A pedestrian walks along Queen Street West in Toronto on Sept. 7, 2010. (Flickr / latigi project)

OpenFile

John Clarke, an organizer with the Ontario Coalition Against Poverty, speaks at a press conference about next month's G20 summit protests in Toronto on Thursday, May 20, 2010.

CTV.ca

On Wednesday, five organizers involved with planning the upcoming G20 protests were visited at home or at work by security officials in Toronto.

The officials identified themselves as Canadian Security and Intelligence Service agents, according to Syed Hussan, an organizer with the Toronto Community Mobilization Network, which is coordinating next month’s protests.

“It’s random targeting,” Hussan said. “We’re talking about young students, we’re talking about people who are retired.”

Each was asked about “their political work and affiliations” and their views on protest tactics, said Macdonald Scott, a member of the network’s legal team.

A spokesperson for CSIS said that the agency could not comment on anything to do with its intelligence gathering operations. But the questioning sessions appear to represent the latest episode in a game of cat and mouse between security officers and protesters in the lead up to the G20 summit on June 26-27.

For months, Toronto police have been trying with mixed results to speak with protest organizers. The network maintains that CSIS, the agency responsible for rooting out threats to Canada’s national security, is now also approaching them.

Rights issues

The network calls such encounters “police harassment,” and Hussan said the group plans to publish a list of at least 27 documented instances of them next week.

The unannounced police visits have also caught the attention of the Canadian Civil Liberties Association, a legal agency that promotes respect for “fundamental freedoms.”

On Friday, the CCLA met in a private law office with the Integrated Security Unit, a hybrid of police and military forces that’s planning the enormous security operation for the international summit.

In a statement released hours later, the CCLA said it was concerned about the “unprecedented” security arrangements being planned for the G20, including “pre-summit interactions with potential protesters.”

“There are powers of the police that should not be used to undermine a legitimate and peaceful protest,” said Nathalie Des Rosiers, a CCLA spokesperson.

The CCLA is also concerned with how sonic weapons will be used during the demonstrations, and under what conditions protesters could be arrested en mass. It’s also worried about the size of the security perimeter around the summit and the creation of a “designated demonstration area.”

“The role of the police is also to protect the right of freedom of assembly, not to see this right as an impediment to the meeting or an impediment to security,” Des Rosiers said. “It’s like the Santa Clause Parade. It causes some inconvenience, but it’s a good thing.”

Meaghan Gray, a spokesperson for the Security Intelligence Unit, said that Toronto police are working on guidelines about the use of sonic weapons, which can blast audio messages or emit a painful sound that can immobilize a crowd.

Focus on causes

While many details about the summit’s security have yet to be released, protest organizers held a press conference on Thursday to outline why they want to hold demonstrations.

“After many months of planning, this is sort of our coming out party,” said Claudia Calabro, a spokesperson for the the network.

Nine independent groups who are planning to join in the protests spoke about a range of issues.

Anna Willats, an organizer with Gender Justice for All, criticized the exclusion of abortion funding from Prime Minister Stephen Harper’s maternal and child health agenda for the G8.

A spokesperson for an environmental group noted that Ottawa has refused a request by United Nations Secretary-General Ban Ki-moon to address climate change at the G20 meeting.

Organizers were then asked about the recent firebombing of a Royal Bank branch in Ottawa. But they declined to comment on the incident.

“We’re not here to talk about what happened in another city,” said Lesley Wood, who answered questions on behalf of the network.

That firebombing took place overnight on Monday and caused $500,000 in damages. A group identifying itself as “FFFC – Ottawa” posted a video online of the bank in flames, and claimed responsibility. RBC’s funding of the 2010 Winter Olympic Games and of the oilsands prompted the attack, the group said, adding that it plans to visit Toronto in June.

But the groups involved with planning the G20 demonstrations have a peaceful reputation, according to Janet Conway, the Canada Research Chair in Social Justice at Brock University.

“They have absolutely no history of this kind, and nobody in any activist circle that I know is aware of who this group is in Ottawa,” she told CTV.ca on Friday. “If there’s some window-breaking, or some kind of violent encounter with police, this will be the work of a tiny minority if it happens at all.”

Whatever uneasiness there is among protest groups about the firebombing, organizers of mass demonstrations often agree not to publicly criticize the tactics that other activists use, Conway said, in the hopes of pushing issues they’re concerned with to the forefront.

“That’s not the main story from the point of view of the organizers,” she said. “There’s a sense that national parliaments are not reflective of popular will, and even less so at these gatherings.”

“The growing protests over the last decade reflect that all over the world.”

Demonstrators stand behind a line of riot police in Vancouver during the 2010 Winter Olympic Games. (Kris Krüg)

CTV.ca

While the opening ceremonies of the 20three10 Winter Olympic Games unfolded at BC Place on Feb. 12, about 1,500 people marched through Vancouver’s streets, ushering in days of demonstrations.

Those events are largely remembered with fondness among Canadian protesters because they helped push community issues, such as homelessness and unsettled indigenous land claims, onto the international stage during the Games.

“It was not just to protest the Olympics, it was about tying them to local concerns,” said Harsha Walia, who was an organizer with the Olympic Resistance Network.

“We saw a convergence of social movements,” she said. “The same thing is happening in Toronto.”

Walia added that she and and 50 to 100 other Vancouver residents plan to travel to Toronto for demonstrations against the G20 summit, which is due to be held there on June 26-27.

Activists in Toronto have been meeting for more than a year to plan mass protests aimed at the international meeting. And they say they’ve learned from Vancouver’s anti-Olympics demonstrations.

“There’s a lot of inspiration we’re sharing from there,” said Syed Hussan, an organizer with the 200-member Toronto Community Mobilization Network, which is coordinating the G20 protests. “That was a very successful model.”

Organizers created the TCMN in December to help recruit like-minded groups for the upcoming demonstrations, which are expected to draw protesters from across Canada and the United States. They’re organizing meeting places, booking transportation, setting up lines of communication and gathering food to keep demonstrators energized while they’re on the streets.

As with Vancouver’s Olympics protests, their plan is to “do the local and the global,” Hussan said. Organizers hope to connect popular causes in Toronto’s activist scene, such as poverty and migrants’ rights, with decisions being made by the world’s 20 largest economies.

“The G20 is now a mode for everyone to come together and work towards a concrete point,” Hussan said. “We’re all joining forces, and it’s going to be a major turning point for the city.”

Security concerns

Like the Olympics, a special police unit is heading up security for the G20. It’s staffed by municipal officers, Ontario Provincial Police, RCMP and the Canadian Forces. And it’s responsible for staging what’s being described as the largest security operation in Canada since the Second World War.

For two weeks in June, most of Toronto’s financial district will sit behind kilometres of fence as police work to bolster security around the Metro Convention Centre, where the summit will be held.

“An event of that international size and scope lends itself to a very significant security presence,” said Meaghan Gray, a spokesperson for the Toronto Police Service’s G20 planning team.

“We anticipate that most of the groups that want to protest will do so in a peaceful and responsible way,” she said. “We’re planning of course for any eventuality.”

Police have been trying to talk to protest organizers for the past few months, Gray said. They hope to learn more about what they’re planning, so that the demonstrations and the security operation can work together “seamlessly.”

But many organizers have refused to speak to police, and complain that they’re being harassed.

“Sometimes when you give in to intimidation, it encourages further intimidation,” said Macdonald Scott, an immigration consultant and a member of the protesters’ legal team. “Nobody in Canada is under obligation to speak to the police, unless under arrest.”

Scott travelled to Vancouver during the Olympics to provide legal support during the demonstrations there. In Toronto, he said 40 to 60 “legal observers” will be on the streets to protect protesters. At least six other legal staff will work in an office away from the security zone, and there will be two-dozen lawyers on call.

The job of the legal team will be “to monitor police misconduct,” but also to provide “proper defence” to those who are arrested, and to bail protesters out of jail if need be, he said.

Organizers are also concerned that the scale of the security operations could discourage people from attending planned rallies.

“It’s a fear tactic — people are being scared to shut up,” Hussan said. “And I think the only way to organize in that is to have hope, share, and build community.”

Changing tactics

The expansive security operation being staged for the G20 summit is part of an international trend, according to Lesley Wood, a professor at York University who studies globalization and social movements.

“At any of these demonstrations, the vast majority of people are not arrested or hurt in any way,” she said. “But the optics of it are that it’s going to be a war.”

“The tactics of the protesters are not really radicalizing, and yet you’re seeing this constant militarization of the policing.”

The focus of mass protests in North America has evolved too, she said. During the height of anti-globalization demonstrations from 1999 to 2001, activists took aim at multinational corporations, and the idea of “summit-hopping” was in vogue.

Today, big protests tend to be more concerned with attacking governments for failing to deal with local problems, and with building networks of groups that want to address those problems.

Since the 1960s, social movements have come in waves that typically last a few years, she said. The fallout from the Sept. 11 terrorist attacks largely quashed the protest movement that had been on an upswing on the continent since 1999.

“I think that may have worn off,” she said. “There hasn’t been a lot of mobilization against the economic crisis. Looking at history, one would expect much more outrage.”

“Perhaps this is going to be the time when it emerges.”

A strip coal mine, location unknown. (Stephen Codrington)

CTV.ca

The Cerro San Pedro mine in central Mexico stopped digging for gold Wednesday, on orders from the country’s environmental enforcement agency.

Earlier this month a federal court ruled that the environmental permit of Minera San Xavier, which operates the mine and is owned by Vancouver-based New Gold Inc., was “null and void.”

The court decided in favour of a Mexican environmental group, which argued Minera had violated local conservation laws and was detonating explosives too close to inhabited buildings.

In a news release, New Gold said it “has been operating in full compliance with required permits and government authorizations. The mine has had excellent operational performance in 2009 and has an enviable record of meeting its environmental and social responsibilities.”

The company is appealing the ruling, and will continue leeching gold from the piles of crushed rock it has stockpiled. But the open-pit mine, which employs some 340 workers and takes its name from a centuries-old village dozens of metres away, has been forced to stop excavating.

Closer to home, a debate is intensifying about whether Ottawa should have a say over how Canadian mining companies operate in developing countries.

At issue is a private members bill that proposes:

• the Department of Foreign Affairs investigate any alleged misdeeds by Canadian mining firms in developing countries and publish what it finds;
• Export Development Canada withdraw financing from mining projects that are found to violate corporate social responsibility standards in poor states;
• mining companies found to breach those standards become ineligible for investment from the Canada Pension Plan.

Bill C-300 passed second reading in April by a slim margin, with the Conservatives voting against it and MPs from the other major parties voting for it, or abstaining. A final vote could happen as early as March, and stakeholders are digging to try to influence whether or not Parliament will make it law.

Contentious issue

Amnesty International has launched an online petition to garner support for the bill, citing concerns over human rights violations by Canadian mining companies operating in other countries. MiningWatch, an industry watchdog, says at any given time it is monitoring several dozen cases of accidental or intentional misconduct by Canadian mining firms working abroad.

“We can’t keep up with them all, is the problem,” said Jamie Kneen, a spokesperson for MiningWatch.

Kneen argues that Bill C-300 would boost government accountability, by placing conditions on federal support to Canadian mining firms that work in developing countries such as Guatemala or the Philippines.

The United Steelworkers Union has also been campaigning in support of the bill. Many of its 250,000 members work in the mining industry. Last week, it sent a delegation to Ottawa to lobby MPs.

“We’re trying to raise the floor for workers in other countries,” said Stephen Hunt, the union’s director for Western and Northern Canada. “They should at least follow basic standards.”

But industry groups and Export Development Canada say that attaching strings to public investment money would make the country’s mining industry less competitive internationally.

The proposed rules “are so out of step with the rest of the world that they would only hurt Canadian companies and take them out of the game,” EDC’s senior vice president, Jim McArdie, told a Parliamentary committee that’s reviewing the bill on Oct. 27.

Tony Andrews, executive director of the Prospectors and Development Association of Canada, told the same committee that the bill amounts to “naive and misguided grandstanding.”

“If our politicians decide to insert themselves uninvited into the internal affairs of developing countries, Canada will do more harm than good,” Andrews said.

Global implications

Both sides of the debate say that mining companies should aim for international standards of corporate social responsibility, and avoid causing undue environmental damage or harming anyone who lives near mines in poor countries. But they disagree on how to do that.

“The real solution is to build the capacity within developing-country governments to manage their environmental regulations to protect the environment, and to strengthen their legal processes to protect human rights,” Gordon Peeling, president and CEO of the Mining Association of Canada, told CTV.ca.

Liberal MP John McKay, who proposed the bill, said he’s in favour of any measures to help developing countries strengthen their laws. But he would also like to see social responsibility rules that come with repercussions if corporations break them.

He said Bill C-300 would create “a modest set of consequences” for mining corporations that receive support from the federal government, if they violate international standards, McKay said.

“A company can carry on doing whatever it’s doing, however egregious,” he added. “It just can’t ask for the taxpayer, or the pensioners of Canada for financial support.”

Other countries have been known to withdraw public investment from mining projects for environmental or human rights reasons. Last January, Norway’s public pension plan sold the $200-million stake it held in a Papua New Guinea mine owned by Toronto-based Barrick Gold.

“Pollution from the Porgera mine will potentially have serious negative consequences for human life and health,” it said. In particular, it said the risk of polluting the local environment with dangerous heavy metals, such as mercury, was unacceptably high.

Whether or not Ottawa adopts similar guidelines, the fight over the bill is sure to continue until it reaches final reading, which could happen within four months.

In the meantime mining industry representatives will descend on Parliament Hill Tuesday to meet with political decision makers, as part of an annual event. And Bill C-300 will likely be a popular conversation topic.

“It needs to be defeated — it’s just a debilitating waste of time,” Peeling said. “We should be getting on with more important issues.”

Firefighters and Salvation Army workers pass along boxes for a food drive in Huntsville, Ont. (Travis Jon Allison)

CTV.ca

Thanksgiving is traditionally a big weekend for food drives in Canada. This year, the organizations running them say they’re scrambling to find more donations, as workers who have been laid off or have had their hours cut over the past year struggle to keep food on their tables.

The Ontario Association of Food Banks released a report this week saying the number of Ontarians who rely on food banks each month grew by 20 per cent over the past year. Operating expenses at Ontario food banks rose 84 per cent on average, presumably as they try to meet demand.

Factors such as rising unemployment and increasing food prices are to blame, the report says.

“As a result, we have over 350,000 Ontarians turning to food banks,” Adam Spence, the association’s executive director, told CTV.ca.

At the same time, the province’s food banks are receiving fewer donations, Spence said.

“So they are in a very tight squeeze.”

Food banks in parts of Ontario that have suffered heavy job losses, such as Windsor, Sarnia and Oshawa, are finding it particularly hard to meet local needs, Spence said.

As of September, the number of unemployed workers in the province had risen by 192,000 compared to a year earlier, Statistics Canada says. Although the province’s unemployment rate declined from August to September, over the past year it has risen 2.7 per cent due to layoffs in sectors like manufacturing.

As factories shed workers, Spence said that food banks have been hit twice — by gaining new clients and losing much needed donors.

The recent closing of an 80-year-old food-manufacturing plant near London, Ont., hurt a number of food banks, Spence said. The plant had been donating about 350,000 pounds of food each year to charities in the province.

Some municipalities have provided food-related charities with new resources to help them cope, Spence said.

For example, the City of Thunder Bay has been debating whether to help the Regional Food Distribution Association of Northwestern Ontario to buy a larger building for its office. The association needs more room to move food, after being overwhelmed by a 36 per cent jump in demand this year.

“But even with that support, a tremendous amount of need remains,” Spence said. “At a local level, there are a number of situations where demand has outstripped supply in different places.”

Is hunger rising nationally?

Food banks in other provinces say they’re facing similar challenges as they try to deal with the effects of the recession, a year on.

Compared to October 2008, there were 420,000 more unemployed workers in the country last month. About 1.5 million Canadians were jobless and looking for work. Many lost their jobs between October 2008 and March 2009, during the worst period of layoffs.

Those who have been unable to find new work appear to be turning in greater numbers to food banks to make ends meet.

Nationally, the number of people using food banks has risen 20 per cent, according to Food Banks Canada. More than 700,000 Canadians now rely on them each month, more than a third of whom are under the age of 18.

“We’ve never seen that kind of jump so quickly before,” said Katharine Schmidt, executive director of Food Banks Canada. “So we’ve got a lot of food banks across Canada that are really struggling.”

“There’s often a lag between something changing in a person’s life financially, and then them running out of other resources and having to go to a food bank,” she said. “We’re concerned about the lag, and how many more might be utilizing the resources they currently have, but may soon possibly need some help.”

In Alberta, Edmonton’s Food Bank has witnessed a much larger jump in demand than the national average. During some months over the past year, the number of people seeking help spiked by 70 per cent, said Marjorie Bencz, the organization’s executive director.

Many of the newer clients at Edmonton’s Food Bank say they’ve lost jobs or had hours cut over the last six months, Bencz said.

Her organization is purchasing more food in order to keep up with demand, spending $4,000 on eggs per month instead of $2,000, for example. By August, they had already spent well beyond their budget for the entire year.

Donations have also dropped off, Bencz said. Two corporations that used to contribute a total of $70,000 to the food bank each year have been unable to do so since the recession struck.

“It’s been a very challenging year for us so far,” Bencz said. “We’re just hoping that the economy gets stronger over the next while. We’d like to see less people turning to us.”

In Manitoba, Winnipeg Harvest is loading 500 more hampers of food per week than normal. And the number of school-aged children it supports has risen by 23 per cent since September 2008.

“It’s a huge jump for us,” said David Northcott, Winnipeg Harvest’s executive coordinator.

The biggest group of new food bank clients in the city, however, is people who have been receiving employment insurance, Northcott said. As those benefits have expired for jobless workers, more of them are turning to local food handouts.

“The safety net postpones the pain,” he said. “That’s why, when we saw the layoffs last fall, we’re starting to see a jump (in demand) right now.”

“The stress is on.”

Winnipeg Harvest is also receiving food requests from new families who have recently moved from rural parts of the province to the capital city, where there are more charitable groups to rely on.

“It’s an odd time,” Northcott said. “It’s a very tense time for all Canadians, as well as Winnipegers.”

Turbines on a wind farm in Alberta. (pembina.org / David Dodge)

Arise Technologies Corp. has been mulling whether to expand south of the border ever since U.S. President Barack Obama was elected last year.

The 13-year-old Waterloo, Ont.-based company produces photo voltaic cells used in solar panels – from a factory in Europe. Thanks to an $80-million investment offer by the German government, Arise built its first factory in Bischofswerda, near Dresden, in 2006.

About 100 people work at the plant today. It supplies Europe’s solar energy market, which founder and Chief Technology Officer, Ian MacLellan, calls “far more established and mature” than Canada’s.

The European Union set up an emissions trade system in 2005. It forces emitters who exceed an absolute limit on greenhouse gas emissions to buy credits from less-polluting companies. One result is that 250,000 people now work in Germany’s renewable-energy industry.

MacLellan is anticipating that governments in the U.S. and Canada will put into force the same kind of green energy laws within a year. His industry will expand on this side of the Atlantic Ocean, he expects. So Arise is positioning itself to take advantage.

“People are anticipating some significant growth opportunities in North America,” he says. “I think in 2010, it will be the turning point where this industry will become more mainstream.”

Arise has located firms with operations in the U.S. that it could potentially partner with if it decides to expand there, MacLellan says. Over the next couple of months, his publicly traded firm also plans to set up a 68,000-square-foot pilot plant in Kitchener, Ont. It would produce silicon for solar applications.

“What we’ve been holding our breath on, is the Ontario government following through with implementing regulations for the Green Energy Act,” he says.

The province passed that piece of legislation in May. Proponents say it will create tens of thousands of jobs and help to shore up the province’s ailing manufacturing base. One of the goals of the Act is to encourage investment in renewable energy firms such as Arise.

Regulations to support the Act could be voted into law as early as September. But there are rumours that a debate over whether to include “Buy Canadian” provisions could cause delays.

Meanwhile in Ottawa, a timetable to begin enforcing a proposed national industrial-emissions plan has been pushed back from 2010 to 2011. Green-energy firms, experts and groups concerned with global warming say they know little about what the proposed plan will look like, or how tough it will be.

Environment Minister Jim Prentice has said the emissions scheme will be unveiled before December. That’s when governments from around the world will convene in Copenhagen, Denmark, to negotiate an agreement to replace the Kyoto Protocol, which expires in 2012.

Experts have been arguing for years that making climate-warming gases more expensive to produce is the best way to fight global warming.

“I tell politicians that they have to price carbon if they are serious about reducing GHG emissions,” says Mark Jaccard a professor of energy policy and modelling at Simon Fraser University who has been advising the federal government.

“We can make substantial reductions, at least over a 10-year timeframe, without a huge cost to the Canadian economy,” he says. “You don’t have to reduce output, per se.”

Jaccard points to North America’s first consumer-based carbon tax as an example. It was introduced in B.C. in 2008, and it’s designed to rise each year before leveling out at $30 per metric ton of carbon dioxide in 2012.

Still, Canadian emissions policies pale in comparison to what the U.S. government has been working on.

Congress approved US$59 billion in funding for green-energy initiatives in February as part of Washington’s expansive economic recovery program. The U.S. Senate is also set to debate a bill for a European-style emissions trade system this fall, after the House of Representatives passed it in June.

Syncrude oilsands operations in Northern Alberta. (pembina.org / David Dodge)

As developed countries on both sides of the Atlantic move more aggressively to discourage carbon emissions, climate-change groups are warning that Canadian renewables firms may be left behind.

“We’re clearly one of the laggards internationally,” says Clare Demerse, an associate director at The Pembina Institute, a national sustainable-energy think-tank. That’s creating “very serious competitiveness issues” for local green energy firms, she says.

There are close to 1,000 such companies operating on Canadian soil, according to the federal government.

Ottawa’s 2009 federal budget included $1 billion for the Green Infrastructure Fund, which deals with electricity generation, and $1 billion for the Clean Energy Fund, which targets renewable-energy technology.

However, the U.S. government will invest six times more per capita in renewable-energy and energy-efficiency projects this year compared to Ottawa, the Pembina Institute calculates.

“When they see the amount of support on offer in the United States versus Canada, it’s pretty obvious where a company would want to invest,” Demerse says.

Yet there are signs Ottawa could be heading towards an emissions-trade system similar to the one in Europe, and like the one being considered in Washington.

Last month at the “three amigos summit,” Prime Minister Stephen Harper, U.S. President Barack Obama and Mexican President Felipe Calderon issued a joint statement, pledging to cooperate to reduce greenhouse-gas emissions across the continent.

But Jaccard doubts that the federal government’s climate-change policy will keep pace with that of its southern neighbour.

“I myself speculated that Canada would move fairly quickly to harmonize with the U.S., or perhaps even anticipate where it’s going,” he says. “Now I’m not convinced.”

“They could just as easily drag their feet some more.”

Canadian activists attending climate-change protests near London, England.

A handful of First Nations activists returned home last week after grabbing national headlines in England for protesting Alberta’s oilsands developments.

They had travelled to a London suburb as part of a week-long gathering of several thousand environmental campaigners, dubbed the Climate Camp.

Among other concerns, the First Nations group hoped to pressure British Petroleum to halt plans for an oilsands extraction project in northern Alberta.

British Petroleum began a joint venture with Husky Energy, a Canadian firm, in 2007. Production is scheduled to begin in 2012 and reach 200,000 barrels per day by 2020.

“It’s kind of a situation where they’ve bought the house but they haven’t decided whether or not to move in,” Clayton Thomas-Muller, a campaigner with the Indigenous Environmental Network who made the trip, told CTV.ca by phone from Ottawa.

Clayton-Muller’s organization advocates for indigenous communities across Canada and the U.S. that come into contact with oilsands infrastructure such as pipelines and refineries.

He hoped the visit would “spark a movement, if you will, in the United Kingdom around Canada’s tar sands,” he said. “By the end, it became the primary issue.”

The “camp” culminated in a series of protests on Tuesday. Organizers targeted a range of British companies that they say are contributing to global warming through their work in fossil fuels.

More than 100 protesters blockaded Royal Bank of Scotland’s headquarters. Seven people in the crowd reportedly glued their hands to the building’s windows, police said.

“We went on a sort of tar sands tour of central London,” said Jess Worth, one of the Climate Camp organizers.

Protesters also stopped in front of the Canadian embassy in Trafalgar Square and sang a bastardized version of “Blame Canada,” a 1999 Oscar-nominated song from the U.S. film “South Park: Bigger, Longer and Uncut.”

“That went down quite well,” Worth said. “It was very funny.”

“What we were pointing out is that Canada is now, because of the tar sands, one of the biggest climate criminals in the world.”

Local media outlets picked up on the protests’ Canadian bent. The Guargian newspaper published a scathing opinion piece by George Poitras, a former chief of the Mikisew Cree in northern Alberta, after he arrived in London.

“My people are dying, and we believe British companies are responsible,” Poitras wrote. “UK oil companies like BP, and banks like RBS, are extracting the dirtiest form of oil from our traditional lands, and we fear it is killing us.”

Poitras said the community he’s from, Fort Chipewan, Alta., is suffering from abnormally high rates of rare cancers and other diseases. He suspects it’s because of the oilsands, which lie 250 kilometres away. About 100 of the community’s 1,200 residents have died since 2000, he said.

As less expensive, conventional reserves decline, production from the oilsands developments is expected to triple by 2020. The region contains an estimated 315 billion barrels of oil.

There are three major lawsuits currently underway in Canada due to concerns over how the growing oilsands developments may be affecting nearby First Nations communities, Thomas-Muller said.

One of the cases is underwritten by a British financial institution. In July, Co-operative Financial Services donated $94,000 to help another aboriginal community in northern Alberta sue the provincial and federal governments.

The lawsuit revolves around treaty rights, and the impact that oilsands extraction is having on the lands used by the Beaver Lake Cree Nation. It could take years to hear a decision on the case, and may cost millions of dollars.

Meanwhile, Thomas-Muller is planning a return trip to the U.K. in November to lecture at universities near London, as well as in Scotland and Ireland.

He said he hopes that Canada’s oilsands will become a central issue for British environmental campaigners, in the lead up to a meeting in Copenhagen, Denmark, in December.

That’s when governments from around the world will try to negotiate an agreement to replace the Kyoto Protocol, which expires in 2012.

Paul Krugman at a press conference at the Swedish Academy of Science in Stockholm on Dec. 7, 2008. (Prolineserver)

Paul Krugman, recipient of the 2008 Nobel Prize for Economics, is a professor at Princeton University. He writes opinion pieces for New York Times twice weekly and has authored several books including, most recently, “The Great Unraveling.” (TRENDS magazine, June-August 2009)

There were a lot of indications that a crisis was coming, but decision-makers seemed to ignore them until things got really bad. Why was that?

The first thing is that when people are making money, telling them that it’s not based on well-grounded fundamentals is not a popular position. Nobody wants to hear it. This is always true when you have a bubble and too many people are profiting from the bubble to want to listen. I think there was also a deeper problem among policymakers and many economists, which was an excessive belief that markets are efficient. We saw this proliferation of financial markets, of various kinds of financial derivatives – a rapid increase in the sheer scale of the finance sector. And the assumption was that this all had to make sense, despite substantial evidence that it did not. So most people just didn’t look, even though there were quite obvious clues in the data that something was very wrong. Most people simply chose to ignore that.

What caused the financial crisis?

One reason was simply a prolonged period without a major crisis. The roughly 25 years between the second oil shock and the coming of this crisis bred a lot of complacency. Nothing really bad happened to the global economy and so people took more risks. They forgot that bad things can in fact happen. There were too many risks, too much leverage and too much debt.

The second thing that happened was the change in the nature of the financial system. Twenty-five years ago we had a system that was centered on conventional banks, which were quite tightly regulated; there was limited ability to take risks. Since then we had the growth of a much more complex, much harder to pin down financial sector, with conventional banks making up less than half the total sources of credit. This new system was unregulated, it lacked a safety net and there was no explicit insurance. So we found ourselves exposed to a banking crisis in a way that hadn’t happened since the 1930s.

So it was a willingness to take risks on the one hand, and a failure of regulation on the other?

Yes – people were taking too many risks and regulators hadn’t kept up with the changing financial system, so we had a financial system that was largely without any form of support. There were no airbags on it, you might say.

We’ve witnessed some astonishing financial losses. In everyday terms, where did the money go?

Mostly, the money was never there. People had large sums in their accounts, but it was a mirage. It was only there until someone tried to spend it, and then it was no longer there. But on top of that, there is a lot of real destruction going on.

The world economy is probably now operating 4 or 5 percent below its capacity, which means we’re losing several trillion dollars each year of output that we could have produced but haven’t. That’s a real impoverishment of the world. If it goes on for any length of time it will end up eliminating a substantial fraction of the world’s wealth.

Have we seen the bottom yet, or do we have further to fall?

We certainly still have further to fall. Everybody talks about green shoots, favorable signs. But the only thing we have is some evidence that the pace of the decline is slowing, that things are getting worse more slowly. When we actually reach the point where things level off, nobody knows.

I wouldn’t be surprised if measures like industrial production do in fact level off later this year. But that’s not enough, that’s still leaving output failing to grow – it’s almost certainly going to mean unemployment in the major economies continuing to rise.

So we may hit a kind of plateau beyond which we don’t fall very much. But actual recovery, actual return to anything like full employment, full capacity utilization, I think is years away – two, three years if we’re lucky, quite possibly much longer than that.

Is everyone hurting equally? Who’s feeling the brunt of the slowdown?

There are two kinds of losses here. There are the financial losses, which fall more heavily on the wealthy than they do on the rest because they have more financial assets. But even there, substantial losses are also occurring in pension funds, things that affect people around the world. Then there’s the economic disruption, which I’m sorry to say, as always, falls most heavily on the weakest and the poorest.

If we’re looking at Western countries, unemployment is rising most sharply among the least-skilled, the lowest-paid. And if we’re looking worldwide, although the GDP numbers may be falling most in particularly troubled, advanced countries, the sheer human misery is concentrated in the poorest countries.

A lot of people will starve as a result of this crisis. Not many of those people will be in the West. They will be in less-developed parts of the world.

Will the developing world feel those effects later on?

It’s already happening now. If you look at the sharp fall in world trade and the disruption in world trade credit, you can see there are already extremely negative effects happening in parts of Africa. World trade has declined faster than it did during the Great Depression. For many poor countries, trade is literally what they need to survive. Hit with a decline in their ability to export – which is necessary to buy the essentials of life – they’re in terrible trouble.

How well has Barack Obama dealt with the crisis so far?

I’m giving him a ‘B.’ The fiscal policy has been fast. It looks like it’s going to be reasonably effective, but it’s not big enough. And the bank policy has been cautious – I think the word might be ‘

diffident.’ They’ve shied away from taking any really strong measures to clean up the system.

So I support the general direction of the policies, but I’m disappointed in the lack of boldness.

And how well has the international community responded?

Some things have been good. The expansion of IMF funding is a good sign. In general, I think the IMF has done a good job compared with during the Asian crisis, for example. There have been some major disappointments, though. The inability of the European Union countries to settle on any cooperative economic policy, and in particular the failure to aid emerging Europe on a sufficient scale in this crisis has been a real disappointment.

There’s not a lot of international cooperation going on aside from the IMF funding, and that’s a shame because this really is a global crisis and there’s a lot to be said for cooperating in the response.

What should the Gulf states do to cope with the financial crisis?

They don’t have a lot of freedom of action. They need to engage in some austerity. They need to ride this through. Although oil prices have fallen a lot from those very high peaks in early 2008, they’re actually holding up surprisingly well in real terms.

The price of oil is substantially higher than it was early in this decade, despite the fact that the world economy is so deeply depressed right now. … This is not 1986; this is still a world of surprisingly robust demand for oil.

Credit rating agencies have taken a credibility hit. How do we make them better at what they do, especially when it comes to assessing financial institutions in the future?

Who knows, is the short answer. This is very difficult. We have a problem that doesn’t seem to have an easy solution. The rating agencies are paid essentially by the people they rate. And while crude corruption may be reduced, may be avoided, there’s clearly a built-in tendency not to recognize the realities. Try and think of an alternative model and it’s not so easily done. Have them taxpayer financed? How do we avoid politicization? Try to get some other model for their payment? It’s not clear exactly how you do this. It does require some thought, and it is a real problem because, like it or not, the rating agencies have an enormous impact. Institutional investors almost have to base their decisions on those ratings. But I don’t know what the answer is.

Beyond that, the major changes are going to be a return to a world of more balance, you might say. It’s unlikely that we can have a full world recovery while these very large surpluses for some reason persist [in some countries], and there are large deficits in others. So we’re probably going to be in a world in which China is one way or another pushed more to rely on domestic demand, and in which the United States is pushed to rely more on its domestic saving capacity. It’s a little bit hard to figure out how the Gulf region fits into this, because it will have a high income – I think oil prices will at least partially recover – but limited absorptive capacity [to increase further].

So you don’t think they’ll become any less influential?

Well the trouble is, no matter how much people say “I don’t really trust the rating agencies,” it is nonetheless very difficult for institutional investors to ignore what they say. If the rating agencies put a downgrade on your country’s debt, then your sovereign debt spreads will rise because there are so many players who are more or less mechanically forced to divest themselves of holdings of your debt because of that action.

How do you see the crisis changing the global economy?

I think we’re going to see substantially bigger financial regulations, and with that, substantially reduced financial globalization. A lot of the international penetration of markets was part and parcel of the growth of this unregulated banking sector, and I think that’s going to be reigned in. A lot of things we’re seeing countries do as part of their rescue are also pushing finance towards a home focus. So in a way, the world is going to get bigger again. International finance will be less of a factor than it was.

Will developed and developing countries be pushed further apart?

We may actually have some of the decoupling that people thought would happen in this crisis and didn’t. Now for what it’s worth, we had a perverse situation in these past 10 years where many of these developing countries were actually exporting to a lot of the advanced countries. I don’t think anyone foresees that coming to an end. I don’t think we’re going to have a lot of global protectionism or that trade is going to be cut back very much. There is obviously some pressure there, but I don’t think it’s going to be at the center of the story. It’s going to be a little hard to see how this plays out, but I think it’s probably just going to be a calmer sort of world – less wheeling and dealing, less adventurous finance.

How will people and companies behave differently?

Eventually we hope that there will be a revival in business investment. One of my big concerns is what it will take to get that going. But in the end I think it will happen. In terms of the debt position, non-financial corporations haven’t behaved in a particularly over-the-top way. They’ve actually behaved relatively responsibly, so I don’t think there will be major changes there. Households in the United States, and to some extent in several European countries, are probably going to have much higher savings rates for a sustained period. They were leveraging themselves off, taking on a lot of debt, and relying on capital gains to provide for retirement. That’s not going to happen, so there’s going to be a serious change in consumer behavior.

Will the global services sector grow larger than it was before the crisis, or will it shrink?

Ultimately the reason we shifted to a service-based economy is a combination of saturation in the demand for goods … and higher productivity growth of the goods-producing sector, that pushes us towards services. One of the reasons we have so few farmers is that the farmers we do have are so productive. I don’t think that’s going to change. The only big thing is, I don’t think that financial services is going to come back. We went from financial services bringing in 4 percent of GDP to 8 percent of GDP and it’s not clear there was any social gain from that extra 4 percent of GDP, so that sector’s going to shrink.

But in terms of other sectors, healthcare shows no signs of ceasing to grow. I don’t think we’re going to go back to becoming a manufacturing-centered economy, basically because the manufacturing sector we now have worldwide is big enough to supply the goods people want.

A lot of historians blame the stock market crash in 1929 for the rise of  radical movements. Could something similar emerge now?

It’s hard to come up with anything on that scale. Fascism as a movement existed before the crash, so there was a kind of ready-made template for the anger to fasten onto. There’s nothing comparable to that in today’s world. None of the great powers, economically or militarily, is unstable in that way. So I don’t think you can envisage something like the rise of Nazism coming back.

But we could have a lot of nasty stuff. I worry, for example, about Ukraine – that it might seek to join with Russia and reconstitute the Soviet Union. This is still not a likely event, but the scale of the economic crisis there makes it more likely. I’m doing my best not to think about Pakistan, but when I do I get very scared, and the economic crisis doesn’t help.

How are human rights and fredom of speech being affected?

So far, we’re not seeing states engage in crackdowns or reductions of civil liberties in response – aside from a couple of places where governments have attempted to prosecute bloggers who said negative things. But they tend to encounter a lot of anger and ridicule when they do. So if there’s something out there, I don’t see it.

Is there anything we can do to minimize these cyclical economic swings?

Remember, this isn’t a run-away, out-of-control financial system. If we regulate it we won’t have this kind of crisis again. My read of this is that there have been three major global economic crises since the Great Depression. The first two were about oil. This is the third, and it’s about finance. If we can get finance under control, then we can probably go another generation before we have anything comparable to this.

http://www.trendsmagazine.net/out_wordpress/wordpress/2009/08/03/cause-and-effect/

The Borouge petrochemicals complex in Abu Dhabi, United Arab Emirates.

Governments from Riyadh to Abu Dhabi are stepping up efforts to become heavy-industry titans. But do they have the wherewithal to succeed? (TRENDS magazine, June-August 2009)

In June, Abu Dhabi Polymers Park should begin in earnest to churn out the constituent materials from which plastic goods are made. Armed with a mission to create skilled jobs and attract investment, the 4.5-square-kilometer project, 20 minutes by car from the UAE’s capital city, hopes to attract 60 companies and enough capacity to make a million tons of pliable polymers annually.

Compared to the Gulf’s once booming service sectors like finance and tourism, making money by turning oil into plastic is by no stretch the region’s most glamorous economic project. But if local governments have their way, ventures like the multibillion-dollar polymers complex could arguably play an even more important role in the Gulf’s diversification drive.

Regional plastics production will double to more than 30 million tons per year by 2012, according to the park’s senior vice president – part of a broad push to boost manufacturing along the Gulf. Aside from petrochemicals (like plastics), which are the region’s second-largest export behind oil and gas, local steel and aluminum industries are also heating up.

“We’ve had an explosion in domestic manufacturing in the region,” says Raja Kiwan, energy analyst at consulting firm PFC Energy. “Industrialization forms a huge part of their economic development strategies,” he adds, citing governments in Saudi Arabia, Bahrain, Kuwait and the UAE.

King Abdullah Economic City (KAEC), an expansive $80 billion industrial hub being built on Saudi Arabia’s west coast, is the most ambitious among a host of heavy-industry projects that Riyadh is pursuing. Bahrain, home to the Gulf’s most diversified economy, is trying to expand one of the world’s largest aluminum smelters. And UAE-based Emirates Steel Industries recently announced plans to triple production within five years, through an investment of some $7.2 billion.

The list goes on, and experts say such plans make perfect economic sense. But a handful of persisting strategic problems have them asking whether the region’s industrial-strength ambitions are achievable.

What financial crisis?

Across the globe, 2009 is shaping up to be a dismal year for industrialists. Twenty percent of the world’s crackers (petrochemical plants that turn light hydrocarbons into chemical raw materials) have shut down because of sagging demand, according to the Middle East Economic Digest.

But none have closed in the Gulf, mainly because local petrochemicals firms have access to cheap energy, at stable prices. In countries like Saudi Arabia and the UAE, gas used to feed energy-intensive industries like petrochemicals sells via “what is effectively a government-administered price cap,” Kiwan says. Prices are fixed at a rate several times below what global supply and demand dictate, even in a slow year. “That’s why they have a huge competitive advantage,” Kiwan says, adding that despite the financial crisis, it still “seems to be business as usual” for the Gulf’s existing heavy industry.

Keen to exploit that cost advantage, Manama, Abu Dhabi, Riyadh and other regional capitals are hoping that embracing industrialization will make their economies bigger and more robust. “You’ve got to look at what are the motivations of Gulf states,” says Jane Kinninmont, an expert on Bahrain and Saudi Arabia with the Economist Intelligence Unit. “One of them is macroeconomic … when the price of oil goes down your economy suffers, so you want to protect yourself against those shocks.”

“The other impetus is more a social and political one. The oil industry’s not very labor intensive and all Gulf governments face a domestic unemployment problem, which they want to do something about,” adds Kinninmont, who authored a recent study on the Gulf Cooperation Council’s (GCC) economic outlook to 2020. “The hope is that this will be the kind of high-wage job that will absorb their graduates.”

Instead of exporting unprocessed primary resources like crude oil, as many poorer countries tend to, supplying petroleum to manufacturers is a straightforward way to boost the value of goods that Gulf firms ship to foreign markets. More jobs also mean knock-on effects, drumming up business for local real estate markets and shopping malls. In other words, it holds the promise of much better returns on investment.

Better yet, industrializing could boost economic growth by making Gulf workers more productive. According to a study released last year by the Gulf Investment Corporation and the Conference Board, a non-profit research organization, in 2007, Gulf workers produced only slightly more goods and services per hour of work than they did in 2000. Productivity in the region rose by a miniscule 1 percent annually when, by comparison, it jumped 10.5 percent a year in China over that period.

Technology-based industries like manufacturing could help close that gap. “If you look at the kind of GDP growth that China is enjoying today, that could be the Gulf tomorrow,” says Ken Goldstein, a labor economist with the US-based Conference Board. “By building up physical infrastructure, absorbing human capital, there could be a huge burst of productivity,” he adds. “If it’s all done right.”

Labor of love.

As with many of the Gulf’s development blueprints, however, the devil is in the details. The financial crisis isn’t likely to derail industrialization. “What’s going on right now puts a speed bump – not a solid brick wall – in front of the strategic plan” to bolster manufacturing, as Goldstein puts it. But some government-led projects have been forced to regroup.

Saudi Arabia’s plans to build the world’s largest aluminum smelter have been scaled back as the project’s foreign partner, Rio Tinto, cut its capital investment budget. Dubai Aluminum Co. has also reported a 30 percent drop in sales in the first quarter of 2009, but says it won’t cut production this year.

Under gloomy economic circumstances, the Gulf’s heavy industry seems to be holding up well compared to other parts of the world. Local governments boosted spending to counteract declining foreign investment (the UAE has said it will increase state spending by 21 percent this year), and there are sizeable government reserves to lean on ($432 billion, in the case of Saudi Arabia).

More serious problems loom on the horizon though. Kinninmont wonders whether labor problems will discourage manufacturers from choosing to locate in the Gulf, in spite of the low tax rates and cheap energy on offer here. “There can be difficulties getting visas for enough staff, and shortages of skilled local staff,” she says. “There are still impediments to doing business.” Ownership restrictions, opaque government regulations and other bureaucratic headaches persist, and could limit industrial growth.

Above all, there’s an open question about how the region’s growing aluminum smelters, petrochemical crackers and steel plants will be powered. Qatar’s moratorium on new gas deals stands until at least 2010. The UAE is trying to develop sour gas reserves (a sulfur-rich variety of natural gas) to help fuel industrial expansion.

But sour gas extraction and processing is more technically challenging, and it’s unclear when ConocoPhillips, the company heading up development, will be able to begin production. Saudi Arabia is also searching for additional gas deposits offshore, which are more expensive to exploit. But recent exploration results there have been less than encouraging.

“The problem is not a theoretical one – it’s very much a real concern,” Kiwan says. “Last year, Alcoa was going to move forward with a project but they decided not to because there wasn’t enough available gas. Dubai and Bahrain have been having black outs and brown outs.”

If Gulf states (aside from gas-rich Qatar) can’t secure enough industrial energy supplies, it may hamper efforts to draw in manufacturers, slowing the growth of places like Abu Dhabi’s new polymers park. “The supply-demand balance remains tight,” Kiwan cautions. “If they can’t bring new supplies on past 2011-2012, things are going to become a lot tighter.”

“Governments have started to realize the problem, but they have to pit economic growth and nation-building versus energy efficiency. And in the short term, I think economic growth trumps all.”

King Abdullah University of Science and Technology under construction in Thuwal, Saudi Arabia.

With few signs of homegrown Silicon Valleys on the horizon, Gulf states are spending billions more to attract high-tech knowhow. (TRENDS magazine, May 2009)

Last year, 21-year-old Huawei Technologies did something unthinkable for a Chinese company. By investing a tenth of its revenues and 40 percent of its staff in research and development (R&D), the networking and telecommunications giant registered more patent applications than any company worldwide (unseating Philips Electronics in the process).

Huawei’s focus on R&D seems to be paying off. Its sales jumped nearly 50 percent to $23 billion in 2008, and are projected to keep growing this year. A small but growing portion of that income was generated in the Gulf Cooperation Council (GCC) countries where, since 2003, Huawei has been serving clients like Saudi Aramco and Etisalat. “It might be easier to count who isn’t our client,” laughs Ihab Ghattas, assistant president of Huawei’s Middle East arm. “We have been very aggressive in the market.”

Like the rest of Huawei’s regional management, Ghattas is based out of the firm’s Middle East headquarters in Dubai Media City. The company also has marketing staff scattered across the Levant and Gulf region, as well as a few hundred technocrats that serve major local clients.

But when it comes to R&D, Huawei, like most technology firms in the Gulf, does most of its heavy lifting many time zones from the Arabian desert. The company has research centers from Silicon Valley to Beijing, but the nearest such facility to the GCC lies across the Arabian Sea in Bangalore, India.

“You have to select a place where there is a suitable amount of manpower to generate ideas,” Ghattas says. “The GCC has a reasonable amount of expats living in it – that might not be the best situation for an R&D center, because people do come and go.”

While the GCC’s diversification endgame involves huge technology investments, experts say a lack of stable scientific expertise and resources stands in the way of creating a homegrown Huawei of it own. With few outputs in sight, the question looms: will the Gulf’s embryonic “post-carbon” economy include technology production?

Microscopic returns

In the UAE, Dubai is adding Silicon Oasis, billed as a magnet for software developers, and Dubiotech, a potential hub for life sciences firms, to its slew of industry clusters (each one costing several hundred million dollars to build, is adorned with attractive tax-free perks). Abu Dhabi is also spending $22 billion to create Masdar City, an imagined community of 40,000 that’s expected to grow into a leading center of green-energy research and commercialization.

Elsewhere, the $600 million Qatar Science and Technology Park in Doha was inaugurated in March. And on Saudi Arabia’s west coast, workers are building the King Abdullah University for Science and Technology, which is slated to house the world’s sixth most powerful supercomputer, as well as 20,000 students, staff and faculty when finished.

But there are few signs yet that Middle East-made Microsofts will flourish along the Gulf. Not because of a lack of effort, but because other corners of the world have enjoyed a giant head start in the global competition for prowess in high-tech production, while the GCC has had to start more or less from scratch. South Korea registered 10,260 US patents between 2005 and 2006, for example. The UAE registered 11.

“The problem is other regions are progressing even faster. … Gulf states are going to have to work very hard not to fall further behind,” says Kristin Lord, the author of a 2008 report that measured how far Middle East countries have come towards building knowledge-based societies in recent years. “Investments haven’t always paid off. So one of the questions the report raises is, will these be different?”

The good news is that Gulf companies and governments seem more than happy to buy and apply new technologies. Four of the GCC’s six members ranked in the top 40 countries worldwide on a recent information technology report by the World Economic Forum and INSEAD business school. But those rankings were based largely on the region’s ample technology investments, and its purchasing power as a wealthy technology consumer.

“You show them something new and they want to do it,” says Pooya Darugar, platform and technology evangelist at Microsoft Gulf. “There are no legacy systems [old computers and software] that they worry about. That’s one of the great things about working in this market.”

The US software behemoth moved to the Arabian peninsula way back in 1992, eons ago in terms of the region’s recent breakneck development. Like Huawei though, Microsoft’s operations here haven’t expanded much beyond sales, marketing and customer support. So the $8.2 billion it spent on R&D last year flowed mostly to the company’s corporate headquarters in California, or to development centers in China and India.

But Darugar sees no reason the Gulf states can’t produce the next great wired invention. “The Internet is a very equalizing technology,” he says. “These small startups like Twitter – they could be run out of Bahrain, or out of Oman.”

“If you look at the university students in this area, they have the skills, they have the hunger,” he adds. “We have to make sure they have the capability to go to the market, so they don’t necessarily have to become public-sector workers.”

New addition

One project that the UAE hopes will attract young technology firms is Dubiotech, a handful of buildings under construction near one of Dubai’s arterial roads, on a two-square-kilometer patch of desert that was bequeathed to the project by the emirate’s ruler. The first building – a four-storey laboratory facility – is expected to open by summer. And the science park’s director, Marwan Abdul Aziz, says a dozen firms, from pharmaceuticals to medical-device manufacturers, have signed on as tenants since January alone.

“Most of their activities are market-driven,” Abdul Aziz admits of Dubiotech’s growing list of host companies. “They want to make sure they have a strong base. Once that happens, they will be more comfortable, know the market better, invest more money and do more R&D work as well.”

“This is something that will take some time, and we knew that,” he adds. “For R&D to happen you need a good academic base, and that’s something the UAE is starting to have.”

Indeed, creating new Silicon Valleys takes legions of highly specialized workers, which emerging technology producers like China and India are churning out by the hundreds of thousands each year. But the Arabian peninsula – actually, the entire Middle East – lacks its own world-class technical institutes. So a growing number of the Gulf’s rich petrostates are courting tech-savvy Indian and North American universities to set up local branch campuses nearby.

One is the University of Waterloo (UW), a Canadian institution famous for spurring high-tech startups like Research In Motion, creator of the ubiquitous Blackberry. UW plans to set up two engineering programs in Dubai this fall, although a permanent home for its campus is being built in Abu Dhabi.

“There are a lot of entrepreneurial activities on campus,” says Leo Rothenburg, UW’s acting dean of engineering. “It’s not uncommon that our students graduate and already have businesses started. … We intend to bring that same spirit to the United Arab Emirates.”

Further up the coast, Qatar’s new 14-square-kilometer Education City development already hosts a handful of engineering programs from Texas A&M university, and a computer science program from Carnegie Mellon. The billion-dollar complex dispatched its first round of graduates last year, but many of the students that have enrolled so far have been foreigners. Even though university education is free for citizens of the tiny, petroleum-bathed country, tertiary enrollment for Qataris hovers around 20 percent – a third the rate of most high-income countries.

“They’re starting slowly, but with confidence and quality,” says Hady Amr, director of the Brookings Doha Center, the Qatar branch of a prominent, Washington-based think tank that was established last year, a few kilometers from Education City.

When asked how close the Gulf has come to cultivating its own technology-export industries, he says: “They’re preparing the ground, so that one day those seeds can be planted.”

“If you want to see the results of these things, call me in 10 years.”