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Editor’s note: ‘Funmi Olonisakin is the founding director of the African Leadership Centre, and director of the Conflict, Security and Development Group, at King’s College London.

(CNN) — President Goodluck Jonathan’s response to the Boko Haram insurgency, including his recently declared state of emergency in three northern Nigerian states, is eerily reminiscent of previous approaches to sectarian violence in that region.

The Maitatsine uprising of 1980 is perhaps the single most important precedent-setting example. In December 1980, the confrontation between the Al-Masifu Islamic sect — which advocated purity in the practice of Islam — and the people of Kano came to a head. The Nigerian army and air force mounted a campaign against the sect. In the end, more than 4,000 people were dead with double this number injured alongside massive destruction of property.

Times have certainly changed. Nigeria’s population has doubled since the Maitatsine uprising. Nigeria continues to experience the “youth bulge” — a growing youth population — that was not planned for. The resulting pressure on socio-economic systems is evident in limited education and health and dwindling economic opportunities for young people.

Poor policies and bad planning have produced youth vulnerability and exclusion from mainstream life. This is doubly so in northern Nigeria, where class divides have further created a community of people with nothing to lose.

Read this: Nigerians ask, are we at war?

The global environment has also changed amid growing transnational threats. Al Qaeda continues to lurk in the neighborhood. Excluded groups in the region with affinity for Boko Haram are potential support networks amid an ever-rising flow of illicit weapons into the region.

One thing has hardly changed: elite behavior. Nigeria’s power elite remains far removed from the realities of life experienced by ordinary citizens.

2012: Who are Boko Haram?

Empowering Nigerian youth

Gadhafi’s end unleashes flood of weapons

The ruling elite’s framing of the Boko Haram challenge lends itself easily to just one set of responses — the use of force to rout Boko Haram, although more recently the federal government of Nigeria proposed an amnesty for Boko Haram.

To be certain, a military approach is only part of the solution. It is by no means a panacea. This military campaign, coupled with amnesty, rings hollow. It does not offer much hope for dealing comprehensively with the underlying causes of the Boko Haram phenomenon.

It is no wonder Boko Haram has treated the offer of amnesty by the Jonathan-led government with disdain. For one, it may be worth holding out for a greater prize, knowing that it probably has this regime by the jugular. Besides, how could it trust that the offer of amnesty — which will unveil Boko Haram — is not a ploy by the regime to round them up and execute them? The allegedly extra-judicial killing of the sect’s late leader, Mohammed Yusuf, serves as a constant warning.

Watch this: Who are Boko Haram?

Perhaps more importantly, this military solution and current state of emergency is potentially damaging for the military. The Nigerian military only recently managed to repair its image, winning accolades abroad for its peacekeeping role. Asking it to employ maximum force in internal operations — causing casualties in the process among the very people it is meant to protect — has repercussions. Surely, this will diminish its stature abroad and reduce citizens’ confidence in the military at home, while drawing more support to Boko Haram and weakening troops’ morale.

That said, it is also the case that Nigerians far removed from the locus of the crisis may not see the military’s role in such negative terms.

This crisis will potentially deepen religious and regional cleavages. Perhaps the country’s saving grace is that for the time being, Nigeria’s youth population mostly buys into these divides. They do not yet have a common narrative about who their “real enemy” is. Barring a small number of states, where genuine effort is being made to confront serious governance deficits, the picture of elite marginalization and widening inequality is consistent countrywide.

Spreading the wealth in Nigeria

Workers abducted in northern Nigeria

Boko Haram commands the loyalty of the excluded at several levels. At this moment, Boko Haram is obviously asserting influence, and that assertion of influence is accepted by a significant number of people who see no change in their primary condition.

This factor partly attracted large crowds to the preaching of Boko Haram’s late leader, Yusuf. His narratives about the ills of Western education were enriched by evident gaps in governance. The breakdown of the education system, growing youth unemployment and insecurity amid rampant corruption swelled the ranks of Boko Haram. When the sense of “nothing to lose” is mixed with these strong narratives, the issue is not whether or not they are true but that there are no strong counter-narratives or genuine counter actions.

A lasting solution to the crisis in northern Nigeria might lie in a missing trinity: a meaningful but powerful narrative to counter Boko Haram’s narrative; an action plan akin to a “Marshal Plan” for northern Nigeria; and isolation of what Jonathan has described as Boko Haram sympathizers in the government and security forces.

Developing a powerful counter narrative will demand a measure of sincerity and consistency among the country’s ruling elite. Such a narrative must stand up to the seeming lure of Boko Haram and have the ability to hold a young population captive for the foreseeable future.

An action plan akin to a Marshal Plan for northern Nigeria must be developed to suit the context. The federal government’s investment in regeneration of northern Nigeria, with a focus on youth sensitization, education and development of social and economic entrepreneurship, will be key. This might entail deliberate forms of youth cantonment, census-based planning, community-based programs, and innovative education schemes to kick start regeneration.

To be sure, an action plan for northern Nigeria will not be sustainable in an environment where youth exclusion is a countrywide problem even if it is more chronic in the north. Expressed intention to do this nationally in due course might persuade a captive youth audience.

The question remains as to whether alleged Boko Haram sympathizers among the elite can be dislodged from this process. This might be the single most important obstacle in a situation where retaining political power in 2015 seems more valuable to the regime than the welfare of a few million disposable citizens.

In the immediate term, we can expect the Nigerian military to record successes against the Boko Haram sect. But the victory will be hollow. Without the trinity of measures earlier described, Jonathan’s government risks sacrificing the ordinary people of northern Nigeria, the military’s reputation, and innocent bloodshed.

The opinions expressed in this commentary are solely those of ‘Funmi Olonisakin.

Article source: http://edition.cnn.com/2013/05/24/opinion/nigeria-boko-haram-funmi-olonisakin/index.html?eref=edition

Editor’s note: ‘Funmi Olonisakin is the founding director of the African Leadership Centre, and director of the Conflict, Security and Development Group, at King’s College London.

(CNN) — President Goodluck Jonathan’s response to the Boko Haram insurgency, including his recently declared state of emergency in three northern Nigerian states, is eerily reminiscent of previous approaches to sectarian violence in that region.

The Maitatsine uprising of 1980 is perhaps the single most important precedent-setting example. In December 1980, the confrontation between the Al-Masifu Islamic sect — which advocated purity in the practice of Islam — and the people of Kano came to a head. The Nigerian army and air force mounted a campaign against the sect. In the end, more than 4,000 people were dead with double this number injured alongside massive destruction of property.

Times have certainly changed. Nigeria’s population has doubled since the Maitatsine uprising. Nigeria continues to experience the “youth bulge” — a growing youth population — that was not planned for. The resulting pressure on socio-economic systems is evident in limited education and health and dwindling economic opportunities for young people.

Poor policies and bad planning have produced youth vulnerability and exclusion from mainstream life. This is doubly so in northern Nigeria, where class divides have further created a community of people with nothing to lose.

Read this: Nigerians ask, are we at war?

The global environment has also changed amid growing transnational threats. Al Qaeda continues to lurk in the neighborhood. Excluded groups in the region with affinity for Boko Haram are potential support networks amid an ever-rising flow of illicit weapons into the region.

One thing has hardly changed: elite behavior. Nigeria’s power elite remains far removed from the realities of life experienced by ordinary citizens.

2012: Who are Boko Haram?

Empowering Nigerian youth

Gadhafi’s end unleashes flood of weapons

The ruling elite’s framing of the Boko Haram challenge lends itself easily to just one set of responses — the use of force to rout Boko Haram, although more recently the federal government of Nigeria proposed an amnesty for Boko Haram.

To be certain, a military approach is only part of the solution. It is by no means a panacea. This military campaign, coupled with amnesty, rings hollow. It does not offer much hope for dealing comprehensively with the underlying causes of the Boko Haram phenomenon.

It is no wonder Boko Haram has treated the offer of amnesty by the Jonathan-led government with disdain. For one, it may be worth holding out for a greater prize, knowing that it probably has this regime by the jugular. Besides, how could it trust that the offer of amnesty — which will unveil Boko Haram — is not a ploy by the regime to round them up and execute them? The allegedly extra-judicial killing of the sect’s late leader, Mohammed Yusuf, serves as a constant warning.

Watch this: Who are Boko Haram?

Perhaps more importantly, this military solution and current state of emergency is potentially damaging for the military. The Nigerian military only recently managed to repair its image, winning accolades abroad for its peacekeeping role. Asking it to employ maximum force in internal operations — causing casualties in the process among the very people it is meant to protect — has repercussions. Surely, this will diminish its stature abroad and reduce citizens’ confidence in the military at home, while drawing more support to Boko Haram and weakening troops’ morale.

That said, it is also the case that Nigerians far removed from the locus of the crisis may not see the military’s role in such negative terms.

This crisis will potentially deepen religious and regional cleavages. Perhaps the country’s saving grace is that for the time being, Nigeria’s youth population mostly buys into these divides. They do not yet have a common narrative about who their “real enemy” is. Barring a small number of states, where genuine effort is being made to confront serious governance deficits, the picture of elite marginalization and widening inequality is consistent countrywide.

Spreading the wealth in Nigeria

Workers abducted in northern Nigeria

Boko Haram commands the loyalty of the excluded at several levels. At this moment, Boko Haram is obviously asserting influence, and that assertion of influence is accepted by a significant number of people who see no change in their primary condition.

This factor partly attracted large crowds to the preaching of Boko Haram’s late leader, Yusuf. His narratives about the ills of Western education were enriched by evident gaps in governance. The breakdown of the education system, growing youth unemployment and insecurity amid rampant corruption swelled the ranks of Boko Haram. When the sense of “nothing to lose” is mixed with these strong narratives, the issue is not whether or not they are true but that there are no strong counter-narratives or genuine counter actions.

A lasting solution to the crisis in northern Nigeria might lie in a missing trinity: a meaningful but powerful narrative to counter Boko Haram’s narrative; an action plan akin to a “Marshal Plan” for northern Nigeria; and isolation of what Jonathan has described as Boko Haram sympathizers in the government and security forces.

Developing a powerful counter narrative will demand a measure of sincerity and consistency among the country’s ruling elite. Such a narrative must stand up to the seeming lure of Boko Haram and have the ability to hold a young population captive for the foreseeable future.

An action plan akin to a Marshal Plan for northern Nigeria must be developed to suit the context. The federal government’s investment in regeneration of northern Nigeria, with a focus on youth sensitization, education and development of social and economic entrepreneurship, will be key. This might entail deliberate forms of youth cantonment, census-based planning, community-based programs, and innovative education schemes to kick start regeneration.

To be sure, an action plan for northern Nigeria will not be sustainable in an environment where youth exclusion is a countrywide problem even if it is more chronic in the north. Expressed intention to do this nationally in due course might persuade a captive youth audience.

The question remains as to whether alleged Boko Haram sympathizers among the elite can be dislodged from this process. This might be the single most important obstacle in a situation where retaining political power in 2015 seems more valuable to the regime than the welfare of a few million disposable citizens.

In the immediate term, we can expect the Nigerian military to record successes against the Boko Haram sect. But the victory will be hollow. Without the trinity of measures earlier described, Jonathan’s government risks sacrificing the ordinary people of northern Nigeria, the military’s reputation, and innocent bloodshed.

The opinions expressed in this commentary are solely those of ‘Funmi Olonisakin.

Article source: http://edition.cnn.com/2013/05/24/opinion/nigeria-boko-haram-funmi-olonisakin/index.html?eref=edition

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Article source: http://rss.cnn.com/~r/rss/edition_connecttheworld/~3/d3BOYr31O7Q/

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Follow @BeckyCNN

Article source: http://rss.cnn.com/~r/rss/edition_connecttheworld/~3/d3BOYr31O7Q/

(CNN) — In the battle against cancer, one video game is taking the deadly disease head-on. And some young patients are the winners.

“Re-Mission 2″ is a collection of online minigames designed to get teen and young-adult cancer patients involved in understanding more about their conditions and how the body benefits from sometimes unpleasant treatments.

Researchers at HopeLab, a nonprofit organization searching for products that positively impact health behavior, were emboldened by the success of their original 2006 title, “Re-Mission,” and were looking for a better way to help patients.

“Research on the original ‘Re-Mission’ showed that it impacted biology and behavior, primarily by energizing positive motivation circuits in the human brain and giving players a sense of power and control over cancer,” said Dr. Steve Cole, a vice president at HopeLab and professor of medicine at UCLA. “That gave us a whole new recipe for engineering the games in ‘Re-Mission 2′ by harnessing the power of positive motivation circuits in the human brain.”

The Flash-based games in “Re-Mission 2″ mimic what the patients are going through in their therapy, but in a way that gamifies the treatment and involves the patient in “destroying” their cancer.

Weapons in the game include chemotherapy, cancer drugs and cells in the body’s own immune system.

A 2008 study into the effectiveness of the “ReMission” idea found that, for patients from 13 to 29, sticking to a treatment regimen when managing chronic illness was a significant problem. Playing the game greatly improved treatment adherence and understanding of that treatment in that age group, according to the study.

“(Cancer) can be incredibly disruptive and rips you away from your identity of being a normal kid,” said HopeLab spokesman Richard Tate. “The games give them the experience of what it means to be inside the body fighting cancer, using these prescriptions as weapons in their arsenal and the fight to regain a sense of control with your life.”

Many game developers lent their talents to the project. But developers also got some inside help.

Former cancer patients worked with the design teams to help create the right mood, challenges and visual design for “ReMission’s” five games.

Brooke Jaffe, a 21-year-old English major at Barnard College in New York, and Justin Lambert, a 20-year-old nursing major at Concordia University in Portland, Oregon, are two cancer patients in remission who helped with the project.

Both worked on concept art, images and play testing. But both said that the most important aspect of the game, to them, was how it would make a patient undergoing cancer treatment feel.

“Other than feeling like crap all the time, you don’t see the results,” said Lambert, who was diagnosed with acute lymphocytic leukemia at 2. “You don’t see the impact that’s brought to the body fighting the cancer. (The game) puts it into perspective — something they can visualize and definitely get hope from that.”

Jaffe was diagnosed with papillary carcinoma in 2011 and said the cancer experience can make young people feel powerless — like their recovery is based on passively allowing doctors and others to do their work.

“You actually don’t feel like you’re doing that much because it’s all these outside forces acting upon you,” she said. “I think what’s really beneficial about a game like ‘Re-Mission 2′ is the whole concept of using games to help people get a sense of activity in a situation that can rob you of that activity.

“I think that’s a very powerful thing even on a psychological level.”

Dr. Brandon Hayes-Lattin, a cancer and blood disorders specialist at the Oregon Health Science University, has been involved in a field of cancer care called adolescent and young adult oncology. He and his colleagues have been working on understanding why patients in that age group don’t show improvement in cancer-care rates on par with young kids or older adult patients.

“Across the board, no matter what the age, it is difficult to adhere to a common cancer schedule,” he said. “The number of medications, the tracking of medications can be difficult.

“You can really engage young adults through a video game as long as the video game is cool. There is also this underlying theme of empowering patients to understand what they are going through and what their own role is in their cancer care.”

With “Re-Mission 2,” he said, the mobile aspect of the minigames allow patients to be involved even while they are waiting for, or receiving, treatment.

The free minigames are available for the iPad or online. Tate said teams are working to expand the number of platforms to get the game into as many hands as possible.

Article source: http://rss.cnn.com/~r/rss/edition_technology/~3/OyAbmkjhhIY/index.html

(CNN) — In the battle against cancer, one video game is taking the deadly disease head-on. And some young patients are the winners.

“Re-Mission 2″ is a collection of online minigames designed to get teen and young-adult cancer patients involved in understanding more about their conditions and how the body benefits from sometimes unpleasant treatments.

Researchers at HopeLab, a nonprofit organization searching for products that positively impact health behavior, were emboldened by the success of their original 2006 title, “Re-Mission,” and were looking for a better way to help patients.

“Research on the original ‘Re-Mission’ showed that it impacted biology and behavior, primarily by energizing positive motivation circuits in the human brain and giving players a sense of power and control over cancer,” said Dr. Steve Cole, a vice president at HopeLab and professor of medicine at UCLA. “That gave us a whole new recipe for engineering the games in ‘Re-Mission 2′ by harnessing the power of positive motivation circuits in the human brain.”

The Flash-based games in “Re-Mission 2″ mimic what the patients are going through in their therapy, but in a way that gamifies the treatment and involves the patient in “destroying” their cancer.

Weapons in the game include chemotherapy, cancer drugs and cells in the body’s own immune system.

A 2008 study into the effectiveness of the “ReMission” idea found that, for patients from 13 to 29, sticking to a treatment regimen when managing chronic illness was a significant problem. Playing the game greatly improved treatment adherence and understanding of that treatment in that age group, according to the study.

“(Cancer) can be incredibly disruptive and rips you away from your identity of being a normal kid,” said HopeLab spokesman Richard Tate. “The games give them the experience of what it means to be inside the body fighting cancer, using these prescriptions as weapons in their arsenal and the fight to regain a sense of control with your life.”

Many game developers lent their talents to the project. But developers also got some inside help.

Former cancer patients worked with the design teams to help create the right mood, challenges and visual design for “ReMission’s” five games.

Brooke Jaffe, a 21-year-old English major at Barnard College in New York, and Justin Lambert, a 20-year-old nursing major at Concordia University in Portland, Oregon, are two cancer patients in remission who helped with the project.

Both worked on concept art, images and play testing. But both said that the most important aspect of the game, to them, was how it would make a patient undergoing cancer treatment feel.

“Other than feeling like crap all the time, you don’t see the results,” said Lambert, who was diagnosed with acute lymphocytic leukemia at 2. “You don’t see the impact that’s brought to the body fighting the cancer. (The game) puts it into perspective — something they can visualize and definitely get hope from that.”

Jaffe was diagnosed with papillary carcinoma in 2011 and said the cancer experience can make young people feel powerless — like their recovery is based on passively allowing doctors and others to do their work.

“You actually don’t feel like you’re doing that much because it’s all these outside forces acting upon you,” she said. “I think what’s really beneficial about a game like ‘Re-Mission 2′ is the whole concept of using games to help people get a sense of activity in a situation that can rob you of that activity.

“I think that’s a very powerful thing even on a psychological level.”

Dr. Brandon Hayes-Lattin, a cancer and blood disorders specialist at the Oregon Health Science University, has been involved in a field of cancer care called adolescent and young adult oncology. He and his colleagues have been working on understanding why patients in that age group don’t show improvement in cancer-care rates on par with young kids or older adult patients.

“Across the board, no matter what the age, it is difficult to adhere to a common cancer schedule,” he said. “The number of medications, the tracking of medications can be difficult.

“You can really engage young adults through a video game as long as the video game is cool. There is also this underlying theme of empowering patients to understand what they are going through and what their own role is in their cancer care.”

With “Re-Mission 2,” he said, the mobile aspect of the minigames allow patients to be involved even while they are waiting for, or receiving, treatment.

The free minigames are available for the iPad or online. Tate said teams are working to expand the number of platforms to get the game into as many hands as possible.

Article source: http://rss.cnn.com/~r/rss/edition_technology/~3/OyAbmkjhhIY/index.html

(CNN) — “For the workers at Ford and their families absorbing this difficult news today, we will make sure that you are not left behind.”

So tweeted the Australian premier Julia Gillard, as Ford Australia, the local subsidiary of the U.S. giant, this week confirmed the worst kept secret in Australian manufacturing.

More than 1,000 workers will lose their jobs when Ford closes two production facilities in the state of Victoria by October 2016.

The decision came after Ford Australia declared a A$141 million [$135.4 million] tax loss for the year 2012/13. The company has lost around A$600 million [$575 million] over the last five years, making it unviable, it says, to continue producing cars in Australia.

The decision is a blow not only to those who will lose their jobs. It’s also bad news for the ruling Labor government, about to face an election it’s tipped to lose.

It also comes amid concerns that while Australia’s mining boom appears to have peaked, the country’s manufacturing base is in decline.

Ford Australia president and chief executive Bob Graziano said the company had failed to “make the numbers work” when it modeled a number of different scenarios in an attempt to maintain its Australian production base.

A small and fragmented Australian market and uncompetitive cost structures are to blame, according to Graziano.

“There’s been a significant change in terms of the total number of vehicles sold in the large car segment,” he told a media conference. He added “costs are double that of Europe and nearly four times Ford in Asia.”

The news, which will also impact the vehicle manufacturing supply chain across the country, comes despite attempts by the Australian government to prop up the industry.

In the past decade the Australian government has given the auto industry A$12 billion [$11.5 billion] in subsidies — with Ford itself the beneficiary of A$2.5 billion of those subsidies.

But the automaker’s decision to close manufacturing completely by 2016 is likely to add to the growing concerns that Australia is too reliant on its mining industry and resource exports to China in particular, whilst its manufacturing base has been in steady decline over more than four decades.

In the 1960s, manufacturing accounted for close to 30% of GDP. In 2012, it accounted 7.2%.

The Australian Industry Group, an employers organization, said manufacturers were doing it tough in a “high cost economy” while opposition leader Tony Abbott lamented a “black day for manufacturing in Australia.”

But respected commentator Bernard Keane said the news was long overdue and unrepresentative of the state of Australian manufacturing.

“These aren’t the numbers of a company suffering increased competition from a stronger currency, but a company that can’t convince consumers to buy its flagship product any more, a company that has lost touch with consumers, as so often happens with protected industries,” he wrote in news outlet Crikey.

“Nor is the closure representative of Australian manufacturing. For all the stories about high-profile manufacturers struggling, in the year to February the total manufacturing workforce fell by just 3,000, or a third of 1%, to 954,000 in trend terms — the lowest fall in years.”

But manufacturing, once Australia’s largest employer, has seen its share of total employment eclipsed by the health, retail and construction sectors. Contrary to popular belief, the mining industry upon which Australia remains reliant is not the countries biggest employer, according to analysis published on Crikey.

George Megalogenis, economic commentator and author of “The Australian Moment,” a book that tracks Australia’s economic development said “all first world economies have roughly similar stories to tell on manufacturing.

“Manufacturing was the single biggest employer through till the 90s in some countries. But its share of employment and of GDP is declining. And it’s quite a smooth line, which started in the 60s,” he told CNN.

“But now we are at that point where societies are starting to ask themselves whether they let the trend continue to the point where they actually lose the know-how to make things.”

He added: “China will see the same decline in 20 or 30 years time. They will replicate first world trends but with a lag.”

Though it employs fewer Australians, and despite the boom appearing to have peaked, Australia’s mining industry remains the headline act.

Profitable, it provides a significant percentage of company tax revenue to government, even if the tax on super profits imposed by the Gillard government has been a disappointment; the government’s projections of a A$2 billion windfall delivered only A$127 million because the tax is structured to allow the miners to offset the value of their mines against the tax.

Former finance minister Lindsay Tanner has warned in the past that Australia needs to reduce its reliance on mining and focus its efforts on other export industries.

“Minerals are always going to be critical for Australia. There’s no question about that,” he told ABC radio.

However, the diversification of Australian exports had stagnated in the 90s, with growth in tourism, education and specialized manufacturing moving into reverse, he said.

“So it’s not so much that there’s one country that we’re dependent on. It’s that we have I think to some extent too many eggs in that basket,” said Tanner.

For Megalogenis, Australia’s economic reliance on mining would be more acceptable if it had the future firmly in sight.

“When mining crowds everything out and the economy makes room for that, to service China, knowing that it’s a highly volatile global cycle, it becomes a question of what Australia does with the spoils,” he told CNN. “Because there will be a bust,” he added.

Megalogenis says historically, Australia has wisely invested the spoils. “We built Melbourne out of the gold boom,” he said. “But we haven’t really taken the cash from this mining boom and reinvested it in expanding the capacity of the rest of the economy.”

The Gillard government has anticipated a second mining boom, he says, and allocated spending in anticipation.

“But the second chance has been denied us by Europe and the global financial crisis. We had a second crisis and Europe is still in recession. “

Even so, though mining profits are down because of lower commodity prices, profit margins remain high.

According to the Minerals Council of Australia, last year the industry paid in excess of $20 billion in company tax and royalties combined — a four-fold increase on the $4 billion to $5 billion paid at the start of the boom.

What future exists for manufacturing in Australia when the countries finite resources are depleted is a question that no doubt will have to wait until after the September 14 poll.

Article source: http://rss.cnn.com/~r/rss/edition_business/~3/CxUoqmLKmaw/index.html

(CNN) — “For the workers at Ford and their families absorbing this difficult news today, we will make sure that you are not left behind.”

So tweeted the Australian premier Julia Gillard, as Ford Australia, the local subsidiary of the U.S. giant, this week confirmed the worst kept secret in Australian manufacturing.

More than 1,000 workers will lose their jobs when Ford closes two production facilities in the state of Victoria by October 2016.

The decision came after Ford Australia declared a A$141 million [$135.4 million] tax loss for the year 2012/13. The company has lost around A$600 million [$575 million] over the last five years, making it unviable, it says, to continue producing cars in Australia.

The decision is a blow not only to those who will lose their jobs. It’s also bad news for the ruling Labor government, about to face an election it’s tipped to lose.

It also comes amid concerns that while Australia’s mining boom appears to have peaked, the country’s manufacturing base is in decline.

Ford Australia president and chief executive Bob Graziano said the company had failed to “make the numbers work” when it modeled a number of different scenarios in an attempt to maintain its Australian production base.

A small and fragmented Australian market and uncompetitive cost structures are to blame, according to Graziano.

“There’s been a significant change in terms of the total number of vehicles sold in the large car segment,” he told a media conference. He added “costs are double that of Europe and nearly four times Ford in Asia.”

The news, which will also impact the vehicle manufacturing supply chain across the country, comes despite attempts by the Australian government to prop up the industry.

In the past decade the Australian government has given the auto industry A$12 billion [$11.5 billion] in subsidies — with Ford itself the beneficiary of A$2.5 billion of those subsidies.

But the automaker’s decision to close manufacturing completely by 2016 is likely to add to the growing concerns that Australia is too reliant on its mining industry and resource exports to China in particular, whilst its manufacturing base has been in steady decline over more than four decades.

In the 1960s, manufacturing accounted for close to 30% of GDP. In 2012, it accounted 7.2%.

The Australian Industry Group, an employers organization, said manufacturers were doing it tough in a “high cost economy” while opposition leader Tony Abbott lamented a “black day for manufacturing in Australia.”

But respected commentator Bernard Keane said the news was long overdue and unrepresentative of the state of Australian manufacturing.

“These aren’t the numbers of a company suffering increased competition from a stronger currency, but a company that can’t convince consumers to buy its flagship product any more, a company that has lost touch with consumers, as so often happens with protected industries,” he wrote in news outlet Crikey.

“Nor is the closure representative of Australian manufacturing. For all the stories about high-profile manufacturers struggling, in the year to February the total manufacturing workforce fell by just 3,000, or a third of 1%, to 954,000 in trend terms — the lowest fall in years.”

But manufacturing, once Australia’s largest employer, has seen its share of total employment eclipsed by the health, retail and construction sectors. Contrary to popular belief, the mining industry upon which Australia remains reliant is not the countries biggest employer, according to analysis published on Crikey.

George Megalogenis, economic commentator and author of “The Australian Moment,” a book that tracks Australia’s economic development said “all first world economies have roughly similar stories to tell on manufacturing.

“Manufacturing was the single biggest employer through till the 90s in some countries. But its share of employment and of GDP is declining. And it’s quite a smooth line, which started in the 60s,” he told CNN.

“But now we are at that point where societies are starting to ask themselves whether they let the trend continue to the point where they actually lose the know-how to make things.”

He added: “China will see the same decline in 20 or 30 years time. They will replicate first world trends but with a lag.”

Though it employs fewer Australians, and despite the boom appearing to have peaked, Australia’s mining industry remains the headline act.

Profitable, it provides a significant percentage of company tax revenue to government, even if the tax on super profits imposed by the Gillard government has been a disappointment; the government’s projections of a A$2 billion windfall delivered only A$127 million because the tax is structured to allow the miners to offset the value of their mines against the tax.

Former finance minister Lindsay Tanner has warned in the past that Australia needs to reduce its reliance on mining and focus its efforts on other export industries.

“Minerals are always going to be critical for Australia. There’s no question about that,” he told ABC radio.

However, the diversification of Australian exports had stagnated in the 90s, with growth in tourism, education and specialized manufacturing moving into reverse, he said.

“So it’s not so much that there’s one country that we’re dependent on. It’s that we have I think to some extent too many eggs in that basket,” said Tanner.

For Megalogenis, Australia’s economic reliance on mining would be more acceptable if it had the future firmly in sight.

“When mining crowds everything out and the economy makes room for that, to service China, knowing that it’s a highly volatile global cycle, it becomes a question of what Australia does with the spoils,” he told CNN. “Because there will be a bust,” he added.

Megalogenis says historically, Australia has wisely invested the spoils. “We built Melbourne out of the gold boom,” he said. “But we haven’t really taken the cash from this mining boom and reinvested it in expanding the capacity of the rest of the economy.”

The Gillard government has anticipated a second mining boom, he says, and allocated spending in anticipation.

“But the second chance has been denied us by Europe and the global financial crisis. We had a second crisis and Europe is still in recession. “

Even so, though mining profits are down because of lower commodity prices, profit margins remain high.

According to the Minerals Council of Australia, last year the industry paid in excess of $20 billion in company tax and royalties combined — a four-fold increase on the $4 billion to $5 billion paid at the start of the boom.

What future exists for manufacturing in Australia when the countries finite resources are depleted is a question that no doubt will have to wait until after the September 14 poll.

Article source: http://rss.cnn.com/~r/rss/edition_business/~3/CxUoqmLKmaw/index.html

(CNN) — European Union newcomer Croatia is looking to undiscovered oil and gas fields in the Adriatic Sea to revive its ailing economy, according to the country’s president.

Ivo Josipovic told CNN that Croatia — soon to become the 28th member of the European Union — is searching for partners in the energy sector to help reveal oil and gas “green fields” in the waters that separate the Balkan nations and Italy.

Read more: Croatia PM: We need Italy to recover

The country, which relies heavily on its sun-kissed Adriatic coast to attract tourists and boost the economy, is seeking new revenue streams to combat a high national debt and a lack of competitiveness.

In 2012, Croatia’s economy contracted by 2% and is expected to contract by 1% this year, according to Eurostat — the European Commission’s data service.

“There is one way to change the economy and that is to motivate investors to come to Croatia,” Josipovic told CNN in an exclusive interview.

Croatia — a small country of 4.3 million people — is also battling against chronic unemployment over 18%, with only Greece and Spain having a higher jobless rate. But Josipovic is adamant that Croatia’s European membership, which officially begins on July 1, will attract foreign investment and prevent a so-called “brain drain” in the country’s workforce.

“Brain drain is always connected to a bad economic situation, with the EU or without the EU,” he said. He added: “But somehow by foreign investment or companies, I expect some brains to come to Croatia as well.”

Read more: Patek Philippe boss: Quality is more important than growth

One major obstacle to foreign investment is Croatia’s problems with endemic corruption. Since breaking away from Yugoslavia in the early 1990s, Croatia has struggled to choke off profiteering from those in positions of power.

In November last year, the country’s former prime minister, Ivo Sanader, was jailed for 10 years after being found guilty of taking pay-offs from foreign companies.

Read more: Luxury sales defy economic gloom

Sanader — who was premier from 2004 to 2009 — fled the country but was arrested in Austria. He is now appealing his sentence.

Josipovic said: “Corruption is now considered as something that is not acceptable for our society and anyone who is caught will go to jail. Of course, efficiency of investigation is needed through our judiciary.”

Read more: Europe’s new threat: Slow decay

Transparency International — an organization tackling corruption — ranked Croatia below Rwanda, Jordan and Cuba in its Corruption Perceptions Index for 2012. But the country still came in above Italy – Europe’s third largest economy.

Of the former Yugoslav states, Croatia will be only the second country behind Slovenia to join the EU, but the country also has designs to one day join Europe’s embattled single currency area, the eurozone.

Josipovic said the euro is already a de facto currency in Croatia but the country needs at least five years to meet the euro area criteria before it can think about joining.

“[There is] no special target year,” he told CNN. “But we think we already have the euro because if you ask someone the price, they tell you in euros. Our savings in banks are 80% or more in euros because our citizens believe in the euro because the buy euro and save in euro.”

Despite not being in the single currency, many small businesses in Croatia have debts denominated in euros rather than in kuna — the country’s domestic currency – exposing them to exchange rate risk.

Article source: http://rss.cnn.com/~r/rss/edition_business/~3/QG0oMgYTYHk/index.html

(CNN) — European Union newcomer Croatia is looking to undiscovered oil and gas fields in the Adriatic Sea to revive its ailing economy, according to the country’s president.

Ivo Josipovic told CNN that Croatia — soon to become the 28th member of the European Union — is searching for partners in the energy sector to help reveal oil and gas “green fields” in the waters that separate the Balkan nations and Italy.

Read more: Croatia PM: We need Italy to recover

The country, which relies heavily on its sun-kissed Adriatic coast to attract tourists and boost the economy, is seeking new revenue streams to combat a high national debt and a lack of competitiveness.

In 2012, Croatia’s economy contracted by 2% and is expected to contract by 1% this year, according to Eurostat — the European Commission’s data service.

“There is one way to change the economy and that is to motivate investors to come to Croatia,” Josipovic told CNN in an exclusive interview.

Croatia — a small country of 4.3 million people — is also battling against chronic unemployment over 18%, with only Greece and Spain having a higher jobless rate. But Josipovic is adamant that Croatia’s European membership, which officially begins on July 1, will attract foreign investment and prevent a so-called “brain drain” in the country’s workforce.

“Brain drain is always connected to a bad economic situation, with the EU or without the EU,” he said. He added: “But somehow by foreign investment or companies, I expect some brains to come to Croatia as well.”

Read more: Patek Philippe boss: Quality is more important than growth

One major obstacle to foreign investment is Croatia’s problems with endemic corruption. Since breaking away from Yugoslavia in the early 1990s, Croatia has struggled to choke off profiteering from those in positions of power.

In November last year, the country’s former prime minister, Ivo Sanader, was jailed for 10 years after being found guilty of taking pay-offs from foreign companies.

Read more: Luxury sales defy economic gloom

Sanader — who was premier from 2004 to 2009 — fled the country but was arrested in Austria. He is now appealing his sentence.

Josipovic said: “Corruption is now considered as something that is not acceptable for our society and anyone who is caught will go to jail. Of course, efficiency of investigation is needed through our judiciary.”

Read more: Europe’s new threat: Slow decay

Transparency International — an organization tackling corruption — ranked Croatia below Rwanda, Jordan and Cuba in its Corruption Perceptions Index for 2012. But the country still came in above Italy – Europe’s third largest economy.

Of the former Yugoslav states, Croatia will be only the second country behind Slovenia to join the EU, but the country also has designs to one day join Europe’s embattled single currency area, the eurozone.

Josipovic said the euro is already a de facto currency in Croatia but the country needs at least five years to meet the euro area criteria before it can think about joining.

“[There is] no special target year,” he told CNN. “But we think we already have the euro because if you ask someone the price, they tell you in euros. Our savings in banks are 80% or more in euros because our citizens believe in the euro because the buy euro and save in euro.”

Despite not being in the single currency, many small businesses in Croatia have debts denominated in euros rather than in kuna — the country’s domestic currency – exposing them to exchange rate risk.

Article source: http://rss.cnn.com/~r/rss/edition_business/~3/QG0oMgYTYHk/index.html