signifies a conservative swing in South Korea's politics, while polls suggest the US may be moving in the opposite direction. Thus, a felicitous convergence of US and ROK official perspectives could prove fleeting. Yet the interests we share in expanded commerce, in modernizing our alliance, and in approaching the North with a joint strategy for "denuclearization" are compelling. They transcend partisan politics. They serve our respective national interests. The time to capitalize on them is now.

All News button
1
-

Adoption of European law was a central part of the accession process of new member states of the EU but turned out to be much more difficult than implementation of European Law in the old member states. Problems included not only the amount of European legislation, its dynamic nature and language problems. Literal implementation resulted in diminishing the coherence of national legal rules and structures. In addition, legislation did not take account of national specifics and differences in legal culture. Built-up of working institutions and procedures takes time and efforts and deficiencies add to hampering implementation and application of European law.

Many problems of new member states in the accession process are present in the old member states as well. They may lead to a review of the European legislative process and structural reforms. The pace of legislation should slow down, it should be more reflexive and “re-connect” to the national and local level. Care should also be taken by national legislators in better integrating European law into national law. Structural reform would include strengthening of democratic institutions on a European level including the European court system. This should be accompanied by practical cooperation and mutual exchange.

Prof. Dr. Wiebe studied law at the University of Hannover, Germany, and at the University of Virginia (U.S.A.) where he received the LL.M. degree in 1988. In 2001 he completed his habilitation. Since Sept. 2002 he is a professor on the newly established Chair for Information Law and Intellectual Property Law at the Vienna University of Economics and Business Administration (www.infolaw.at). Prof. Dr. Wiebe is a member of various academic associations and Vice President of the German Computer Law Association (DGRI e.V.).

Stanford Law School
Room 182

Vienna University of Economics and Business Administration
Department of Information Technology Law and Intellectual Property Law
Althanstrasse 39-45
1090 Wien

0
Distinguished Visiting Austrian Chair Professor, 2007-2008
Visiting Professor, Stanford Law School
Head of the Deparment of Information Technology and Intellectual Property Law, Vienna University of Economics and Business Administration
wiebe.png

Andreas Wiebe, LL.M., is Head of the Deparment of Information Technology and Intellectual Property Law at the Vienna University of Economics and Business Administration. From January through June 2008, Professor Wiebe served as Distinguished Visiting Austrian Chair Professor at the Forum on Contemporary Europe, during which time he taught courses in e-commerce law and intellectual property law at the Stanford Law School. Professor Wiebe co-organized the June 14 "Transatlantic Information Law Symposium," held at the Stanford Law School and presented by the Transatlantic Technology Law Forum and the Freeman Spogli Institute for International Studies.

Andreas Wiebe Chair for Information Law and Intellectual Property Law Speaker Vienna University of Economics and Business Administration
Seminars
Subscribe to Business