Friday, March 20, 2009

Strategic partnership signed to advance water utilities in the Middle East and Africa

Strategic partnership signed to advance water utilities in the Middle East and Africa
USAID, March 20, 2009

ISTANBUL, TURKEY - The U.S. Agency for International Development (USAID) and the International Water Association (IWA) signed an agreement today at the Fifth World Water Forum to work together to increase access to clean drinking water and sanitation throughout the Middle East and Africa by strengthening water utilities and their regional associations. This partnership focuses specifically on access to clean drinking water and sanitation for the urban poor, water safety and quality management, leadership gaps and climate change.

Countries in the Middle East and North Africa are facing a water crisis. In this arid region, supplies of renewable water are limited while demand is rapidly rising due to population growth, agricultural use, and increasing industrialization and urbanization. Daily per capita water consumption is low throughout the region, and the cost of supplying water continues to increase. In response, pressures on water operators to improve their efficiencies and capacities are growing.

By synchronizing program planning and leveraging financial and non-financial resources, USAID and IWA will work to strengthen water utilities and their regional associations, such as the Arab Countries Water Utility Association (ACWUA) and African Water Association (AfWA).
USAID and IWA will address this common objective by:
  • Supporting and strengthening regional water utility associations by providing information and expertise on business planning and programs and services;
  • Brokering and facilitating global or regional Water Operator Partnerships, e.g. partnerships between mentor and recipient water operators;
  • Working together to create a regional Future Water Leaders program; and
  • Collaborating on and disseminating pertinent information such as reports, analyses, and resources.
To launch this strategic partnership, IWA and USAID are working closely with ACWUA to build and strengthen ACWUA's role and impact for its utility members. IWA can provide resources and experts to build knowledge and capacity where needed within the association and individual utilities. USAID is providing strategic and expert resources to assist ACWUA in expanding its business plan for sustainability, supporting its knowledge management and communications strategy as well as facilitating the technical working groups on poverty orientation and utility management.

USAID and IWA will promote leadership strengthening for mid-level water and wastewater management professionals to build up the water and sanitation sector. USAID is promoting Middle East leadership in the sector by bringing twenty-five future leaders from nine Middle Eastern countries together to discuss issues that they will face as leaders in ten years time. IWA has a Young Professionals group and mentorship program that offers support and guidance. Both parties will collaborate on curriculum design and creating linkages among young professionals across countries and regions, as well as connections to senior mentors in order to build leadership capacity and networks in support of Future Water Leader career development.

U.S. Contributes More Than $150 Million to Help Displaced Iraqis

U.S. Contributes More Than $150 Million to Help Displaced Iraqis
US State Dept, Bureau of Public Affairs, Office of the Spokesman
Washington, DC, March 20, 2009

The United States is pleased to announce new FY 2009 contributions of more than $141 million to help Iraqis who remain displaced as a result of the war. These contributions come in addition to the $9 million that the United States committed earlier this fiscal year, to total $150 million thus far in FY 2009. These contributions show an ongoing U.S. focus on the needs of this vulnerable population, a focus that continues even as the security conditions inside Iraq improve, making returns of the displaced persons a more viable option in some areas. Between October 1, 2006 and September 30, 2008 (FY 2007 and FY 2008), the United States provided approximately $570 million to support humanitarian assistance for Iraqis.

This year’s funding has supported the 2009 United Nations Consolidated Appeal for Iraq and the region, and key international non-governmental organizations. The Appeal for $547 million will support relief efforts by the United Nations High Commissioner for Refugees (UNHCR), the United Nations Children’s Fund (UNICEF), the World Health Organization (WHO), the World Food Program (WFP) and others. The United States calls on other donors to respond to the United Nations Appeal with substantial contributions of their own.

Through these organizations, U.S. funding will support a range of services for displaced Iraqis and conflict victims, including:
  • continued provision of emergency relief supplies to the most vulnerable Iraqis;
  • rehabilitation of water systems for internally displaced persons and local communities in Iraq;
  • informal education activities for Iraqi students unable to attend public schools in Jordan and Syria;
  • school reconstruction to support the influx of Iraqi students into Syrian public schools;
  • mental health services for displaced Iraqis;repairs to clinics in Iraq, including donation of medical equipment; and
  • mobile health units for Iraqi refugees in Jordan and Syria.

WaPo: Congress's destructive reaction to the AIG bonuses

Washington Gone Wild
Congress's destructive reaction to the AIG bonuses
WaPo, Friday, March 20, 2009; page A18

"SHORTSIGHTED," "opportunistic" and "irresponsible" aptly describe the actions of those who fueled the debacle on Wall Street. They are also apt descriptors for lawmakers more focused on currying favor with a public outraged at the bonuses handed out by bailed-out companies than on fixing the fundamental and still potentially disastrous cracks in the financial system. By changing the terms of a deal months after it was entered into, Congress will show the government to be an unreliable partner, further draining confidence from the financial system and endangering long-term recovery.

Yesterday, the House had the feel of a mob scene, with lawmaker after furious lawmaker vying for floor time to rail against the $165 million in taxpayer-funded bonuses lavished on employees of American International Group's disgraced Financial Products division. House members rushed through a bill to impose an effective tax rate of 90 percent on bonuses paid to AIG employees and employees of other firms that accepted at least $5 billion from the Troubled Assets Relief Program -- though when then-Treasury Secretary Henry M. Paulson Jr. pressed many of those firms to take the funds last fall, government interference in their compensation systems was not part of the deal. The legislation, approved by a vote of 328 to 93, would affect employees who received bonuses on or after Jan. 1 and whose household incomes exceed $250,000. Late yesterday afternoon, lawmakers on the Senate Finance Committee introduced their own, broader version of the bonus clawback that would affect firms that accepted as little as $100 million of government funds.

We understand that legislators are hearing from furious constituents, and we understand why those voters are angry. It is unquestionably galling that some of the employees who crafted and pushed risky derivatives that wreaked financial havoc worldwide should line their pockets with some of the $173 billion in public funds meant to prop up the too-big-to-fail insurance behemoth and its global business partners. The bonus anger resonates, too, because of a larger sense many voters have that the people who helped trigger this whole economic mess are not the people paying the greatest price.

But elected officials have a responsibility to lead, not just to pander; to weigh what makes sense for the country, not just what feels good. The effective confiscation of legally earned and contractually promised payments may well be unconstitutional. It is almost certain to be unhelpful. The bonuses paid at AIG represent less than one-tenth of 1 percent of the bailout provided so far; recouping those funds will have no discernible fiscal effect. But it will help drive away the best talent at the firm, and despite all the glib messages of "good riddance," that is a strange action for an owner -- and the American public now owns AIG -- to take. But the real damage goes well beyond any effect on AIG. The economy continues to suffer from a shortage of credit. The government needs financial institutions -- including relatively healthy ones -- to take public funds that will then be lent to responsible businesses and consumers. The Obama administration reportedly intends in the next week or two to announce the details of a "private-public partnership" to buy troubled assets from ailing banks. The participation of private hedge funds, investment banks and other firms will be key to the plan's success. But what executive in his right mind will enter into a deal if he or she believes the rules can be changed six months or one year down the road purely on the basis of polls and politicians' fears?

Rather than bringing reason to the debate, President Obama has stoked the anger, and last night, the White House commented favorably on the House action. Perhaps Mr. Obama believes that only by lining up with an angry public now can he persuade it, and Congress, to approve the hundreds of billions more he will need to right the credit system. But he might have expressed his sympathy with public anger over irresponsible behavior in the financial sector while also steering the government in a more constructive direction. The absence of backbone on either end of Pennsylvania Avenue this week could carry a steep price.

Does Geithner Get It? The Era of Excess is over

Does Geithner Get It? By Eugene Robinson
WaPo, Friday, March 20, 2009; page A19

President Obama's claim that Timothy Geithner faces a more daunting set of challenges than any Treasury secretary since Alexander Hamilton may be an exaggeration, but not by much. Geithner may indeed be the hardest-working man in Washington. But to survive, let alone succeed, he's going to have to make a more convincing case that he's part of the solution and not part of the problem.

The case of the appalling AIG bonuses -- I was going to call them outrageous, but politicians and pundits have exhausted the nation's supply of outrage since the payments were revealed -- is the latest situation to raise the inconvenient problem-vs.-solution question about Geithner. Why didn't he know about the bonuses earlier? And when he did get clued in, why didn't he do anything to head off what was obviously going to be a distracting and perhaps damaging controversy?

A simpler way of asking the Geithner question is: Does he get it?

Does he understand the profound sense of betrayal that so many Americans feel as we learn that the supposed wizards of finance, the Masters of the Universe who shower themselves with unimaginable wealth, were safeguarding our economic well-being with the diligence and sobriety of a drunken high roller at a craps table in Vegas at 4 a.m.? Does he understand that the crisis is not just an economic watershed but a cultural one as well, and that what once was deemed perfectly acceptable behavior on Wall Street is now seen as reprehensible? Does he understand that outside of Lower Manhattan, the definition of a "retention bonus" is being spared from the latest round of layoffs?

Geithner's troubles began shortly after he was nominated, when it was disclosed that he had failed to pay $34,000 in federal taxes between 2001 and 2004. It's reasonable to expect the secretary of the Treasury to have a record of faithfully paying his own taxes, and Geithner's excuse -- that he had used the computer software TurboTax to prepare his returns -- didn't sound likely to erase the scowl from an IRS auditor's face. But Obama pushed hard for the nomination and the Senate went along, largely because Geithner was president of the Federal Reserve Bank of New York and had been deeply involved from the beginning in the effort to contain the financial meltdown. He was one of the few people who truly understood how and why things were falling apart.

One thing Geithner doesn't seem to understand, though, is how and why appearances matter. There has been a steady flow of news indicating that Wall Street doesn't realize that the Era of Excess is over, the latest coming yesterday with a Bloomberg News report that the CEO of troubled Citigroup, Vikram Pandit, plans to spend about $10 million redecorating the firm's executive offices. I know that the company has made economies and that Pandit is working for $1 a year. I just think that after accepting $45 billion in bailout money, I'd cancel any improvement project that couldn't be accomplished with a trip to Home Depot.

Obama's job would be much easier if Geithner were more effective at communicating with the public about what happened to the economy and what the administration is doing to fix it. As things stand, Obama has to do all the explaining himself. Perhaps it's unrealistic to expect Geithner to be both a financial whiz and a silver-tongued orator. He does speak the language of Wall Street, though, and one of the nonnegotiable requirements in his job description should be to make the men and women who run our financial institutions understand that their behavior has to change.

The basic strategy for handling the crisis, begun under the Bush administration and continued by Obama, is to hook up a fire hose to the Treasury and shower irresponsible and greedy financial institutions with money until the fire is put out. In political terms, to put it mildly, this is a hard sell. It becomes an impossible sell when Wall Street displays not gratitude but arrogance, reminding us how emotionally satisfying it would be -- if ultimately counterproductive and even disastrous -- to stand back and let the fire burn.

The vast amount of money poured into Wall Street has bought American taxpayers the right to say that business-as-usual practices such as the AIG bonuses are over. Geithner needs to deliver this message. If he can't or won't, Obama should find somebody who can and will.

White House Official Boosts Cap and Trade Revenue Estimate

White House Official Boosts Cap and Trade Revenue Estimate. By Corey Boles and Martin Vaughan
Mar 18, 2009

WASHINGTON -- A top White House economic adviser told Senate staff a proposed cap and trade system could raise "two-to-three times" the administration's existing $646 billion revenue estimate, according to five people at the meeting.

This could mean the cap and trade system could actually generate between roughly $1.3 trillion and $1.9 trillion between fiscal years 2012 and 2019.

Jason Furman, deputy director of the National Economic Council, offered the estimate at a Feb. 26 meeting on Capitol Hill with a bipartisan group of staffers, most of whom are attached to the Senate Finance Committee, according to five Senate aides who attended the meeting. They spoke on condition they wouldn't be identified by name.

The meeting was held in the Finance Committee's hearing room in the Dirksen Office Building, the day the administration released its budget framework. According to those who were present, there were between 50 and 60 staff of both parties, including some staff of House lawmakers.

A White House official wouldn't confirm Mr. Furman's comments, but said excess revenues from any cap and trade bill that passes Congress will be used to compensate vulnerable families, communities and businesses.

The administration has said the proposal could raise more revenue than its current estimate, but hasn't specified how much more.

In its budget, the administration said it expects a cap and trade system would raise $645.7 billion in the eight years to fiscal year 2019.

The cap and trade proposal is aimed at lowering carbon emissions into the atmosphere by companies by requiring them to purchase credits for the level of pollution they contribute.

Mr. Furman told the Senate meeting the administration expected to generate considerably more than that estimate. According to those present, he was initially reluctant to quantify how much more in revenues the cap and trade system could generate.

Only after being pushed to do so, did Mr. Furman provide a revised range, these people said.

The public forecast was based on the carbon-dioxide credits that would be issued through the new system being priced at $20 each. Each credit allows for one ton of carbon dioxide to be emitted.

According to the budget, the administration would use $120 billion of the scheme's revenues to fund clean energy technology. The balance of $525.7 billion would pay for a tax cut targeted to middle class Americans, a centerpiece of the Obama budget.

The Obama administration has said its Making Work Pay tax credit will compensate most working Americans for the likely rise in utility costs they could expect to face after a cap and trade system goes into place. That tax credit is worth $800 per year to a household of two earners with combined annual income below $250,000.

A 2007 study from the Massachusetts Institute of Technology found various cap-and-trade scenarios would raise between $130 billion and $370 billion per year by 2015.

One of the largest targets of cap and trade will be utility companies - especially those that burn coal and are among the worst polluters. It is widely seen that these companies would pass increased costs they incur on to their customers.

A footnote in the budget framework released by the administration in February stated that "all additional net proceeds will be used to further compensate the public."

This would imply the administration intends to increase support for people facing higher costs as a result of the cap and trade scheme.

Last week, Sen. Ron Wyden (D., Ore.), a member of the finance committee, said he had been informed by a White House official that the administration planned to do more to provide financial assistance to low-income households that would be most adversely impacted by higher utility costs.

Sen. Wyden said details of how this assistance would be structured were still being worked out.