Portfolio | February 2015

Portfolio Exclusive to Emirates First Class and Business Class

Brand China What’s In A Name?

Flower Power Holland Goes Digital Commodity Crisis Latin America’s Vicious Cycle

Richard Plepler

The Power Behind HBO

Issue 110 n February 2015

Wilfred Thesiger @ Pitt Rivers Museum

A rich history and a continuous legacy

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Exclusive to Emirates First Class and Business Class

Cover Story 28 The Entertainment King

© Getty Images

Richard Plepler, Chairman and CEO of Home Box Office Inc, might not be a household name but chances are that his efforts are entertaining your household. HBO currently has 130 million subscribers with $4.9 billion in revenue.

Features 34 Work With a Safety Net

Branding was not at the forefront of most Chinese

employment rates despite, or maybe due to, their generous

companies’ thinking when they started out, which now

welfare systems.

leaves them at a disadvantage.

38 Dutch Flower Power Wanes

50 Longer Odds for a Jet

The Netherlands has long been at the heart of the

Canadian firm Bombardier is taking a high-stakes gamble

international flower trade, but that is starting to change.

with its CSeries jet.

42 The Commodity Cycle

38

46 China’s Bewildering Brands

Scandinavian countries have some of the world’s highest

54 Superyachts Bring New Life to a French Port

China’s seemingly insatiable appetite for Latin America’s raw

La Ciotat used to be a centre for shipbuilding but fell into

materials fuelled a boom, but now slowing demand is having

decline. Today, it makes its living refurbishing superyachts for

major economic repercussions.

the rich and famous

58 Robotic Thai Food Taster The e-delicious machine uses sensors to rate the quality of Thai food in an effort to lift the overall standard globally.

42

54

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Essentials 63 The Wild West on Wheels Jumping into a modern-day covered wagon and exploring the majesty of America’s southwest is a trip to remember.

68 The Amazon’s Daring Fare Chef Thiago Castanho is turning Brazil’s culinary scene on its head with his daring use of little-known ingredients sourced from the jungle.

63

72 Ferran Adrià Feeds the Hungry Mind Spain’s most famous chef has ambitious ideas, but he is struggling to pare them into a clear vision.

76 Cuba’s Unique Art Scene Cuban artists are hoping for more exposure and better sales since the United States loosened its economic embargo.

80 Restored Forests Fight Climate Change

68

In Costa Rica, large swathes of rain forest have been allowed to regrow and play their part in taking carbon dioxide out the atmosphere.

84 Rugby Sevens Extends Its Global Reach The inclusion of rugby sevens at the 2016 and 2020 Olympics has sparked off a gold rush as countries rush to participate in this fast-growing sport.

88 Other Business

76

Portfolio takes a light-hearted look at the latest business news.

Departments

84

13 Notebook World business in a nutshell.

19 Observer Spotting and analysing business trends.

26 Column: Katie Allen Women Rising in Global Management

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F O R

S H O P P I N G

L O V E R S

CA S T E L L A N A

S TO R E

S TO R E

M A D R I D / D I AG O N A L

DEPARTMENT STORES SPAIN & PORTUGAL

BA R C E LO N A

Notebook

13

BUSINESS NEWS IN BRIEF

“The current prices are not sustainable,” Suhail Al Mazrouei, energy minister of OPEC member the United Arab Emirates said January 14 in Abu Dhabi. “Not for us but for the others.”

Iron ore producers who predicted a swift exit by higher cost suppliers as their commodity entered a bear market last March were caught out as curbs to global output proved slower than anticipated, Nev Power, the chief executive officer of Australian iron ore producer Fortescue Metals Group, said in October.

Coal exporters have also kept increasing supply as prices slid. Global output rose about three per cent between 2011 and 2013 as prices declined, according to World Coal Association data.

Slow implementation of cuts to production mean coal prices probably won’t recover until 2016, according to

OPEC Future Mirrored in Mining Slump

Moody’s Investors Service. The price of iron ore, down 47 per cent last year, will remain low through 2016 amid supply additions from Australia and Brazil.

UBS expects the global iron ore surplus to jump about sixfold to more than 200 million tons by 2018.

For the oil sector, the lesson is that there’s more oversupply to come.

commodities consumer. With OPEC

output even as prices tumble to five-and-

insistent that it won’t curb crude output,

barrels a day in the week to January 9,

a-half year lows may face the same future

and US production rising to its fastest

the fastest pace in weekly records dating

as the mining industry.

weekly pace in more than 30 years,

back to January 1983. That’s amid a global

oil markets may be in line for similar

supply surplus estimated by the United

prolonged pain.

Arab Emirates and Qatar at two million

In coal to iron ore markets, suppliers have raised volumes even as prices slumped, boosting global gluts and

The Organisation of Petroleum

barrels a day.

The surge in supply of oil to iron

jeopardising profits as the most dominant

Exporting Countries, which pumps about

players seek to maintain revenue and

40 per cent of the world’s oil, agreed

ore comes as China’s transition toward

squeeze out higher cost rivals.

to maintain its production target at 30

consumer-led growth brings to a close

million barrels a day at a November 27

a period of booming demand for metals

electricity, and metallurgical coal, a key

meeting in Vienna. The group is wagering

to energy. The result may be an absolute

ingredient in steel, have tumbled more

that US shale drillers will be first to curb

drop in commodities demand, not

than half since 2011 on supply additions

output as prices drop, echoing a strategy

simply slower growth, according to

and slowing demand in China, the biggest

played out by the largest miners.

Credit Suisse Group.

Prices of thermal coal, used to generate © Bloomberg

US crude output surged to 9.19 million

Oil prOducers reluctant to curb

February 2015

Notebook

14

Numbers Game

£55

£5.75

million settlement has been agreed

trillion value of London’s

residential property is now worth

upon by oil giant Royal Dutch Shell for the two Nigeria oil

as much as Brazil’s annual GDP.

spills affecting the Bodo

Research by estate agents

community in the Niger Delta.

Savills shows UK houses and

The deal ends a three-year legal

apartments have gained almost

battle with SPDC, the Shell

one trillion pounds since 2009.

subsidiary that admitted to

The gains have been driven

liability for spills of 4,000 barrels

by a combination of stronger

caused by operational failures.

domestic demand and an influx of cash from wealthy Russian

$57

million cash deal will give New York-based luxury fashion house Coach complete control over Stuart Weitzman, a brand popular with the Duchess of Cambridge and actress Jennifer Lawrence. Coach’s business has slumped recently and the acquisition of the hip line-up of shoes is expected to give it a muchneeded boost.

and Chinese buyers.

$92

billion was added to the fortunes

of the world’s richest people in 2014, thanks to falling energy prices and geopolitical

$26

billion merger between China’s

top two bullet train makers

5

-year Japanese government bond yield hit zero for the

first time ever, emphasising that

In Figures

the world’s 400 wealthiest billionaires on December 29

– China CNR and CSR Corp –

investors are seeking a haven

will further the country’s export

from global market turbulence

to the Bloomberg Billionaires

market for high-speed railway

caused by tumbling oil prices.

Index, a daily ranking of the

technology. The deal will

The five-year JGB yield dipped

annual award ceremony in Zurich,

end the “cut-throat”

0.5 basis point to 0.010

Switzerland. The Real Madrid and

competition between the

per cent.

Portugal star took the award last

two and make them far more competitive in taking on the likes of Germany’s Siemens and

Photos: Getty Images; Corbis

The World

turmoil. The net worth of

stood at $4.1 trillion according

planet’s richest.

year and in 2002. He trumped

3

rd time Cristiano Ronaldo has

Barcelona forward Lionel Messi and Bayern Munich goalkeeper

Canada’s Bombardier in the

scooped the FIFa

Manuel Neuer, the other two

international market.

Ballon D’Or in an

finalists for the honour.

Rise of the Drones

425,000 units sold.

Drones are everywhere.

Association (CEA), an umbrella

owned toy drones has led to

They’re used in military

group that connects 2,000 tech

discussions around legislation

operations, to shoot films and

companies, they are here to stay

around the devices. In

to take aerial photographs.

– a developing global market

America, the Federal Aviation

And their popularity is set to

that will be worth an estimated

Administration is already

keep rising, with about 100

$1 billion by 2018. That’s an

considering tightening laws to

types debuting in 2015 alone.

increase on the prediction

limit commercial drone use,

for 2015, which is a market

while in the Middle East they

estimate of $130 million, and

have raised privacy concerns.

According to the US Consumer Electronics

The boom in consumer

Portfolio

Notebook European Car Sales Rise Car sales in the European Union rose in 2014 for the first time in six years, according to the industry trade association ACEA. Sales were up 5.7 per cent to 12,550,771, fuelled by government scrappage schemes and wholesale orders from companies.

There was also a shift in sales to cheaper brands, with Dacia and Skoda reporting some of the biggest sales rises.

Spain and the UK saw a sales jump in 2014, up 18 per cent and 9.3 per cent respectively.

ACEA said in a statement that in December sales rose 4.7 per cent year-on-

schemes and tax breaks are being ended.

Carlos Ghosn, chief executive of Nissan-

be about three per cent higher. He said: “We remain cautious about the ability of new

Renault, said at the Detroit Motor Show

car sales to return to their pre-crisis levels

that he expects European growth this year

by the end of this decade. Furthermore,

to be slow, at around one to two per cent.

car sharing and other alternative trends

year, the 16th consecutive monthly rise.

Peter Fuss, an automotive analyst at

of urban mobility are expected to gain

However, the industry remains cautious

business services group E&Y, said in a

relevance in the market amid shifting

about growth this year, as many incentive

research note that he expected 2015 sales to

consumer preference.”

2014 Hottest Year

environmental damage – threaten the existence of much of the world’s marine life unless reversed. The two reports come as

High temperatures across most of the

analysis by the National Aeronautic and

nations worldwide work to craft a binding

globe made 2014 Earth’s hottest year in

Space Administration also found 2014

agreement to curb carbon emissions.

records dating back to 1880, according to

to be the warmest on record. The 2014

the National Oceanic and Atmospheric

temperature beat previous highs set in 2005

South America as well as most of Europe

Administration (NOAA).

and 2010 by 0.07 degree, the agency said.

experienced record heat, NOAA said.

The combined land and ocean

Rising global temperatures can lead

The western US, parts of Russia, interior

Northern Africa, western Australia and

temperature on the planet was 1.24 degrees

to higher ocean levels, disruptions to

parts of the Pacific, Atlantic and Indian

Fahrenheit (about 0.7 Celsius) above the

global agriculture, the spread of tropical

oceans also were warmer.

20th-century average. An independent

diseases and a change in weather patterns,

temperature was 1.8 degrees above the

Intergovernmental

20th-century average, the fourth-highest

Panel on Climate

since 1880, NOAA said. The globally

Change.

averaged sea surface temperature was 1.03

The tally comes

degrees above the 20th-century average

on the heels of a

and an all-time high, surpassing previous

report in the journal

records set in 1998 and 2003.

Science concluding

February 2015

On land alone, the average annual

according to the

Average annual sea ice in the Arctic fell

that human

to 10.99 million square miles, the sixth-

activities – including

smallest in 36 years of record keeping.

global warming,

Antarctic ice totalled 13.08 million square

overharvesting and

miles, the most on record.

15

16

Notebook DUBAI EVENT: AIRCRAFT INTERIORS MIDDLE EAST (AIME) 2015 DATE: FEBRUARY 2-3 VENUE: DUBAI WORLD TRADE CENTRE WEBSITE: AIME.AERO The region’s only aircraft interiors event focuses on cabin interiors, in-flight entertainment and in-flight catering. Held alongside the MRO ME event (Maintenance, Repair and Overhaul of aircraft) it is set to host over 250 exhibitors. The exhibition highlights include the Airline Buyer Programme that gives access to key airline buyers, IFEC Pavilion (In-flight Entertainment & Connectivity) – that features a dedicated exhibition area for IFEC suppliers and manufacturers; and the second annual in-flight workshop and Awards.

EVENT: DUBAI FOOD FESTIVAL DATE: FEBRUARY 6-28 VENUE: ACROSS DUBAI WEBSITE: DUBAIFOODFESTIVAL.COM The Dubai Food Festival is set to return with an expanded 23-day programme of food-related events, activities and promotions. Citywide culinary celebrations will be showcased through unique new concepts and a host of local and international celebrity chef appearances. The festival will highlight four key themes: Emirati cuisine, home-grown restaurants influenced by the 200 nationalities found in Dubai, multicultural dining and street food, and the Michelin-starred chefs who are increasingly opening restaurants in Dubai.

DUBAI

United Arab Emirates

EVENT: INNOVATION ARABIA 8 DATE: FEBRUARY 16-18 VENUE: THE ADDRESS DUBAI MALL WEBSITE: INNOVATIONARABIA.AE This event addresses the trends, solutions and challenges in the development of sustainable economies in the Arab World through innovations. It will host activities including round tables, research awards, formal gatherings and an exclusive gala dinner.

Leading academics, research scholars and industry professionals from around the world will have the opportunity to meet, network and share their experience in various business fields, management, health and Islamic finance.

EVENT: OFFSHORE REGAS FORUM DATE: FEBRUARY 23-25 VENUE: THE ADDRESS HOTEL, DUBAI MALL WEBSITE: OFFSHOREREGASFORUM.COM The third annual Offshore Regas Forum will bring together top energy companies, LNG traders, project financiers, shipbuilders and other industry experts to discuss the offshore Regas market. The conference will offer a global perspective on the latest LNG floating import solution and will serve as a platform for key stakeholders to pursue new business opportunities. Major topics will include global overview of LNG supply and demand dynamics, bankability structures of projects, and the designing of mobile, flexible and efficient units that are equipped to reach remote areas.

EVENT: GESS — GULF EDUCATIONAL SUPPLIES AND SOLUTIONS DATE: FEBRUARY 24-26 VENUE: DUBAI WORLD TRADE CENTRE WEBSITE: GESSDUBAI.COM This one-stop-shop for education professionals is aimed at the direct sourcing of the latest in educational supplies and solutions. The 8th edition will host more than 350 exhibitors from 35 countries and more than 9,000 regional and international education professionals are expected to attend. The GESS Awards will honour the best educational establishments, dedicated members of the teaching profession and suppliers of educational products. The awards are followed by a gala dinner.

Portfolio

Observer BUSINESS NEWS IN BRIEF

On a busy road in the centre of Copenhagen, a string of green lights embedded in the bike path – the “Green Wave” – flashes on, helping cyclists avoid red traffic lights. On a main artery into the city, truck drivers can see on smartphones when the next light will change. And in a nearby suburb, new LED streetlights brighten only as vehicles approach, dimming once they pass.

Aimed at saving money, cutting the use of fossil fuels and easing mobility, the installations are part of a growing wireless network of streetlamps and sensors that officials hope will help this city of roughly 1.2 million meet its ambitious goal of becoming the world’s first carbon-neutral capital by 2025.

Eventually, the network will serve other functions, like alerting the sanitation department to empty the trash cans and informing bikers of the quietest or fastest route to their destinations. It is all made possible through an array of sensors embedded in the light fixtures that collect and feed data into software.

Riding the Green Wave

Copenhagen is a leading city in the race to build a vast sensory network capable of coordinating a raft of functions and services, such as helping cyclists and truck drivers avoid red lights, reports Diane Cardwell.

The system, still in its early stages, has put Copenhagen on the leading edge of a global race to use public outdoor lighting as the backbone of a vast sensory network

serve the market. “It is now or never,”

completed the switch to outdoor LED

said Munish Khetrapal, who helps lead

and services: whether easing traffic

lighting and is using sensors embedded in

so-called smart city efforts at Cisco

congestion, better predicting where to salt

the pavement to detect traffic congestion

Systems. “If you lose the opportunity, it’s

before a snowstorm or, to the alarm of

and synchronise signals.

going to take another 20 years.”

privacy advocates, picking up on suspicious behaviour on a busy street corner.

Cities worldwide are expected to replace 50 million aging fixtures with LEDs during the next three years, with roughly half of © 2014 New York Times News Service

Los Angeles, for example, has almost

capable of coordinating a raft of functions

And other cities are pushing ahead, as

Cisco, which has been pursuing smart-city

hundreds of pilot programmes and dozens

applications for years, is working with more

of larger-scale installations involving

than 100 cities, Khetrapal said. In November,

LEDs with network control are underway.

the company entered a partnership with

“The technology has ramped up. A

Sensity Systems, which makes the advanced

those in Europe. Some are mainly interested

lot of players are getting involved in

networks to help connect and coordinate

in switching from outmoded technologies

network control, and the numbers really

the function of disparate agencies in cities

to one that uses less energy and can last

proliferated from there,” said Jesse Foote,

as varied as Chicago; Bangalore, India; and

for decades. But many others want to take

a lighting industry analyst at Navigant,

Barcelona, Spain.

full advantage of the LED’s electronics,

a research and consulting firm.

which are more conducive to wireless communication than other types of lighting.

February 2015

Seeing the demand, technology and software companies are scrambling to

IBM and Philips are also aggressively pursuing smart-city projects along with lesser-known companies like Silver Spring

19

20

Observer Networks, which provides networking

– can cross the line into tracking one

platforms, software and services for critical

person’s actions, the advocates say.

So far, though, in Copehagen, where

infrastructure to utilities and cities and is helping design and operate the traffic and

crime is relatively low, residents have

street lighting project in Copenhagen.

expressed little worry that the government will monitor their behaviour. And with

Despite all the activity, no one has yet created a fully integrated network, said

biking already the preferred means

Hugh Martin, Sensity’s chief executive.

of transportation for almost half the

But it is coming, executives and officials

population, the emphasis on improving

say, because city managers are eager to

the ride is welcome.

For instance, Bjorn Klüver, 33, gave

improve services while saving money and energy. “The cities are in a race to deploy

up his car – at least until the weather

smart technology, and in the business

turns – in favour of an electric bike to

of building a platform it’s all about how

make the 26-kilometre commute to work

many nodes are out there,” Martin said,

and back. He also took one of the GPS

referring to the individual lights and

trackers that transportation workers were

sensors capable of connecting to a larger

handing out on the street one day in

network. “It’s a land grab.”

the hope of helping the city upgrade the system. He said he had no worries about

That dynamic is evident in this bustling, yet orderly city where the government is

the increasing use of sensors in general

aggressively pursuing efficiency upgrades

or the tag on his bike, which he bought

and carbon-emission reductions, and

after participating in a Gate 21 pilot

dozens of companies have answered

programme, because the workers did not

the call. For instance, in Albertslund,

take any personal information from him.

Denmark – a suburb – 25 companies are participating in the Danish Outdoor Lighting Lab, a demonstration project to test and show about 50 different networked street-lighting systems.

Top: An LED streetlight, part of the Danish Outdoor Lighting Lab, in Albertslund.

Above: One of a string of green lights embedded in the bike path of a road that flash on, helping bicyclists avoid red traffic lights, in Copenhagen.

“I’m helping, basically, giving them data on my travel times,” he said. “All they know is where the bike is.”

Others also praised the efforts, especially the green wave, which other cities, including San Francisco and Amsterdam,

The project, organised by a non-profit

have adopted as well. Copenhagen is

called Gate 21 in collaboration with the Technical University of Denmark and the

feature that allows drivers to send a signal

upgrading the green wave to respond to

City of Albertslund, has installed arrays of

for priority at intersections. “It costs a lot of

cycling conditions, as well as developing

lights along the streets and bike paths that

money to start the truck up – diesel fuel.”

apps for smartphones and a system that

technicians can control and monitor.

The city is also testing systems to

In the city centre, traffic officials are

prioritise buses or bikes over cars at

can automatically give groups of five or more cyclists right of way at intersections.

“If you hit the green lights, you can

testing a number of approaches, including

intersections during certain hours and

one aimed at keeping trucks from making

has already installed one that flashes a

maintain your speed,” Claus Deichgraeber,

stops as they travel the major roads, which

warning to truck drivers in a right-turn

30, a nurse, said one afternoon outside the

would save on fuel. On a recent morning,

lane when cyclists are present.

Torvehallerne market. Although he tends

Lennart Jorgensen, a long-time city driver,

But the adoption of the networks has

to commute to work by bus – “I can find

slowed and accelerated his truck as he kept

raised concerns, as well, particularly

some inner peace, put the headphones in

an eye on approaching traffic signals and a

from privacy advocates, who say that

and just relax” – he frequently uses his

bar graph on his smartphone that indicated

the potential for misuse is high. The

bike, as well. Unlike many of the other

how soon the light would turn red or green.

availability and the reach of the networks

Copenhagen residents, however, he said

increase the risk that monitoring – for

he wears a helmet. “In my work, I’ve seen

example, pedestrian movement on a street

what traffic accidents do to people.”

“It’s very smart,” he said of the system, adding that he did not often need to use a

Portfolio

Observer

22

O N E 2 W AT C H

Paula Schneider TExT: HildA d’sOuzA

American Apparel, the Los Angeles-based clothing company, appointed retail industry veteran Paula Schneider as the new Chief Executive Officer on January 5. Schneider took over the reins of the textile group from interim CEO, Scott Brubaker. The brand officially terminated founder and former CEO Dov Charney after allegations of sexual and financial misconduct.

Schneider’s nomination comes amidst the turmoil of Charney’s ouster and dwindling revenues.

The company reported a $19.2 million loss in the third quarter of 2014 and suffered a sales drop in both its retail and wholesale segments.

Schneider, who has a background in fashion retailing, served as a top executive at companies such as Warnaco, Gores Group and BCBG Max Azria. At Warnaco, which makes swim suites for Speedo and Calvin Klein, she was credited for a 25 per cent increase in direct operating profit over two years. At Big Strike, a sportswear company, she was credited with improving the design capabilities to further sales growth and revenues.

At American Apparel, Schneider is expected to start by closing moneylosing stores in locations such as New York. She is also aiming to streamline operations and find

ways to increase online sales, which currently represent about 15 per cent of overall revenues according to Forbes.

Schneider also wants to restore the clothing firm’s image. “American Apparel has a unique and incredible story and it’s exciting to become part of such an iconic brand.

My goal is to make American Apparel a better company, while staying true to its core values of quality and creativity and preserving its sweat shopfree, Made in USA manufacturing philosophy.”

The beleaguered firm’s reputation could benefit from the fact that Schneider has a long track record of commitment to women’s

China’s Cooling Car Market

and selling some models at losses to meet sales targets set by automakers, according

China’s car dealers are in open revolt over

determines the fortunes of global

to a survey by the China Auto Dealers

industry practices that have slashed profits,

automakers. China vehicle sales in 2014

Chamber of Commerce.

threatening growth prospects for companies

rose at half the pace of the preceding year,

such as General Motors and Volkswagen in

a “new normal” according to BMW after

automakers’ distribution networks means

the world’s biggest auto market.

surging growth in past years triggered by

that fortunes are unlikely to improve soon

government subsidies.

for dealerships.

Retailers are banding together under the state-backed China Automobile Dealers

Photos: Getty Images

causes. She’s the winner of the 2010 Inspiration Award from the National Association of Women’s Business Owners, and a top fundraiser for the Avon Walk for Breast Cancer.

She also belongs to the Women’s Association of Venture and Equity, a non-profit organisation.

Schneider is the first female CEO in the company’s history and her leadership could go a long way towards rehabilitating American Apparel.

Investors appear happy with Schneider’s appointment as share prices have risen 30 per cent since she took over.

Total vehicle sales are

Association to demand lower sales targets

forecast to rise seven per

and a bigger share of profit from vehicle sales.

cent this year, little changed

The Bayerische Motoren Werke agreement

from 2014, because of cooling

last month to pay $820 million to its dealers

growth and as more cities

has emboldened distributors for VW and

impose purchase restrictions

Toyota to demand similar concessions.

to fight pollution, according

The rising tensions means companies like VW and GM will face the choice of narrower profit margins or slower growth in China, a market that increasingly

A slowing economy and expansion of

to the China Association of Automobile Manufacturers.

Almost all retailers in the country are offering discounts Portfolio

Observer Low Oil Price: Winners and Losers The biggest collapse in energy prices since the 2008 global recession is shifting wealth and power from petro-states to industrialised consumers, according to a Berenberg Bank AG report.

The biggest winner would be the Philippines, whose economic growth would accelerate to 7.6 per cent on average over the next two years if oil fell to $40, while Russia would contract 2.5 per cent over the same period, according to an Oxford Economics Ltd.’s December analysis of 45 national economies.

One concern of central bankers is the

Facebook Expansion Spree

effect of falling oil prices on inflation. If

Virtual reality goggles, drones and data

of delivering internet service to remote

inflation to reach 1.5 per cent in the first

centres are all driving a hiring spree at

regions of the world is another important

half of this year, while sustained weakness

Facebook that is set to swell its ranks as

area for hiring: the programme has

in oil suggest a decline to one per cent.

much as 14 per cent in the near term,

Facebook searching for specialists in

As for growth, a long-lasting price of $60

according to a review of job listings on the

areas such as avionics, radio frequency

would add 0.5 percentage point to global

company’s website.

communications and thermal engineering.

gross domestic product.

The internet social networking

Facebook’s growth spurt comes as the

crude remains below $60 per barrel this quarter, global inflation will reach levels not seen since the worldwide recession ended in 2009, according to JP Morgan Securities. The company predicts global

Investors are also feeling the uncertainty.

company aims to add nearly 1,200 new

company expands into new markets and

While cheaper oil helps consumers, business

employees, the outgrowth of aggressive

faces stiffening competition from web

spending has a bigger effect on equities, and

investments that executives have said will

rivals Google, Alibaba and well-capitalised

oil companies are set to cut investments.

define the coming year.

start-ups such as Snapchat.

Oil at $50 a barrel could trim $6 a share

Oculus Rift, the maker of virtual

Facebook had 8,348 full-time employees

reality headsets that Facebook acquired

at the end of September, far fewer than

in a $2 billion deal last year, is among

Google’s roughly 55,000 employees or

the key areas slated for growth. The

Microsoft’s roughly 127,000. At the same

market for virtual reality headsets is still

time, Facebook gets more out of each

nascent. But if virtual reality takes off for

employee, according to calculations using

entertainment, gaming, communications

company revenue figures. Facebook’s

or computing, Facebook could be at the

revenue works out to roughly $384,000

centre of the new platform with Oculus.

per employee in the third quarter of last

Facebook’s ambitious effort to build its own satellites and drones capable February 2015

year, versus $300,000 for Google and $183,000 for Microsoft.

off earnings in the S&P 500 Index this year, according to strategists at Bank of America.

23

24

Observer countriEs of thE Economic frEEdom indEx

The World

Top 10 CoMPIlED By hilda d’souza

rank

COUnTrIES

1.

Hong Kong

OVEraLL SCOrE 90.1

2.

Singapore

89.4

3.

Australia

83.0

4.

Switzerland

81.6

5.

New Zealand

81.2

6.

Canada

80.2 78.7

7.

Chile

8.

Mauritius

76.5

9.

Ireland

76.2

10.

Denmark

76.1

SourCE: HErItAGE.orG/INDEx/rANKING

Global EnErGy architEcturE PErformancE indEx

fortunE 500 comPaniEs

rank

COUnTrIES

EaPI 2015

rank

COMPanY

1.

Switzerland

0.80

1.

Wal-Mart Stores

2.

Norway

0.79

2.

Exxon Mobile

407.7

3.

France

0.77

3.

Chevron

220.4

nET SaLES ($ bILLIOnS) 476.3

4.

New Zealand

0.76

4.

Berkshire Hathaway

182.2

5.

Spain

0.76

5.

Apple

171.0

6.

Sweden

0.76

6.

Phillips 66

161.2

7.

Denmark

0.75

7.

General Motors

155.5

8.

Austria

0.75

8.

Ford Motor

147.0

9.

Colombia

0.74

9.

General Electric

146.3

10.

Portugal

0.73

10.

Valero Energy

137.8

SourCE: WEForuM.orG

IMF Lowers Global Forecast The IMF made the steepest cut to its global-growth outlook in three years, with diminished expectations almost everywhere except the US more than offsetting the boost to expansion from lower oil prices.

The world economy will grow 3.5 per cent in 2015, down from the 3.8 per cent pace projected in October, the International Monetary Fund said in its quarterly global outlook released in January. The Washington-based lender also cut its estimate for growth next year to 3.7 percent, compared with 4 per cent in October.

The weakness, along with prolonged below-target inflation, is

2012, when the fund lowered its estimate for expansion that year to 3.3 per cent from 4 per cent amid forecasts of a recession in Europe.

challenging policy makers across Europe and Asia to come up with

The IMF marked down 2015 estimates for places including the

fresh ways to stimulate demand more than six years after the global

Euro zone, Japan, China and Latin America. The deepest reductions

financial crisis.

were in places suffering from crises, such as Russia, or for oil

The IMF cut its outlook for consumer-price gains in advanced economies almost in half to 1 percent for 2015. Developing

exporters including Saudi Arabia.

IMF Managing Director Christine Lagarde outlined the

economies will see inflation this year of 5.7 percent, a 0.1 percentage

sobering outlook in her first speech of the year last week, saying

point markup from October’s projections, the fund said.

that oil prices and US growth “are not a cure for deep-seated

The growth-forecast reduction was the biggest since January

weaknesses elsewhere.”

Portfolio

Commentary

26

Katie Allen

Women Rising in Global Management

companies. However, women tend to be concentrated more in micro and small enterprises, the ILO study found. “They represent around 24 per cent of all employers in all regions except the Middle East and North Africa (MENA) where they are around six per cent.”

The number of women in senior and middle management positions around the

While women are gaining access to

world has increased over the past 20 years,

more and higher levels of management,

but women are still under-represented in

there is a tendency for them to be

top management, according to the wide-

clustered in particular managerial

ranging new study.

functions such as human resources, public relations and communications, and

getting more women into management

finance and administration. These tend to

it is slow and at this pace it will be more

be in areas that are not on a path to the

than 100 years before parity is achieved,

chief executive role.

according to the International Labour Organisation (ILO). Its Bureau for Employers’ Activities brought together data from around the world to try to provide the most up-to-date and global picture on women in the business world.

Photo: Getty Images

Although there has been progress on

Marissa Mayer, from Yahoo, is one of the few female CEOs heading a top company.

may not be a direct causal link and notes the argument that companies that promote women to top jobs are often those

ILO data provided by 49 countries gives

technology. But the ILO found that several

female board representation and women in

an indication of the proportion of women

important studies have concluded women’s

management and makes the case for more

in senior and middle management in the

participation in decision-making is positive

women at the top of business.

private and public sectors combined in

for business outcomes.

Deborah France-Massin, director of the

2012. Dominican Republic comes out top

McKinsey & Company, for example,

ILO Bureau for Employers’ Activities said:

with women making up 55.8 per cent of

found that European listed companies with

“Our research is showing that women’s

senior and middle-level managers in 2012.

more women in their management teams

ever increasing participation in the labour

In just four countries – Finland, Sweden,

had 17 per cent higher stock price growth

market has been the biggest engine of global

Norway and the UK – do women represent

between 2005 and 2007, and their average

growth and competitiveness. An increasing

more than 20 per cent of board members,

operating profit was almost double their

number of studies are also demonstrating

the ILO said, citing a report covering board

industry average.

positive links between women’s

seats in 44 countries from US non-profit

It also cites a 2012 report by the bank

participation in top decision making teams

group Catalyst. But the ILO study points

Credit Suisse based on a database of the

and structures and business performance.”

out that when it comes to a woman being

number of women – since 2005 – sitting

the chairperson of a company board, the

on the boards of the 2,360 companies

data is available, the proportion of women

percentages decline sharply – generally in

constituting the MSCI AC World index.

managers has increased over the past 20

the range of zero to a few per cent.

It found that over the previous six years,

In 80 of the 108 countries for which ILO © 2015 Guardian News & Media

the bottom line. It cautions that there

that invest in research, innovation and

Women in Business and Management: Gaining Momentum ranks countries by

The ILO analysed studies into how having more women at the top can help

years. But only five per cent of the CEOs of

Today, women own and manage

companies with at least one female board

the world’s largest corporations are women.

more than 30 per cent of all businesses,

member outperformed by 26 per cent those

The larger the company, the less likely the

ranging from self-employed, micro and

with no women on the board in terms of

head will be a woman, the study found.

small enterprises to medium and large

share price performance.

Portfolio

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Profile

28

Richard Plepler, Chairman and C EO of H o m e Box Office Inc, might not be a household na m e b u t c h a n ce s are that his efforts are entertaining yo u r household, reports Daniel Evans.

Portfolio

THE EnTERTaInmEnT KIng

February 2015

29

Profile

30

Photos: Getty Images

U

John Oliver. True Detective, which debuted

Emmy Awards-winning Girls and Veep. In

in early 2014, became the most-watched

fact, 2015 marked the 14th successive year

new series in HBO’s history. Now in its

that HBO garnered more nominations

fourth season, Game of Thrones is a global

at the Golden Globes than any other

juggernaut, watched by nearly 18 million

television network.

viewers per episode in the US alone.

But that’s not where his resume ends.

The popularity of HBO is reflected in the fact that it reaches 130 million

nder Richard Plepler’s leadership, HBO’s

Plepler was appointed CEO in 2013, but as

subscribers worldwide. Internationally,

original productions have come up with

co-president from 2007 to 2012, Plepler,

HBO branded television networks, along

some of the most innovative, honoured

in partnership with Michael Lombardo,

with the subscription video-on-demand

and critically respected programming on

president, HBO Programming, gave the go-

products HBO On Demand and HBO GO,

television including two of HBO’s newest

ahead to some of HBO’s most acclaimed

bring HBO services to over 70 countries,

shows, the comedy Silicon Valley and the

and successful series including True Blood,

while programming is sold into over 150

topical talk show Last Week Tonight with

Boardwalk Empire, The Newsroom and the

countries globally. In 2013, the first time Portfolio

31

Time Warner disclosed detailed financials for the premium cable network, HBO revenue was up four per cent to $4.9 billion, while operating income rose eight per cent, to $1.7 billion.

The popularity of HBO can have a downside. Game of Thrones has held the dubious honour of being the world’s most pirated TV show in 2012, 2013 and 2014. That’s something that Plepler takes philosophically. “Well, look, it’s the good news and the bad news, right?” Plepler said in an interview with TechCrunch. “The good news is that a lot of people want to see it. Over 18 million people are watching it legally. And most of that pirating is occurring overseas. We’re going to do what we can to bring that down, and we’re going to do what we can, obviously, to bring that down in the United States as well.”

HBO, which launched in 1972, is the the writing on the programmes and the

“Our subscribers love the movies.

Securing that theatrical advantage was important,” explains Pepler.

fact that as a subscription-only service, HBO does not carry “normal” commercials.

This relieves HBO from some pressures to tone down controversial aspects of its programmes, and allows for more explicit content to be incorporated into its shows that would not be allowed to air on broadcast television or basic cable.

Moreover, HBO’s 130 million subscribers

oldest and longest continuously operating

of theatrical movies. And 40 per cent of

are important when it comes to spreading

pay television service in the US. On August

HBO subscribers only watch movies. “Our

the cost of high-end original series.

1, 1980, HBO launched a companion

subscribers love the movies. Securing

network, Cinemax, a movie-based

that theatrical advantage was important,”

more important for the business, Plepler

premium channel created as HBO’s answer

explains Pepler. That’s why shoring up

says both. “Original programming is the

to fellow movie-oriented pay service The

long-term output deals with Universal,

halo on our brand,” he explains. “We

Movie Channel. Since 1977, HBO has

Fox, Summit Entertainment and Warner

want different parts of our constituents

produced original programming, which

Bros was a top priority during the past

to say, ‘I need that’. Originals drive that

includes dramas and comedies in addition

few years. “The gap between us and the

conversation and allow HBO to be part of

to its slate of theatrical films.

competition on movies is bigger than it has

the zeitgeist and cultural conversation of

ever been,” Plepler said.

the nation,” he added.

One of HBO’s core strengths has been that it maintains exclusive first-run film

Since the 1990s, HBO has risen to

licensing agreements with network sister

prominence on the strength of its original

company Warner Bros. Entertainment,

programming that has earned the channel

as well as Universal Studios since 2003

numerous nominations for and wins of

and DreamWorks since 1996. According

Emmy and Golden Globe Awards. One

to Plepler, 80 per cent of HBO’s schedule

aspect of the perceived higher quality of

and 81 per cent of viewing is made up

these shows is due to both the quality of

February 2015

Asked whether films or originals are

Above: Richard Plepler (L) and HBO Programming President Michael Lombardo onstage at the 2014 Summer Television Critics Association.

Opposite page: Game of Thrones draws 18 million viewers per episode and is the world’s most pirated TV series.

Profile

32

But the competition is heating up as the advent of streaming video has made the original programming market increasingly crowded with Netflix, Amazon and Yahoo jumping into it. Original shows such as House of Cards, Mad Men and Breaking Bad have given HBO a run for its money.

According to Plepler, HBO plans to stay on top by making itself “a magnet” where the best talent wants to work. “We can invest more in original programming than our competitors do,” Plepler told a conference in 2013. “The brand is an extraordinarily strong magnet for talent. That’s why Hanks, Scorsese and Spielberg keep coming back.”

Not that there is a problem with healthy competition. “There is a surfeit of competition, a lot of people doing great work,” Plepler says. “I say over and over

“We want different parts of our constituents to say, ‘I need that.’ Originals drive that conversation and allow HBO to be part of the zeitgeist and cultural conversation of the nation,” he added.

again, it’s not a zero-sum game, it’s fine for other people to do good work. As long as we are playing our game, to our full capacity, which is what we think about every day, we are going to have more than our fair share of attention and acclaim. So that’s the focus. That’s the north star.”

Plepler also stresses that it is vital to

Portfolio

33

give artists creative freedom. “The work

want HBO. So, in 2015, we will launch a

environment that we create has to be

stand-alone, over-the-top HBO service in

transparent and you have to be able to

the United States. We will work with our

brook dissent,” he explains. “Everyone can

current partners. And, we will explore

say what’s on their mind and once we make

models with new partners. All in, there

a choice, everyone is behind it. Someone

are 80 million homes that do not have

once said to me, ‘You made the room safe

HBO and we will use all means at our

to talk.’ And I said, ‘If you want to win,

disposal to go after them.”

what other way is there to be?’”

This statement caused some consternation as it could upset the

PlePler is naturally keen to expand

current pay-TV industry. By taking

HBO’s current subscriber base. Speaking

its channel direct to consumers over

at a Time Warner Investor Meeting in

the internet, HBO is challenging the

October, he announced that the company

established model that has ruled TV for

would offer “over the top” (OTT) service to

decades. In the US and Europe, cable and

consumers in 2015, which would deliver

satellite viewers often have to pay a hefty

HBO digitally rather than via cable or

price for a monthly subscription that

satellite television.

includes hundreds of channels they don’t

“That is a large and growing opportunity that should no longer be left untapped. It is time to remove all barriers to those who

want or watch.

Already, nearly 126 million Americans watch video on a smartphone at least once a month, up about 25 per cent over last year, according to Nielsen ratings.

Opposite page top: Plepler is set on delivering HBO programming digitally via the internet.

Bottom left: TV series True Blood has been a major success for HBO. Below: HBO’s True Detective was the most successful new TV series of 2014.

Millions more are supplementing — or replacing — traditional TV viewing with content streamed to tablets, computers

potential upside in convincing more cable

and Net TV devices. Plepler estimates

subscribers to add HBO to their current

that there are 10-million broadband only

plans. The company wants to add 10 to

households in the US, a group that he

15 million such subscribers in the coming

calls “low-hanging” fruit that

years. “This is not binary. It’s not one or

could easily be persuaded to

the other,” he explains. “I see nothing but

buy HBO.

upside for us, nothing but upside for the

“We think there is a still

consumer, nothing but upside for the

a lot of growth left in this

distributor.” It’s all about convenience, he

business, and having an

says. “We want to make HBO available

exciting digital product where

how viewers want it, when they want it and

you can watch HBO on your

where they want it.”

Playstation, on your Xbox,

In other words, HBO should be the

on your Kindle, on your iPad,

entertainment of choice, and that fits

that’s very important for a

in nicely with Plepler’s business plan.

generation of young people

“Our model is building addicts – as

who are getting their video in

many as we can, across the most

another place from the TV.”

franchises. Whether it’s Girls, Game of

Plepler doesn’t believe

Thrones or Silicon Valley,” says Pleplar,

that a stand-alone HBO subscription streaming

February 2015

“Our model is building addicts – as many as we can, across the most franchises.

Whether it’s Girls, Game of Thrones or Silicon Valley ,” says Pleplar, “That’s their obsession.”

“That’s their obsession.”

Plepler also has his own addiction. He

service will inadvertently

admits that running HBO is the “job of a

hasten the collapse of pay-TV

lifetime”. “It occupies all my waking hours

packages. In fact, he says the

and, I confess, some of my sleeping hours

company actually sees greater

as well.”

Employment

34

I

t is a simple idea supported by both economic theory and most people’s intuition: If welfare benefits are

generous and taxes high, fewer people will work. Why bother being industrious, after all, if you can receive a cheque from the government for sitting around – and if your choice to work means that much of your income will end up in the tax collectors’ coffers?

Here’s the rub, though: The idea may be backward. Some of the highest employment rates in the advanced world are in places with the highest taxes and most generous welfare systems, namely Scandinavian countries. The United States and many other nations with relatively low taxes and a smaller social safety net actually have

Work With a Safety Net

substantially lower rates of employment.

In Denmark, someone who enters the labour force at an average salary loses 86 per cent of earnings to a combination of taxes and lost eligibility for welfare benefits; that number is only 37 per cent in the United States. Yet the percentage of Danes between the ages of 20 and 59 with a job is 10 percentage points higher than in the United States.

Scandinavian countries have some of the world’s highest employment rates despite, or maybe due to, their generous welfare systems, reports Neil Irwin.

In short, more people may work when countries offer public services that directly make working easier, such as subsidised care for children and the old; generous sick leave policies; and cheap and accessible transportation. If the goal is to get more people working, what’s important about a social welfare plan may be more about what the money is spent on than how much is spent.

That is the argument that Henrik Jacobsen Kleven, a professor at the London School of Economics, offers to explain the exceptional rates of © 2014 New York Times News Service

Illustration: Tarak Parekh

participation in the work force among citizens of Sweden, Norway and his native Denmark. If correct, it could have broad implications for how the United States might better use its social safety net to encourage Americans to work.

In particular, it could mean that more direct aid to the working poor could Portfolio

35

a month; Hillestad estimates that if she

There is a solid correlation, by Kleven’s

help coax Americans into the labour force more effectively than the tax

calculations, between what countries spend

had to pay a market rate, it would be nearly

credits that have been a mainstay for

on employment subsidies – like childcare,

twice that, eating up most of her paycheque.

compromise between Republicans and

preschool and care for older adults – and

Democrats for the past generation.

what percentage of their working-age

time was a matter of costs and benefits,”

population is in the labour force.

Hillestad said. “The system is designed

In Scandinavian countries, working

“Using day care and working full

to keep us working. Maybe there are

parents have the option of heavily subsidised childcare. Leave policies make

Consider Marianne Hillestad

loopholes, but I could not sleep well at

it easy for parents to take off work to care

of Steinberg, Norway. She teaches

night if I was trying to cheat the system

for a sick child. Heavily subsidised public

kindergarten; her husband, Ruben Sanchez,

just to cash in social benefit cheques.”

transportation may make it easier for a

installs heating and ventilation systems.

person in a low-wage job to get to and from

Day care for their three children, ages four,

create flexibility so that a person on the

work. And free or inexpensive education

seven, and nine, works out to about $1,100

fence between taking a job versus staying

Collectively, these policies and subsidies

at home to care for children or parents

may make it easier to get the training to move from the unemployment rolls to a job.

may be more likely to take a job.

More people may work when countries offer public services that directly make working easier, such as subsidised care for children and the old; generous sick leave policies; and cheap and accessible transportation.

In the United States, the major policies aimed at helping the working poor are devised around tax subsidies that put more cash in people’s pockets so long as they work, most notably through the Earnedincome tax credit and Child Tax Credit.

“The United States doesn’t do much of anything in terms of supporting labour force participation via expenditures,” Kleven said.

“Being home with my children is a blessing” said Camilla Grimsland Os, a nurse in Oslo, Norway. “But I like my work, I like my colleagues. And I feel that I contribute when I go to work.”

It is probably overly simplistic to attribute the very high employment rates in Scandinavia to a handful of policies that encourage work, as Kleven himself concedes; he is “more trying to raise a puzzle” than to provide a definitive answer.

Where Despite Higher Taxes andand Welfare WHEREMore moREWork WoRk dEspitE HigHER taxEs WElfaRE

There are countless differences between Northern European countries and the rest

The countries countries with withthe thehighest highestrates ratesof ofparticipation participationininthe thelabor labour force The force tend to to have have higher higher taxes taxes and and more moreextensive extensivesocial social welfare welfarespending. spending. tend 85%

Switzerland

Austria

80

Higher employment rate

70

65

Britain

Slovenia Portugal Australia

other factors that lead more Northern Americans.

Finland

New Zealand

Robert Greenstein, the president of the

France

Centre on Budget and Policy Priorities, notes that wages for entry-level work are

Luxembourg Estonia

S.Korea

And this analysis may leave out some

Neth.

Europeans to join the workforce than

Canada

Czech.

United States

to work, especially women.

Denmark

Germany

Japan

75

the like. The Scandinavian countries may have cultures that encourage more people

Norway Sweden

of the world beyond childcare policies and

much higher in the Nordic countries than

Belgium

Slovak.

Greece

in the United States, reflecting a higher minimum wage, stronger labour unions

Chile Poland Israel Ireland

40

pay. Perhaps more Americans would

Italy

Spain

30%

and cultural norms that lead to higher enter the labour force if even basic jobs

Hungary

50

60

70

80

90

Higher effective tax rate Note: The effective tax rate is more precisely known as the “participation tax rate” and captures both tax burdenThe andeffective loss of welfare benefits for aprecisely worker earning Note: tax rate is more knownaverage as thewages. “participation tax rate” and

captures both for tax burden and loss of welfare a Jacobsen workerKleven, earning wages.

Source: Organization Economic Cooperation and Development databenefits analyzed by for Henrik Londonaverage School of Economics Source: Organization for Economic Cooperation and Development data February 2015 analyzed

by Henrik Jacobsen Kleven, London School of Economics

THE NEW YORK TIMES

paid that well, regardless of whether the United States provided better childcare and other services. The employment subsidies that Kleven cites surely help coax more Scandinavians into the work force,

Employment

36

Clockwise: Marianne Hillestad, a kindergarten teacher and the mother of three, helps her daughter Isabelle, seven, prepare for a holiday event in Oslo; Ruben Sanchez, a father of three, works on a ventilation system in Asker; Camilla Grimsland Os and her husband, Hakon Os, with their children, Ivar, three, and Tellman, six months, at home in Oslo.

to, or spend it on whatever else you need. Do we effectively want government subsidising the childcare industry for middle-class parents?”

If the United States were to subsidise childcare, that benefit would join tax subsidies of employer-provided health insurance, home mortgages and retirement savings as policies that tend to favour the middle and upper-middle class.

Greenstein agrees, but shouldn’t be viewed in isolation. “You get into trouble when you cherry-pick things,” Greenstein said.

But even conservatives can see some useful lessons in the Scandinavian system.

“I’ve advocated expanding transportation options for low-income workers in order to help them get to work, and I

Perhaps more Americans would enter the labour force if even basic jobs paid that well, regardless of whether the united States provided better childcare and other services.

Every country has a mix of taxes, welfare benefits and policies to promote work that reflects its politics and culture. In the large, diverse United States, there is deep scepticism of social welfare programmes and direct government spending, along with a greater commitment to keeping taxes low.

So for reasons intertwined with politics and history, the United States has relied on

think everybody agrees that we could

a different set of policies aimed at helping

do better with education,” said Michael Strain, a resident scholar at the American

effect, the US system of tax credits for the

workers get a leg up. But as policymakers

Enterprise Institute. “I think the

working poor allows people to make their

around the world try to encourage growth

Scandinavian countries do those things

own choices over how to use the money,

by increasing the proportion of their

well, and there are certainly things we

whether for childcare, food or clothing.

populations with jobs, there is a lesson

“I’m more in favour of the child tax

from Scandinavia useful in its simplicity:

But that outlook changes, he argues,

credit,” Strain said. “You can spend the

If you make it easier for people to work, it

when looking at subsidised childcare. In

child tax credit on childcare if you want

may be the case that more will.

can learn.”

Portfolio

38

Portfolio

Dutch Flower Power Wanes

The Netherlands has long been at the heart of the international flower trade, but that is starting to change, reports Christopher Schuetze.

E

ach weekday morning, the buyers descend on Aalsmeer,

gerbera to kangaroo paws, roses and, of

internet connection and a buyer’s license

course, the famed Dutch tulips.

can bid via computer at the auction

Then, from nearby Schiphol airport, the flowers can be sent across the planet.

Today, more than half of the world’s cut

without actually having to come and inspect the stems.

“It was more fun 10 years ago,” Marco

flowers are bought and sold at the auction

Schouten, a buyer for FloriBizz who

here, which has been the hub of the global

purchases roses for florists in Italy and Spain,

flower trade since the early 20th century.

said during a break in the bidding one recent

But that system, which helped make

morning. “There was noise and friendship.”

flowers as synonymous with the Dutch

Even so, the flower industry – still more

identity as wooden shoes and windmills,

than five per cent of the Netherlands’ gross

is in the midst of an upheaval, buffeted

domestic product – has been remarkably

by changes that are revolutionising the

resilient, adapting to its changing climate

business and upending traditions.

far faster than many of its flowers have.

“We’ve had this system that has been

Geert Hageman, a veteran tulip grower,

very dominant for more than a hundred

explained why, for instance, Triflor, his

years that is more or less changing or

tulip business, had not suffered even

disappearing,” said Herman de Boon,

during Europe’s lingering economic

the chairman of the Dutch Flower

troubles. Because people have less money

Wholesale Association.

to pay for vacations and evenings out,

Concerns about carbon dioxide

he said, they tend to stay home, where

emissions and the cost of jet fuel

they crave a relatively cheap luxury in

of Amsterdam, arriving at an enormous

have steadily squeezed the global

a time of austerity. “In Europe, if you

warehouse covering some two million

transportation network, even as more

square metres. They squeeze onto

growers have moved from Europe to

benches, glare at computer screens and,

warmer, and less expensive, climates in

with the push of a button, bid on an

Africa in the last decade. Then there has

encyclopaedic array of flowers: everything

been the growth of presales and direct

from amaryllis, chrysanthemums and

shipping. Today, virtually anyone with an

© 2014 New York Times News Service

about a half-hour southwest

February 2015

Opposite page: Roses in a crate at FloraHolland, the cooperative that represents Dutch and international growers. Below: Flower buyers track the ongoing auction at FloraHolland.

Industry

39

Industry

40

Clockwise: Flower auction at Bloemenveiling Aalsmeer ( VBA ): an international platform for the trade with flowers and ornamental plants; A researcher checks roses for diseases at the FloraHolland flower auction; General view of a flower transit hall of the FloraHolland flower auction.

don’t have flowers in the house, it just

from 5,100. At the same time, profits grew

looks naked,” Hageman said, surveying

to ¤4.5 billion (about $5.6 billion) a year

the work of a half-dozen workers pulling

from ¤4.1 billion, in transactions for 12.4

young tulips from movable flower beds at

billion plants and flowers each year.

one of his greenhouses in Oude Niedorp,

While that total has remained relatively

a tiny village about an hour north of

consistent, the number of items traded

Amsterdam. He also pointed to the

at the Aalsmeer auction has actually

opening of fresh markets to satisfy the

decreased. Last autumn, FloraHolland

growing middle classes of Eastern Europe

stopped sending its cut flowers to the

and Russia. “They love flowers over there

6 am. Carefully, they watch an enormous

– it’s really nice,” Hageman said happily.

clock that sets the price for flowers,

“in europe, if you don’t have flowers in the house, it just looks naked.”

counting down usually from one euro per

expensive greenhouses, have been pruned

Aalsmeer auction rooms, to keep them

jealously guarded. A female photographer

from the marketplace in recent years.

But while big Dutch producers like Triflor, which can grow 1.2 million stems at a time, are doing well, many smaller

tells the auctioneer how many buckets he wishes to purchase at the price selected.

The bidding is concentrated and

growers, especially those that depend on

Photos: Getty Images

stem. The buyer who pushes a button first

fresher for longer. Not long ago, such a

sent by The New York Times was denied

The cooperative FloraHolland

move would have been inconceivable. As

access to the front of the trading floor,

represents Dutch and international

recently as a decade ago, virtually all cut

unlike a male colleague, who had been

growers and runs auction and distribution

flowers sold to wholesalers were sold here.

granted access. An official FloraHolland

centres. It says that from 2008, when

Last year, only half were.

guide working in the auction’s public

the financial crisis started, to 2013, its membership dropped to 4,600 growers

Buyers still come to examine flowers in cooling rooms before the auction starts at

relations department said that the photographer would distract the buyers, Portfolio

41

who are overwhelmingly men. But more of them are buying at a distance, with

benchmark to set prices for new varieties.

Likewise, more of the flowers,

such as the German discount chain Lidl or the British supermarket giant Tesco,

growers supplying digital photos and data

particularly roses, grown by producers

which prefer fixed contracts to the daily

on the length, size and health of flowers.

who have migrated to Africa or elsewhere

fluctuation of the auction clock.

Hageman estimated that 40 per cent

never actually see the auction hall. “The

of his tulips were now sold before they

energy cost and the labour cost are the

Such changeS are challenging

were grown and harvested, which he

main reason that the roses are grown in

the status of the Netherlands as the centre

said helped him plan for peak periods

Africa these days,” said Arie van den Berg,

of the flower trade. And still more are on

like Valentine’s Day and Mother’s Day.

a second-generation Dutch rose grower

the horizon.

He rarely goes to the auction now, he

who has shifted the bulk of his production

said. Instead, he follows the action from

to Kenya and China. His company,

about 80 kilometres southeast of

a terminal in his office, which shows the

Van den Berg Roses, still tends to grow

Amsterdam, are working on ways to

clock and the price his tulips fetch in

its exotic and valuable flowers in the

keep cut flowers in shipping containers

Aalsmeer, some 48 kilometres south.

Netherlands, where daily shipping to the

for several weeks by putting them in

auction centre is less challenging.

near-freezing temperatures. While the

Still, “the auction clock is really important,” he said. “It will stay with us.” He explained that it gave him and his colleagues a

But cheaper roses are mostly grown in Africa and sold directly to big retailers,

Researchers at Wageningen University,

technology is still in the testing phases, it could eventually allow growers to send flowers by boat rather than plane.

Eric van Heck, a professor at the Rotterdam School of Management, said that even though the Dutch flower auction might be on the wane, the logistical and financial services that have long made it vibrant may yet allow the Dutch to prevail.

“It’s about connecting and creating a digitised platform to trade flowers,” he said.

“You can’t make your living in the physical boundaries of the Netherlands.”

Left: Geert Hageman in a greenhouse at Triflor, his tulip business, which can grow 1.2 million stems at a time.

Below: Arie van den Berg has shifted the bulk of his production to Kenya and China.

February 2015

Commodities

42

© 2014 New York Times News Service

The Commodity Cycle China’s insatiable appetite for Latin America’s raw materials fuelled a boom, but now slowing demand is having major economic repercussions, reports Eduardo Porter.

Portfolio

43

F

“The commodity boom allowed

ew people are as intensely worried about the slowing

governments and companies to avoid hard

Chinese economy as Latin

choices,” Andrés Velasco, Chile’s finance

Americans. China not only buys nearly

minister from 2006 to 2010, told me. “For

40 per cent of Chile’s copper, but its once-

goodness’ sake, even Argentina grew by five

insatiable demand helped push copper

to six per cent per year for almost a decade.”

Copper is back under $3. As commodity

prices from $1 to $4 for a half-kilogram.

prices continue to swoon, driven in large

Meanwhile, Beijing ploughed billions into Peruvian mines and fisheries and

part by China’s weaker demand, the going

spent billions more buying soybeans from

will get much tougher. That’s especially

Argentina and Brazil. And it propped up the

true in the major oil exporters, clobbered

Venezuelan government to the tune of $50

by a collapse of oil prices driven by a

billion in loans, to be paid in shipments of oil.

combination of faltering global demand and increased supplies from the United

China’s voracious hunger for Latin

States and elsewhere.

America’s raw materials fuelled the region’s most prosperous decade since the 1970s. It

Venezuela, notably, is in free fall. The

filled government coffers and helped halve

IMF expects the Venezuelan economy to

the region’s poverty rate. That era is over.

contract both this year and next. And it

For policymakers gathered in Santiago,

has been forced to limit its promised oil

Chile, in December for the International

shipments to China, in effect defaulting

Monetary Fund’s conference on challenges

on its Chinese debt.

But the commodity decline isn’t sparing

to Latin America’s prosperity, there seemed to be no more clear and present danger

many. “Growth in Latin America should

than China’s slowdown.

move back to pre-commodity-boom rates,”

Riding China

China’s insatiable demand for raw materials brought greater prosperity to Latin America. But it also stunted the region’s industrial development.

Chinese imports from Latin America $1.2 billion

Chinese exports to Latin America

TOTAL

$1.2 billion

TOTAL

1.0

1.0

0.8

0.8

RAW MATERIALS

0.6

MANUFACTURED GOODS

0.6

0.4

0.4

0.2

0.2

0

0

’00

’05

’10

’13

’00

’05

’10

’13

Manufacturing as a share of gross domestic product Selected Latin American countries 25%

ARGENTINA

BRAZIL

CHILE

COLOMBIA

MEXICO

PERU

20 15 Latin America average

10 5 0 ’90

’13

’90

’13

’90

’13

’90

Sources: World Bank; Economic Commission for Latin America and the Caribbean

February 2015

’13

’90

’13

’90

’13

THE NEW YORK TIMES

Commodities

44

said Alejandro Werner, who leads the

Clockwise: China’s insatiable hunger for Latin America’s raw materials fuelled the region’s most prosperous decade since the 1970s, but that era is over; The El Teniente copper mine near Rancagua; Chinese firms are building infrastructure across Latin America; Wang Jing is the chairman of a Chinese company that plans to build a rival to the Panama Canal.

Western hemisphere division at the IMF. Indeed, the fund expects the region to grow barely 1.3 per cent in 2014, a third of its pace just three years ago.

The bust underlines how Latin American economies have failed to overcome the existential weakness that has plagued them throughout history:

“imperialist” power like the United States

a dependence on raw materials that has

or the European colonial powers who ruled

shackled the region’s development to an

for centuries and served as the first foreign

incessant sequence of booms and busts.

exploiters of Latin America’s mineral wealth. To many in Latin America, the

From Brazil and Argentina in the

difference hardly seems relevant.

southern tip of the region to Mexico in the north, officials across Latin America

Take San Juan de Marcona, a remote

fretted for years that China undermined

village on the edge of the Pacific Ocean in the Nazca region of Peru. Built in the

their decades-long efforts to build the manufacturing industries that, they

share of raw materials in Latin America’s

1950s to house workers at the vast open-

hoped, would provide a ticket into the

exports, which had fallen to a low of 27

top US-owned iron mine, the town no

developed world. Not only did China’s

per cent in the late 1990s, from about 52

longer houses managers from the United

cheap labour outcompete Latin American

per cent in the early 1980s, surged back

States. In the 1970s, General Juan Velasco

industry and draw the lion’s share of global

to more than 50 per cent on the eve of the

Alvarado, then Peru’s military dictator,

manufacturing investment. Its appetite

global financial crisis.

booted them out. Today, Marcona’s managers come from China’s Shougang,

for Latin America’s minerals, oil and agricultural products raised the value of

China’s footprint on Latin

which bought it from the Peruvian

currencies around the region, making their

America is contributing to what Harvard

government in the 1990s.

manufactured goods even less competitive.

development expert Dani Rodrik would

Photos: Getty Images

“A growing China was very important

call its “premature deindustrialisation,”

to bring Peru along in the last 10 years,”

America’s economic output has declined

shutting off the standard path of economic

said Cynthia Sanborn, who leads the

steadily for more than a decade, ever since

development followed by pretty much

Research Centre at the Universidad del

China inserted itself aggressively into the

everybody since the industrial revolution.

Pacífico in Lima.

Manufacturing’s share in Latin

global economy by entering the World Trade Organisation. At the same time, the

China’s diplomats emphasise that it is a developing country, not an advanced,

North of Marcona, Chinalco built a town to relocate 5,000 inhabitants of Morococha, Portfolio

45

Officials across latin america fretted for years that china undermined their decades-long efforts to build the manufacturing industries that, they hoped, would provide a ticket into the developed world. your comparative advantage.”

In some bits of the region, however, China has inspired a nostalgic reinterpretation of its economic history and a re-examination of the policy choices of its past.

Remember “Dependency Theory”?

The doctrine, which spread across Latin America from the 1950s through the 1970s, proposed that the region, or any developing country for that matter, could never advance simply by selling natural resources to the rich North, using the money to import the North’s industrial goods. Import substitution, behind a wall of trade barriers, was the path to prosperity.

The theory fell into disrepute during Latin America’s “lost decade” of the 1980s – blamed by a new crop of marketwhere it will blast open a new copper

its blessings. “The concerns of dependency

oriented, US-trained leaders in the

mine. Last year, China’s MMG, Guoxin

are there, but if China weren’t there, Peru

1990s for turning the region into an

International Investment and Citic Metal

would be seeking other markets for its

uncompetitive backwater. Courtesy of

bought the Las Bambas copper mine from

minerals,” Sanborn told me.

China, it’s back, fine-tuned to adapt to a

the Anglo-Swiss conglomerate Glencore.

Chinese companies are interested not only in raw materials but also in vast public

Werner of the IMF argues that the case for deindustrialisation is overblown.

“From a medium-term perspective,

more integrated global economy.

“We’re not calling for more protectionism, but to substitute imports

works to transport the raw materials,

China is a plus, plus, plus for Latin

within competitive open economies,” said

including rail links across Brazil and a

America,” he said.

Alicia Bárcena, who leads the United Nations’ Economic Commission for Latin

proposed $50 billion, 275-kilometre canal across Nicaragua. In 2010, Chinese lending

In agrIculture, for instance,

America and the Caribbean. “We must

to Latin America roughly equalled that

exports to China are leading to lots of

think of creating regional production

of the World Bank, the Inter-American

innovation and efficiency improvements.

chains to serve regional markets.”

Development Bank and the US Eximbank

Demand for Brazil and Argentina’s soy

Bárcena suggests that while China

combined. (It has since slowed.) Carmen

– a principal source of animal feed – is

should still be invited to participate in

Reinhart of Harvard forecasts that China

unlikely to wane as the Chinese become

Latin America’s development, this should

could become Latin America’s main source

richer and eat more meat.

happen on different terms: “You want our

of financing.

Perhaps Latin America should just count February 2015

“Don’t bet against nature,” Werner urged policymakers in the region. “Play to

commodities? OK. But also invest in solar panels here,” she proposed.

46

China’s Bewildering Brands Branding was not at the forefront of most Chinese companies’ thinking when they started out, which now leaves them at a disadvantage, reports Dan Levin.

C

hrisdien Deny, a retail chain with

foreign powers,” said Cheng Wei, 37, who

more than 500 locations across

was recently at a Beijing mall buying winter

China, sells belts, shoes and

clothes at Chocoolate, a Hong Kong casual

clothing with an “Italian style” – and a logo

wear outlet, where Chinese characters were

with the same font as Christian Dior’s.

absent from all but one store logo.

Helen Keller, named for the deafblind US humanitarian, offers trendy

and real estate is slumping, consumption

sunglasses and classic spectacles at over

is a bright spot in the Chinese economy.

80 stores, with the motto “You see the

In the first 11 months of 2014, retail sales

world, the world sees you.”

grew by 12 per cent over the previous

Frognie Zila, a clothing brand sold

© 2014 New York Times News Service

At a time when manufacturing is cooling

year to 23.66 trillion renminbi ($3.8

in 120 stores in China, boasts that its

trillion), according to the National Bureau

“international” selection is “one of the

of Statistics. The government considers

first choices of successful politicians and

consumer spending so vital that Prime

businessmen” and features pictures on

Minister Li Keqiang in November declared,

its website of the Leaning Tower of Pisa

“Let the people be able to consume, dare

and Venetian canals.

to consume and be willing to consume,”

Eager to glaze their products with the sheen of international sophistication, many

according to the state news agency Xinhua.

But some Chinese appear loath to

homegrown retail brands have hit upon

spend their disposable income on locally

a similar formula: choose a non-Chinese

produced fashions.

name that gives the impression of being foreign. “You could call it fawning on

“Buy Chinese brands? Never,” said Fu Rao, 20, a university student, who was Portfolio

browsing the clothes at the Japanese

of China Goes West, a book that charts the

outlet store Snidel in an upscale Beijing

efforts of Chinese companies seeking to

mall one recent evening. Fu complained

build international brands.

that Chinese products were shoddily made

In China, many Western brands have

and lacking in style. “Foreign stuff is so

chosen a Mandarin-language name that

much better,” she said.

will convey relevant qualities to consumers,

As Chinese retail companies try

like Coca-Cola, whose Chinese brand name

to attract consumers, mystifying

– Kekoukele – translates as Tasty Fun.

maladaptations of English have spread

Other foreign brands such as Cadillac, or

across the country’s storefronts, shopping

Ka di la ke in Mandarin characters, stick

bags and clothing labels. Wanko,

with a phonetic transliteration that has

Hotwind, Scat, Orgee and Marisfrolg

no Chinese meaning, thus signalling their

(the L is silent) all sell clothing. A sponsor

foreign cachet.

of China’s national golf team is the apparel chain Biemlfdlkk.

Some local companies have gone the same route, employing phonetic if meaningless brand names to obtain a

If ChInese companies have stumbled in

foreign-sounding flair, even though they

the branding race, that is because few ever

are actually homegrown.

gave it much thought. For years, as China’s

The golf apparel brand Biemlfdlkk,

economic growth soared into the double

sold in over 450 Chinese stores, goes

digits, branding was largely considered a

by Biyinlefen in Mandarin, using four

low-priority marketing decision left to top

characters that translate literally as

executives far more concerned with the next

“compare music rein fragrant.” While the

product introduction than with building

name may be ambiguous by design, it can

long-term value, said Joel Backaler, author

make creating a uniform brand identity difficult. A Biemlfdlkk saleswoman in the southern city of Guangzhou explained, “It’s a German name.”

An employee at another Biemlfdlkk shop had a different explanation: “It’s the name of a French designer.”

Western brands have chosen a Mandarin-language name that will convey relevant qualities to consumers, like Coca-Cola, whose Chinese brand name – Kekoukele – translates as Tasty fun.

February 2015

Branding

47

Branding

48

Rather than create distinct branding, other local companies have chosen simply

employee recruiting materials.

Chinese brand names have stoked

After three years of pressure by African-Americans, religious groups

to mimic well-known foreign brands.

international controversy in the past.

and shareholders who found the brand

“Chinese brands copy because they believe

One of China’s most popular toothpaste

derogatory, Colgate made the logo more

it enables them to get an easy, quick

brands is known as Darlie in English but

racially ambiguous and changed the

win,” said Vladimir Djurovic, president

Hei Ren, or Black People, in Mandarin.

English name to Darlie, though the

of Labbrand Consulting Co. in Shanghai.

In 1985, Colgate-Palmolive bought 50

Mandarin remains unchanged. “Colgate

“They play on the confusion.”

per cent of the Hong Kong company that

is committed to demonstrating respect

owned the brand, which was then called

to all people,” the company has said in a

Clio Coddle has a green crocodile logo

Darkie in English. Its logo was a grinning

statement on its website. “We understand

reminiscent of Lacoste. Across China,

minstrel in blackface wearing a top hat,

that there are different perspectives on the

sneakers are emblazoned with Adidos, Hike,

tuxedo and bow tie.

Chinese language brand, and we continue

The knockoff casual wear brand

Cnoverse and Fuma – featuring a smoking

to consider these perspectives in our

puma – and there are SQNY batteries and

discussions with the Hong Kong founders.”

Johnnie Worker Red Labial whiskey.

Helen Keller glasses would probably have a hard time selling overseas, too.

“Chinese brands copy because they believe it enables them to get an easy, quick win.”

Though the company’s website includes a lengthy biography of Helen Keller, it omits all mention of the disabilities she worked hard to overcome. Reached by phone, a brand manager found nothing problematic about the omission. “So she’s blind and deaf – her personal

Reached by phone, a Chrisdien Deny

shortcomings are not related to the spirit

representative denied that the brand was trying to piggyback on the reputation of Christian Dior, which has dozens of stores in China. “I’ve never heard of that company,” said the representative, who declined to give her name.

Christian Dior declined to comment.

Chrisdien Deny has no Chineselanguage brand name and is a subsidiary of Huayu Group Holdings Ltd., based in Guangzhou. Huayu claims to be the Far East distributor of the “century-old European brand” Chrisdien Deny, according to its

Portfolio

49

of our brand,” said the woman, who gave Left: Haier is a rare local brand that has succeeded in the hi-tech market abroad.

Below: Despite opening stores in the United States and spending heavily on US advertising, sportswear maker Li Ning reported net losses.

Rest: Malls in China are full of stores whose names could pass for foreign – at times, in deliberately confusing ways.

only her surname, Jiang. “These products help you love and protect your eyes. Why would that be offensive?”

Facing rising labour costs and increased competition, businesses are now thinking more carefully about brand identity, analysts say. “Yesterday’s strategy is no longer effective,” said Backaler, the China Goes West author.

Labbrand has developed over 200 brand names for Western companies entering the Chinese market and Chinese companies looking to build global brands. Labbrand’s president, Djurovic, said the company’s work creating brand names in the Latin alphabet has increased significantly in recent years, suggesting that Chinese companies are beginning to realise they cannot just transliterate their Mandarin brand names or mimic Western ones if they hope to win the loyalties of customers, not just in China but also around the world.

So far, only a few domestic brands have succeeded abroad, mostly in high tech. One notable exception is Haier, the world’s top electronic home appliance brand for the last five years, according to the market research firm Euromonitor International.

The Chinese sportswear maker Li Ning, based in Beijing, has not been as fortunate.

Despite opening stores in the United States and spending heavily on US advertising, the company reported net losses of $75 million in the first half of 2014.

At home, one of the toughest challenges for local brands is Chinese consumers themselves. Suby Zhou, 27, said she did not see much difference between local and foreign brands. “Everything’s so international now,” she said while shopping in Beijing.

Still, the power of foreign branding has left an indelible impression. Zhou could easily rattle off foreign brands she liked, among them Zara and H&M, but when asked about favoured Chinese brands, she drew a blank.

“I can’t think of any,” she said.

February 2015

Aviation

50

Portfolio

51

Longer Odds for a Jet Canadian firm Bombardier is taking a high-stakes gamble with its CSeries jet, reports Ian Austin.

I

f all had gone according to plan,

company is on track to spend $4.4 billion

Bombardier’s direct challenge to

to develop the plane.

the Boeing 737, the world’s best-

Bombardier, which has yearly revenues

approaching its second year in service.

of about $18 billion. But it does make

Instead, Bombardier’s grand plan for a

the company vulnerable. The delays have

new plane, the CSeries airliner, has faced

depressed Bombardier’s share price. And

myriad delays.

because airlines pay for planes on delivery,

There have been unspecified supplier problems, design changes and last winter’s horrible weather. Then in May at an

company’s credit.

The payoff for Bombardier could be significant if the plane proves a serious

innovative new engines exploded during a

competitor to the 737 and the Airbus

ground test, damaging a prototype.

A320, the European company’s highest volume airliner. Already the world’s largest

passengers won’t step aboard a CSeries

rail producer and a leader in commuter

jet until 2016, although the company is

and business jets, Bombardier could

standing by its forecast of late 2015.

become a major player in civil aviation if

While delays are common in the aviation business, the time lost has made

the CSeries succeeds.

“It would be hard to predict where

it all the more difficult for Bombardier

Bombardier is today if I went back to

to take on its notoriously aggressive and

when I started,” said Pierre Beaudoin,

vastly larger rivals, Boeing and Airbus.

Bombardier’s president and chief executive,

Those industry giants have rushed to

who in 1985 joined the company founded

create versions of their existing single-

by his grandfather. “Investments like the

aisle planes that steal CSeries’ thunder

CSeries give us that opportunity again to

by incorporating many of its innovations,

double the size of the company.”

particularly better fuel economy. © 2015 New York Times News Service

any further delays could squeeze the

airport outside Montreal, one of the plane’s

Now, many analysts expect that the first

February 2015

The bet on the CSeries won’t break

selling commercial plane, would be

“They’re in a street fight,” said Addison

Bombardier has a history of transformation. Back home in Quebec,

Schonland, a partner at AirInsight, a

Bombardier is still celebrated as the

commercial aviation consulting firm.

company that ended rural isolation early in

Bombardier’s project has long passed

the 20th century when winter cut off many

the point of no return. Hundreds of

towns outside the reach of trains. The

planes have been ordered. Production

solution from Joseph-Armand Bombardier,

is slowly rumbling up to speed. The

Beaudoin’s grandfather, was a tracked,

Aviation

52

Clockwise: The passenger cabin of an environmental simulator for the CSeries CS100, a narrow-body twin-engine medium-range jet; Pierre Beaudoin, chief executive of Bombardier, at the company’s offices in Montreal; The Pratt & Whitney engines promise fuel savings of up to 20 per cent; The first CSeries CS300, at Bombardier’s plant in Mirabel, Quebec.

scarab-shaped snowmobile. After World War II, as Quebec introduced widespread road clearing, Bombardier survived and prospered by selling the Ski-Doo snowmobile as a winter toy for adults.

That coincided with Montreal’s glory years when it embarked on a variety of megaprojects. Laurent Beaudoin, the founder’s son-in-law, father of Pierre and the company’s chairman, reopened a

remember the cartoon in the paper: It was

a market segment that, in conventional

shuttered Ski-Doo factory to build the cars

a flying Ski-Doo,” Beaudoin said. “What do

aviation wisdom, does not exist.

for one of those plans: the city’s new subway.

these people know about aerospace?”

He then aggressively landed a contract to

Before its sale to Bombardier, Canadair

Bombardier committed to the CSeries programme in 2007 after an air travel

supply New York with subway cars. The

was exploring how to turn its executive

study that it commissioned. The study

$1 billion deal was more than double the

jets into regional jets, which could

showed, according to Beaudoin, a

company’s total revenue at the time.

replace propeller planes on routes feeding

growing impatience among travellers to

passengers from small centres into airline

route through major hubs on the way to

came in 1986. Bombardier was the

hubs. During the 1990s, Bombardier

their final destination. Those hubs give

only bidder for Canadair, an ailing

and Embraer of Brazil blindsided the

airlines greater economies of scale. But

aircraft manufacturer that the Canadian

aviation industry by successfully creating

Bombardier calculated that a new efficient

government put up for sale. Pierre

that market.

airliner slightly smaller than a 737 or an

Laurent Beaudoin’s biggest gamble

Beaudoin recalled that Bombardier was widely criticised as overreaching. “I

Beaudoin sees the CSeries as a repeat

A320 – one with 100 to 150 seats – could

of its regional jet story. That is, a plane for

carry passengers directly between smaller airports at the same cost per seat as the larger planes.

The linchpin for the CSeries was a new concept for engines developed by Pratt & Whitney, known as a high bypass geared turbofan. The new engine design promised fuel savings of up to 20 per cent and unusually low noise levels.

A trip out to the enormous factory in Mirabel, Quebec, where the CSeries is being built, reveals that the plane is as much a technology gamble as a financial one. Inside the assembly hall, two towering robots join wings, nose and tail pieces made from lightweight carbon-fibre composites to traditional aluminium fuselage sections. Tucked in another Portfolio

53

Bombardier has a history of transformation. Back home in Quebec, Bombardier is still celebrated as the company that ended rural isolation early in the 20th century when winter cut off many towns outside the reach of trains.

that Bombardier will reach its target of 300 orders before deliveries begin. The company has about 200 firm orders.

Many of those buyers, he expects, will be part of the plant, a complete cockpit is

problems, its two rivals introduced versions

new carriers drawn by the plane’s ability

connected to a room filled with computers.

of their smallest planes equipped with

to avoid hubs. The programme’s credibility

The CSeries is Bombardier’s first “fly by

similar engine technology. Embraer has

has mainly come from an order for 30

wire” plane; the only connections between

also joined the field with a stretched-out

planes from German airline Lufthansa and

the cockpit’s controls and the parts they

regional jet.

one for 40 from Macquarie AirFinance.

command are electronic.

Bombardier may find it difficult to carve

“The two big manufacturers have

As he walks briskly through the plant,

out space, given the preference among

spent their time saying that we won’t

Robert Dewar, a Bombardier vice president

many air carriers to stick with a single

have an airplane, that the airplane won’t

who is general manager for the CSeries

aircraft-maker, according to Richard

fly,” Beaudoin said, referring to Boeing

project, acknowledged that the new

Aboulafia, vice president for analysis at

and Airbus. “You can imagine now that

technologies, particularly fly-by-wire,

the Teal Group, an aerospace and defence

the spotlight will be on the reliability of

contributed to the delays. The engine’s

industry analysis firm. More important, he

the airplane.”

failure in May, he added, eventually proved

said, Boeing and Airbus have a significant

to be caused by a relatively minor fault in

cost advantage.

an oiling system rather than a fundamental

But Beaudoin remains confident

“But, you know,” Beaudoin added with a small laugh, “I would be doing the same thing as they’re doing.”

design flaw.

Most analysts agree the plane, which will come in two models of different lengths ranging from 108 to 160 seats, represents an advance in airliner design. But that achievement, they add, is far from the end of the struggle.

“It’s a small company in Canada that has pulled off something that’s very impressive,” Schonland said. “Now, tell me Neither Boeing nor Airbus has ignored Bombardier’s challenge. Tom Williams, the chief operating officer of Airbus, has been particularly open about its plan to keep Bombardier out of the full-size airliner market. As Bombardier sorted through its February 2015

Photo: Getty Images/Bloomerg

how you are going to sell it.”

54

A

Superyachts Bring New Life to a French Port

supporting mounts, a massive

submerged boat elevator slowly

raised the 600-tonne, 51-metre-long yac M/Y Sky clear of the Mediterranean, gradually revealing its black matte hull.

When the entire ship, replete with

helicopter pad and five staterooms, reach

the height of the quay, it rode a motorise dolly sideways onto a grid of metal rails.

Then it rolled toward the giant work she 15 New York Times News Service

La Ciotat used to be a centre for shipbuilding but fell into decline. Today, it makes its living refurbishing superyachts for the rich and famous, reports Christopher Schuetze.

fter scuba divers checked the

where until March it will be cleaned,

repaired and painted in a makeover cost $2.3 million.

Though yachting’s high season is still

months away, winter is a busy time in th

picturesque town of La Ciotat in southea

Yachting

55

Opposite page: A yacht in dry dock on the Compositeworks shipyard in La Ciotat, France.

Left: A view of the busy shipyard from the harbour.

maintenance and refitting seaport, as

other skippers preferred to have yachts

economic comeback for La Ciotat, a town

measured by revenue.

refurbished at La Ciotat. (He would not

of 34,000 people.

Many of the world’s biggest, most expensive private yachts may be built elsewhere: Germany and the Netherlands

disclose the owner of the boat, which is registered in the Cayman Islands.)

The M/Y Sky belongs to a category

For more than a century, dating to the early 1800s, commercial shipbuilding provided the seaport’s economic lifeblood.

are the leaders in that business. Other

known as superyachts – usually defined as

During the glory days, well into the second

ports – including Barcelona, Spain, and

boats whose hulls at the water line measure

half of the 20th century, most of the

Genoa, Italy – do a brisk business in yacht

longer than 24 metres, or more broadly,

population would turn out to watch the

servicing. And some of the greatest yachts

private yachts that require a professional

launch of massive seabound vessels. When

never make their way to Monaco or the

crew to operate. The biggest might cost

a ship slid down the wooden ramps and

Côte d’Azur, or other playgrounds for the

$100 million or more, and measure

entered the water, it would create waves

rich and seaworthy.

140 metres from stem to stern. Experts

so big they often breached the protective

estimate that 5,000 superyachts are in

sandbags and flooded the surrounding

operation worldwide, and that more than

cafe terraces, sometimes even upending

one-fifth of those were purchased in the

parked cars.

But by dint of geography and history, La Ciotat is special.

“Being close to the centre of the yachting hub in the Mediterranean is very important,” said Philip Joyner, the captain of the M/Y Sky, explaining why he and February 2015

last five years.

To emerge as a global leader in superyacht repair represents a remarkable

“It was always a great spectacle,” said Alain Champeau, a retired school principal who jokingly claimed to be the only

Yachting

56

Clockwise: Ben Mennem, a co-founder of Compositeworks, at the shipyard; Workers renovate a yacht in dry dock at the Compositeworks shipyard; The Eden Theatre, the world’s oldest public cinema, where the Lumière brothers showed their early works; A picture of Jules Leveque, once a commander of a ship named after the town, hangs in a nautical museum.

Opposite page: (Top) A fisherman’s wife prepares swordfish for sale. (Below) The harbour in La Ciotat.

Nowadays, most of the yachts that

person his age in La Ciotat who was never

shipwrights, mast builders and other

employed by the yards.

craftsmen specialising in custom

heave up to La Ciotat for their beauty

sailboats and leisure motorboats started

treatments are motorised craft. Many

II, other parts of the world, particularly

arriving. They were drawn to the seaport’s

come for the periodic, thorough dry

Japan and South Korea, were able to

spacious docks, nautical infrastructure

dock inspections required for insurance

undercut European shipbuilders. The

and low rents.

verification, which usually entail repair and

But in the decades after World War

reconditioning. More extensive jobs, which

industry drifted away from places like La

Ben Mennem, a British shipbuilder, was a

Ciotat, whose main commercial shipyard,

co-founder of Compositeworks here in 1998,

might cost an owner tens of millions of

Chantiers Navals de La Ciotat, closed in

at first building small sailboats, starting

euros, involve more overhauling, updating

1986, putting about 6,000 people out of

with the 12.8-metre sloop Julia. “Back then,

or outright rebuilding.

work. Dockworker protests and social

the largest sailboat was 30 metres,” he said.

unrest became staples of news reports

“Now we frequently have boats over 100

LocaL officiaLs say the shipyards

in France, with La Ciotat held up as yet

metres that we work on. The dimensions

helped save La Ciotat. “You don’t develop

another example of how globalisation was

have changed tremendously.”

a city by turning your back on its history,”

hurting the country.

Although Compositeworks continued

said the city’s long-time mayor, Patrick

to build boats into the past decade, the

Boré, who was the shipyard pharmacist in

coming back to maritime life, as a small

company eventually shifted its focus purely

the old days. “Paris has its Eiffel Tower; we

and eclectic group of international

to refitting and conversion.

have the shipyard.”

But by the 1990s, La Ciotat had begun

Portfolio

57

sheds and maintain their own specialised carpentry and machine shops.

The port’s modernisation is paying off.

In 2007, 44 boats were hauled onto land for refitting, repair or conversion. Last year, nearly 220 yachts were lifted onto the docks. At any one time, as many as 50 yachts might be getting work done.

As part of La Ciotat’s comeback, the waterfront has been redeveloped over the last five years, with the addition of new hotels and long-term accommodations for crews and seasonal workers. Restaurants have replaced the many sketchy bars that once lined the harbour. The Eden Theatre, the world’s oldest public cinema and the site where the Lumière brothers showed their early films, was reopened in 2013 The port is run by a regional government

elevator, installed in 2007, which is capable

after extensive renovations.

Boré, now in his third term, has a plan

agency, and nearly three dozen companies

of hauling up boats that weigh up to

provide some type of yacht service. But the

1,800 tonnes. Nothing of its type is found

to restore the town’s historic district, whose

local industry is dominated by Monaco

closer to the luxury destination ports of

narrow streets, ancient houses and portside

Marine – the company refurbishing the

the Mediterranean. The elevator and an

charm is increasingly attracting visitors. At

M/Y Sky – and its larger friendly rival,

adjoining yacht parking deck cost roughly

the Maison de la Construction Navale, a

Compositeworks, which said it had revenue

$48 million, paid for by the government

meeting and museum space run by retired

of about $40 million last year. Together,

agency and Monaco Marine.

shipyard personnel, grainy films of ship

the shipyards employ about 700 people

A new crane, capable of lifting boats

launchings capture the excitement and pride of the past.

full time and work with another 700

weighing up to 300 tonnes onto another

subcontractors, with expectations of adding

parking deck, was installed and paid for by

hundreds more in the coming years if brisk

the agency and Compositeworks in 2009.

remembers out-of-work former shipyard

growth continues.

Both Monaco Marine and Compositeworks

hands picketing the gates when he and his

have built their own cavernous painting

team started working in the late 1990s.

An important draw is the underwater

Mennem, of Compositeworks,

“Eventually, it turned into a place where billionaires’ yachts go, so there’s a certain irony – but it’s created employment, so everyone is happy,” he said.

Even now, workers at Monaco Marine or Compositeworks are not part of any larger union, although as French companies they have worker representatives, as required.

The companies contend they are not anti-union, but the highly technical and international nature of the work they do is not conducive to organised labour.

Michel Chatail, who was a technical drafter at the former shipyards, was asked by a visitor if he missed the old days of La Ciotat. He did not pause in replying: “We are actually happy now. The young have jobs, and we are all retired.”

February 2015

Technology

58

H

Robotic Thai Food Taster

Thailand’s prime minister, Yingluck Shinawatra

repeatedly encountered a distressing problem: bad Thai food. Too often, she found, the meals she sampled at Thai restaurants abroad were unworthy of the name, too bland to be called genuine Thai cooking. The problem bothered her Š 2014 New York Times News Service

The e-delicious machine uses sensors to rate the quality of Thai food in an effort to lift the overall standard globally, reports Thomas Fuller.

opscotching the globe as

enough to raise it at a Cabinet meeting.

Her political party has since been thrown out of office, in a May military coup, but her initiative in culinary diplomacy lives on. At a gala dinner at a ritzy Bangkok hotel in October the government unveiled its project to

Portfolio

59

In a country of 67 million people, there are somewhere near the same number of strongly held opinions about Thai cooking. A heated debate here on the merits of a particular nam prik kapi, a spicy chilli dip of fermented shrimp paste, lime juice and palm sugar, could easily go on for an hour without coming close to resolution.

standardise the art of Thai food – with a robot.

Diplomats and dignitaries had been invited to witness the debut of a machine that its promoters say can scientifically evaluate Thai cuisine, telling

easily go on for an hour without coming

ingredients frequently yields a dish that a

the difference, for instance, between a

close to resolution.

Bangkok gourmand might describe in the

properly prepared green curry with just

But there does seem to be some

the right mix of Thai basil, curry paste

agreement on one point at least: Bad Thai

and fresh coconut cream, and a lame

food is a more acute problem overseas.

imitation thereof.

Thais, who can establish an immediate

Thai vernacular as “food even a dog would not swallow.”

Add to that a soupçon of culinary chauvinism, which holds that authentic

A boxy contraption filled with sensors

bond discussing where they will get their

Thai food can be prepared only

and microchips, the so-called e-delicious

next meal or the merits of particular food

by Thais, usually, Thai cooks say,

machine scans food samples to produce

stalls, complain that Thai restaurants

those who absorbed their cooking

a chemical signature, which it measures

overseas cater to non-Thai palates

acumen tugging on the apron strings of

against a standard deemed to be the

by pulling punches on spice and not

their grandmothers.

authentic version.

respecting the delicate balance between

The government-financed Thai Delicious Committee, which oversaw the

sweet, sour, salty and four-alarm spicy.

Ingredients like fresh tamarind, Thai

“There are many Thai restaurants all around the world that are not owned

by Thai people,” warned Supachai

development of the machine, describes

limes and galangal, an aromatic root

Lorlowhakarn, an adviser to the National

it as “an intelligent robot that measures

similar to ginger, are not readily available

Innovation Agency, which is in charge of

smell and taste in food ingredients

overseas and the substitution of inferior

the Thai Delicious programme. He added,

through sensor technology in order to

almost apologetically, “They are owned

measure taste like a food critic.”

by Vietnam or Myanmar, or maybe even Italian or French.”

In a country of 67 million people, there are somewhere near the same number of strongly held opinions about Thai cooking. A heated debate here on the merits of a particular nam prik kapi, a spicy chilli dip of fermented shrimp paste, lime juice and palm sugar, could February 2015

Opposite page: Sirapat Pratontep, a British-trained expert in nanotechnology who led the development of a food-analysis machine, at his lab in Bangkok.

Top: The Electronic Tongue, a machine prototype with the ability to taste and analyse food.

The agency has spent around onethird of its budgeted 30 million baht (around $1 million) on Thai Delicious, including around $100,000 to develop the e-delicious machine, according to Sura-at Supachatturat, a manager at the agency.

Technology

60

One element of the programme is a direct result of Yingluck’s travels. On

the machine evaluates food by measuring its conductivity at different voltages.

Readings from 10 sensors are combined to produce the chemical signature.

“We wanted the cheapest and easiest approach to measure food,” said Sirapat Pratontep, a British-trained expert in nanotechnology who led the development of the machine.

a visit to New York she noticed the

$18,000 apiece to Thai embassies in countries with many Thai restaurants.

The machine evaluates food by

sanitation inspection system in which

measuring its conductivity at different

letter grades are pasted on restaurant

voltages. Readings from 10 sensors

windows, according to a former aide,

are combined to produce the chemical

and wondered whether Thailand could

signature. “We wanted the cheapest and

develop a similar system to shame

easiest approach to measure food,” said

Thai restaurants into making tastier

Sirapat Pratontep, a British-trained

food. So Thai Delicious offers a logo

expert in nanotechnology who led the

that restaurants can affix to their

development of the machine. “You just put

menus as long as chefs use officially

in the food and you get a rating.”

sanctioned recipes.

As even computers cannot judge taste,

Thai Delicious has also produced a

the food is compared to a standard

free app that includes recipes approved

derived from a database of popular

by a government committee. So far, the

preferences for each dish. For tom

committee has approved about 10 recipes,

yam, the spicy soup infused with Kaffir

three of which have been published on the

lime leaves and coriander, for instance,

Thai Delicious app.

researchers posted notices at the prestigious Chulalongkorn University

The Thai Delicious Committee, which includes government officials, scholars,

But the tasting machine is the

in Bangkok, requesting 120 tasters. The

a chef and a food critic, also receives

real novelty. Nakah Thawichawatt,

tasters – students, university staff and

financing from private companies that are

a businessman who is trying to

area workers – were paid a few dollars

partners in the project.

commercialise it, hopes to sell it for

each for their trouble. They were served

Portfolio

61

Opposite page: A traditional street restaurant in Bangkok.

Left: A typical restaurant located in one of the many food alleys.

Below: A plate of Thai green curry in the Nanotec lab after being analysed.

10 differently prepared soups and rated each one.

The winning soup was declared the standard, and its chemical coordinates programmed into the machine. As a greater number of tasters’ opinions are programmed into the machine, it will be able to judge whether a dish is too salty or spicy or has other flavour defects, Sirapat said.

A reporter who visited the laboratory where the machine is being developed brought green curry prepared in the kitchens of the Foreign Correspondents’ Club of Thailand. A sample was placed in the stainless-steel tray, the machine made a whirring sound, and moments later issued a score of 78 out of 100.

“Normally we say that anything lower than 80 is not up to standard,” Nakah said. He hypothesised that the club might be catering to foreign tastes. “Maybe because foreigners eat there they prepare it differently,” he said.

Traditionally, the main laboratory of Thai cuisine is the street. Legions of roadside chefs – many of whom have fanatic followings but have never used a measuring cup, let alone followed a written recipe – work in kitchens that often consist only of a large wok embedded in a hand-pushed cart.

At a tiny food stall along one of Bangkok’s traffic-clogged boulevards, the owner, Thaweekiat Nimmalairatana, 35, questioned the very notion of standard recipes. He has been cooking since he was 10 years old and said the slightest variation during the preparation of his dishes – changing the order that ingredients are mixed or the brand of fish sauce – affects the taste.

February 2015

Traditionally, the main laboratory of Thai cuisine is the street. Legions of roadside chefs – many of whom have fanatic followings but have never used a measuring cup, let alone followed a written recipe – work in kitchens that often consist only of a large wok embedded in a hand-pushed cart.

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Essentials

63

The besT of leisure and lifesTyle

The Wild West on Wheels Jumping into a modern-day covered wagon and exploring the majesty of America’s southwest is a trip to remember, reports Leanne Walker.

Photos by Andrew Marshall

T

he Southwest of the United States

landscapes of Arizona, New Mexico

American ‘El Monte’ RV. Recreational

is a land of the imagination.

and Utah is unparalleled, and these

Vehicles (as motor homes are known

For what else can help you to

three Southwest states boast the highest

here) are as American as the stars and

comprehend the grandeur and depths of

concentration of national parks in the

stripes and their popularity is evident by

the Grand Canyon, the soaring mesas and

nation. For these reasons, we had come to

the sheer number of facilities available,

buttes of Monument Valley, the spiritual

tour this Wild West region.

making ‘on the road’ travel an experience

reverence of Canyon De Chelly, and the

The early settlers had done it the hard

of pure freedom.

It took two days driving from San

colour and vibrancy of Navajo, Hopi and

way with their canvas-covered wagons,

Pueblo cultures?

but we were taking it easy, seated

Francisco before we cleared California’s

comfortably behind the wheel of an all

Sierra Nevada mountains and reached

The variety and magnitude of the February 2015

64

Essentials

Travel

Death Valley. At 80 metres below sea

largest and deepest ‘hole’ in the earth.

level, it is the lowest elevation in North

The mother of all canyons – the Grand

America. As the RV pulled back on the

Canyon. Over 250 miles long and three

hot desert air, the miles fell behind in

miles deep, it took two days hiking along

amazing diversity of experiences you can

a spectacle of dazzling white salt pans,

the west rim taking in the postcard

have on a RV tour of the Southwest. We

rock-strewn plains and windblown sand

views, and a strenuous descent into the

examined dinosaur footprints alongside

dunes. Wild flowers swept our views

canyon past millions of years of glowing

the highway and witnessed trees frozen

with swathes of gold, while paw prints in

sedimentary rock, before we could even

to stone in the Petrified Forest National

the cracked earth told of desert fox and

begin to comprehend its immensity.

Park. Across the border in New Mexico

coyote. With a quick blast on the air-con,

Situated 230 miles east of the Grand

The days ahead epitomised the

we explored the streets of historic Santa

and a feel good beat on the stereo, we

Canyon, and located within the Navajo

Fe, visited the Indian pueblo village of

switched to cruise control and moved on

Indian Reservation Lands, is Canyon De

Taos (where adobe homes date back to

effortlessly into Death Valley – one of the

Chelly National Park. It was here that we

the 1400s), and poked our noses into D.H

hottest places on earth.

first had our first glimpse into the world

Lawrence’s ranch house. In the north

of the prehistoric pueblo people. The

west of New Mexico, Chaco Historical

are to be had from Dante’s View. From

Navajo who now live here call them ‘the

National Park is one of the best

an elevation of 1,670 metres in the

Anasazi – the ancient ones’. An easy hike

archaeological sites in the Southwest.

Amargosa Ranges, the shimmering salt

leads down to the floor of the picturesque

The ruins consist of several great

pans and sweeping sand dunes span out

canyon and the Whitehouse pueblo ruins.

in a long corridor hemmed in by the bare

Built against an overhang of canyon walls

bones of the mountains. Like looking

and surrounded by a maze of Navajo

down in a fiery cauldron, this is as good

fields, the Anasazi ruins are simply

a view of hell as I can imagine. In 1913,

stunning. Why the Anasazi left their

the highest temperature recorded here

canyon homes long ago no one knows,

reached 57 degrees Celsius.

but the mystery still lingers today.

The best views over Death Valley

Skipping across the bottom of Nevada, we timed our passing through Las Vegas for twilight. It was an outrageous over the top experience – miles of pulsating neon signs, gaudy Disney-like buildings and drive-in marriage ceremonies. You couldn’t get a greater contrast to the large scale natural attractions to follow.

Somewhere across the Arizona state line, down ‘Old Route 66’, was the

Clockwise: Anasazu ruins in Canyon de Chelly, Arizona; Old waggon wheel; Magnificent pueblo ruins at Chaco Historical Park, New Mexico; Delicate Arch in the Arches National Park, Utah; Colourful mural, Taos, New Mexico; Death Valley’s fiery cauldron from Dante’s Lookout; Timeless Monument Valley.

Portfolio

65

John Ford first brought Hollywood to Monument Valley in 1939 with the classic movie Stagecoach starring John Wayne and introduced millions of moviegoers to the beauty of this arid corner of Arizona and Utah.

compound houses, each with a maze of

Southwest, where magnificent mesas and

rooms and ceremonial round kivas of

buttes crowded the horizons in a most

intricate masonry. Chaco has a sense

familiar manner.

of timelessness and spirituality that

John Ford first brought Hollywood to

is almost palpable. From Chaco we

Monument Valley in 1939 with the classic

headed the RV back into Arizona, and

movie Stagecoach starring John Wayne

hit Highway 163 to Monument Valley

and introduced millions of moviegoers

– the most scenic driving in the entire

to the beauty of this arid corner of

February 2015

66

Essentials

Travel

Clockwise: Beautiful Teardrop Arch in Monument Valley; The RV on the road; The Flinstone’s Campground near the Grand Canyon; The desert blooms, Arizona; Taos Pueblo, the oldest adobe pueblo in the US.

plateaus, rugged and colourful canyons, deep lakes and cactus-covered deserts.

Mother nature was feeling especially generous when she dished out magical places here.

With heavy hearts we by-passed Canyonlands and Bryce Canyon to spend

Arizona and Utah. So taken was he with

our last days in and around Arches

the area that he went on to make a total

National Park, a region which boasts over

of nine movies including: My Darling

2000 natural stone arches – the greatest

Clementine (1946), She Wore A Yellow

density on earth. It was fitting that the

Ribbon (1949), The Searchers (1956), How

last hike on our tour turned out to be

the West Was Won (1962), and Cheyenne

the best. This is a famous trail, leading

Autumn (1964). As John Wayne put it

to Utah’s best known and loved arch,

so rightly, “TV you can make on the back

the one that appears on every Utah car

lot, but for the big screen, for the real

number plate and in countless American

outdoor drama, you have to do it where

television commercials – Delicate Arch.

God put the West.” Not all movies shot

Walking on the 2.4 kilometre trail,

at Monument Valley have been westerns:

I was rewarded by panoramic views

Easy Rider, 2001: A Space Odyssey,

to the East over the snowcapped La

Thelma and Louise, Forrest Gump and

Sal mountains, shimmering like an icy

Back to the Future 3 to name a few.

hallucination above the desert. When I

Crossing over into Utah, our three-

first spied the infamous arch, nature had

week trip was nearing an end, and Utah

gift-wrapped it for me, framing it in the

isn’t a state to run short of time in.

sweeping span of Frame Arch. Straddling

The landscape is striking at every turn

a ridge of glowing red sandstone, between

with snowcapped mountains, timbered

an ancient pothole and a sheer cliff face,

Portfolio

67

Delicate Arch literally has the power of

off the red rock walls all around, like the

presence to stop you in your tracks.

tremors of an earthquake that are felt but

Water and ice, extreme temperatures and

February 2015

not heard. I wasn’t sure how long I’d been

millions of years are responsible for this

sitting there in awe when suddenly below,

masterpiece. I scrambled up into the shade

a fellow walker stepped into the view to

of Frame Arch and found a spot to sit and

stand at the foot of Delicate Arch. The

give justice to the view. The aura of time

effect provided a superb grand finale to a

and silence was tangible. It reverberates

simply amazing journey.

68

Essentials

Cuisine

The Amazon’s Daring Fare Chef Thiago Castanho is turning Brazil’s culinary scene on its head with his daring use of little-known ingredients sourced from the jungle, reports Simon Romero.

Portfolio

69

T

o start things off right at Thiago Castanho’s laboratory of Amazonian culinary revelations

in Belém, take a sip of his signature

Opposite page: Thiago Castanho, owner of the restaurant Remanso do Bosque, in Belém, Brazil.

Below: A vendor sells acai berries at the Vero-Peso market .

terroir cuisine quite like Ver-o-Peso, named for the large scales on which harvests from points across the Amazon are weighed.

Here, fish of all shapes and sizes are sold

cocktail, which blends cachaça, made

next to rainforest fruits like the sweet-and-

from sugarcane, and jambu, a herb with analgesic properties whose flowers look

faux-Swiss chalets in the hills of southeast

sour tasting bacuri (resembling a rounded

like yellow and pink eyeballs. Sit back and

Brazil, he opted to return to his home

papaya) or the greenish egg-shaped uxi.

let the jambu create a pleasant tingling

city, Belém, a bustling Amazonian river

sensation on the tongue.

outpost with a metropolitan population

to buy açaí, the dark purple berrylike

of 2.2 million located more than 2,400

fruit which is a staple in this part of the

flat bread with dried shrimp, or a cheese

kilometres to the north of São Paulo’s

Amazon. Before dawn each morning on the

made from the milk of water buffalos

concrete canyons.

market’s cobblestone wharf, wholesalers

Then on to the food. Try the cassava

from Marajó, an island at the mouth of

Castanho has become one of Brazil’s

Ver-o-Peso is also where Castanho comes

sell baskets of fresh açaí harvested by families in villages near Belém.

the Amazon River. Move on to plates like

most innovative chefs as he pioneers a

smoked mapará, a fish that tastes like eel,

culinary renaissance in Belém, a once-

and then finish things up with a dessert of

thriving centre of the Amazon rubber trade

generally consume açaí in smoothies,

cupuassu fruit prepared with a sprinkling

which went into a long decline in the 20th

mixing its frozen pulp with sugar or other

of flour made from manioc and the fruit of

century, remaining a backwater in the view

sweeteners, Castanho hews to tradition,

babassu palms, and Castanho’s ambitions

of many Brazilians.

using the fruit to make an unsweetened

grow clear. He wants to show the world

“Thiago comes around here some days,

While beachgoers in Rio de Janeiro

thick cream with an earthy taste, or

that a bounty of little-known ingredients

always bargaining for the freshest catch,”

combining it with manioc flour to sprinkle

found in the Amazon has the potential to

said Brasiliana da Silva, 53, a fishmonger

on fresh fish.

turn the cuisine of Latin America’s largest

in Belém’s riverside market, the Ver-o-

nation on its head.

Peso, where boats yield offerings each

Beyond The market, the inspiration

morning around four such as tambaqui,

for many of Castanho’s dishes comes from

envision the expanses of rainforest and

the large omnivorous freshwater fish

the streets of Belém, a four-century-old city

maybe some settlements here and there,”

whose barbecued ribs alone make a

where the jungle constantly seems to be

said Castanho, a reserved 26-year-old who

succulent feast. “No one is more curious

seeking to reclaim its dominance. So many

dresses like a surfer and speaks almost in

or demanding than Thiago,” da Silva said.

mangoes, for instance, drop from Belém’s

a whisper. “They forget that human beings

“He’s always looking for something new.”

trees that drivers complain of mechanics

“When people think of the Amazon, they

have lived in the Amazon for thousands of years, experimenting throughout that time with the ingredients at their grasp,” he said in an interview at his restaurant, Remanso do Bosque. “It’s a little subversive, I know, but I think it’s time for the rest of the world to be exposed to some of these sublime creations.”

A more conventional route for an ambitious Brazilian chef would have been to open yet another restaurant in São Paulo, Brazil’s largest city and dining © 2014 New York Times News Service

Few places in Brazil offer the fixings for

capital, where tattooed celebrity chefs have gathered in such large numbers that Julio Bernardo, an acerbic food critic and blogger, is gaining celebrity status for taking them down a notch.

But while Castanho studied at a culinary school in Campos do Jordão, an outpost of February 2015

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Cuisine

Clockwise: (2) Smoked fish, urucum oil, plantain and Brazil nut flour; (3) People sit at a street stall serving tacaca, a soup made with yucca and dried shrimp; (4) Tucupi, a broth made of fermented manioc root, is prepared at the Ver-o-Peso market in Belem; (5) Cassava flat bread, dried shrimp and Marajoara cheese; (1) Ver-o-Peso market brings together the products of the Amazon rainforest.

America’s top-rated restaurants.

pizzas for his father’s pizzeria in Belém.

“Thiago is seizing the idea that the

But he was immersed in Belém’s cooking traditions when his parents opened

future of cooking may rest more in the

Remanso do Peixe, a restaurant serving

diversity of ingredients than in technical

food from Pará, the immense Amazonian

experimentation, and that the Amazon is

state that is almost twice the size of Texas.

uniquely endowed to go down this path,” said Carlos Alberto Dória, a sociologist who

After attending culinary school,

writes widely about Brazil’s food traditions.

Castanho moved across the Atlantic to

Sometimes this quest for innovation

Lisbon to work for Vitor Sobral, the chef 1

known for reinvigorating Portuguese

involves forays into the Amazon rainforest

cuisine, before returning to Belém to open

surrounding Belém. On one such recent

Remanso do Bosque. Eating at Remanso

trip by boat on the Guamá River to the Ilha

do Bosque isn’t cheap. But while its

do Combu – a forested island of peach-

12-course tasting menu costs about $65

palms where riverbank families eke out an

per person, the 130-seat restaurant was full

existence collecting fruits like pupunha and

on a recent Friday night. In less than three

acai – Castanho waded through swarms of

years, it has climbed into the ranks of Latin

mosquitoes called carapanãs.

“A little bit of sacrifice is worth it,” said

5

Izete dos Santos Costa, 49, a farmer on the island who grows organic cacao and sells it to Castanho. After he began making chocolate desserts from the cacao, her harvests became coveted by chefs in distant São Paulo.

With deforestation rising again and huge dams under construction in Brazil’s 2

profiting from repairing cars damaged by falling fruit. Vines envelop abandoned graffiti-splattered colonial homes, making it seem as if parts of the city have been allowed to evolve into elegant ruins even as contemporary high-rises soar above them.

Castanho grew up in the lower rungs of the restaurant business, delivering

4

Amazon, Castanho views the growth of demand for foods from the rainforest as a potential shift providing a more sustainable way to develop parts of the vast region, starting with the organic cacao grown on the Ilha do Combu.

“Why should the Swiss be such giants in the world of chocolate when Switzerland doesn’t grow any cacao?”

Photo: Getty Images

he asked. “We have all the ingredients we need in the Amazon to produce worldclass cuisine,” he continued. “Maybe all that’s needed to take things to the next 3

level is some imagination.”

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Profile

Ferran Adrià Feeds the Hungry Mind Spain’s most famous chef has ambitious ideas, but he is struggling to pare them into a clear vision, reports Sam Borden.

O

ne day in November, Ferran Adrià, the Spanish chef who turned foods into foams and

pioneered a new era in gastronomic innovation while running one of the world’s most popular restaurants, bounced through a loft space in Barcelona, Spain.

He peered at pencil-sketched mind maps tacked to plastic foam bulletin boards and examined books jammed on narrow shelves – until he reached the end of a display table featuring a variety of Asian soup spoons. Then he stopped.

“I have a question,” he said in Catalan to the small group of visitors and staff members trailing him. “What is wine?”

There was silence. Four seconds, five seconds, 10 seconds. Finally, cautiously, someone offered, “A drink?” Adrià’s eyes widened. “Maybe it is a drink if I put it in a cup. But what if I make it into a sauce and cook with it?” His voice was sharp. More silence. Adrià spun away and began walking again. “Now,” he said over © 2015 New York Times News Service

his shoulder as the crowd shuffled in his wake, “what if I turn the wine into ice cream? What is it then?”

Adrià, 52, has always been inquisitive.

Even during the peak years at El Bulli, when Restaurant magazine named it the world’s best restaurant five times from 2002 to 2009, and he rocketed beyond Portfolio

73

the standard-fare celebrity chefs into the

is nearly over. But even so, it is not

rarefied air of the gastronomic geniuses,

altogether clear what the next act will be.

he would pose random questions about

His latest venture is an umbrella project

the origin of vegetables or fruit.

known as the El Bulli Foundation. The

His questions were genuine. Creativity

foundation’s aim, it seems, is to take on

made El Bulli and, later, killed it. Adrià

the entire notion of creativity, but for now

calculated that he concocted 1,846 dishes

it has so many potential elements that

during his time there, many of which

Adrià might deliver an effective elevator

pushed the boundaries on epicurean

pitch only if he were stuck between floors.

labels (the artichoke as rose petals, the

He acknowledges as much, often

olive formed from frozen olive juice).

saying to visitors, “Et roda el cap, oi?” (or,

He says the primary reason he closed

roughly, “Your head is spinning, right?”).

the restaurant in 2011 was not, as hotly

But he does not apologise.

speculated in the Spanish press, a family

So what is his goal? The foundation’s

squabble or overwhelming money

current mission seems to flutter between

troubles. It was that even while El Bulli

worldly and chaotic. Consider the activity

operated only six months a year and

on a morning in November: one group

served just one meal a day, Adrià was

of employees worked in a corner of the

scared of repeating himself.

loft on prototypes of a website known as

“Can you imagine this pressure?” he

BulliPedia that, when finished, will be

said. He shook his head. “You cannot.”

a type of Wikipedia for haute cuisine.

Now there is pressure of a different

On the opposite side of the room, a

kind. Adrià’s acclaim came with benefits

young woman edited pages intended for

that were tangible – he used to charge

a multivolume book collection tracing

¤80,000 (about $97,000) for an hourlong lecture on creativity – as well as some that were more abstract. Most notable of these has been a grace period, which has stretched some three years, in which the world has patiently waited to see what he will do next.

Adrià has proclaimed that the wait February 2015

the history of food. At a desk facing Top (L-R): A draft visualization of the creative process in Bullipedia Foundation Lab, run by Ferran Adria; Plating diagrams, from 2000-4.

Above: A staff member of Ferran Adria.

Left: Ferran Adria, a groundbreaking Spanish chef whose El Bulli was one of the world’s top restaurants before he closed it.

the window, three men spent hours researching white asparagus. (It was not immediately clear what this was for.)

Adrià stalked among them, his eyes darting about and his hand constantly pushing up his glasses into his hair. The work has not gone perfectly; there have

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been starts and restarts, adjustments of the larger vision and, most painfully, an ugly and still-simmering political fight over the construction of his foundation’s new home.

The pressure has changed. Instead of competing against his own originality, Adrià is now shouldering the expectations of a company that has invested in him, a nation that (mostly) adores him and a global culinary community that reveres him.

Topping his own opening act is not an inconsiderable concept. But Adrià, still chattering about wine as a “manufactured product,” looked assured as he paused near the middle of the room. “We are trying to create an entire language for

Above: Ferran Adria goes over concepts with his staff.

creativity,” he said. He shrugged. “I know this sounds a little pretentious.” is airy and grand. Adrià wanted the baby

described Adrià, lovingly, as “a person of

On Dali’s Turf

footprint of El Bulli the restaurant to

the moment.”

About two hours north of Barcelona, there

become something much bigger.

is a protected area, Parc Natural del Cap

Adrià does not like to speak publicly about the construction issues, grimacing

de Creus, that juts into a bay. The park is

There is only one problem: it is mostly

and waving his hand when the subject is

famous for inspiring the work of Salvador

not happening. When Adrià’s vision was

raised. López, though, said that the entire

Dalí and, later, as the unlikely location of

revealed, ecologists almost immediately

ordeal was “very disappointing” for Adrià

El Bulli. For years, expectant diners made

objected to the potential impact of the

and that it was not clear what would

their way along a narrow road toward

expansion within the park and gathered

happen with the project.

the bay and through the narrow doorway

nearly 96,000 signatures on a petition to

with the familiar bulldog logo etched into

stifle it.

the wall, settling into seats for what was,

Barbara Schmitt, spokeswoman for

essentially, an art show presented on a

an environmental group in the nearby

shimmering dinner-plate canvas.

town of Roses, said the group’s worries

“We live here in Roses. We want to be in Roses,” López said. “What is not possible is being in Roses and having people throw stones at us all the time.”

By law, Adrià is allowed to increase

included the effect on wildlife and the

the size of his property a maximum of

in demolition dust. The room that used

traffic expected from thousands of new

20 per cent, a modest expansion that, for

to be reserved for the careful cutting

tourists. Schmitt said she and some

the moment, is underway. Some people

and preparing of meat – staff members

colleagues met with Adrià and his

say they think Adrià will ultimately get

nicknamed it “the morgue” – has been

team in May but came away with no

the overhaul he initially desired. Roses

transformed into a makeshift office holding

meaningful conclusions.

is a lively tourist destination, and its

At present, the tiny house is covered

reams of paper detailing the reconstruction

The downside of Adrià’s creativity –

mayor, Montserrat Mindan, said she

of what Adrià envisioned as the heartbeat

or, put another way, his thinker’s curse

wanted to assist Adrià in achieving his

of the El Bulli Foundation.

– is that he cannot stop himself from

dream because there was a considerable

constantly conjuring, even if his ideas are

upside for the town. Mindan played

areas, an expansive brainstorming room

not always feasible. Jose Mari López, a

down the concerns of the environmental

with a glass wall facing the sea and, yes,

long-time employee who lives in Roses

groups, focusing instead on how El Bulli

a kitchen for fundraising events. The

and is overseeing the work at the site,

and Adrià helped crystallise the town’s

proposed name of this museum is El Bulli

said the plans for the new building had

reputation within Catalonia.

1846 – named for the number of dishes

changed more than a half-dozen times,

the restaurant produced – and the design

depending on Adrià’s moods. López

The plans are ambitious: exhibition

“Ferran Adrià will help us be on top,” she said.

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Art

Cuba’s Unique Art Scene Cuban artists are hoping for more exposure and better sales since the United States loosened its economic embargo, reports Victoria Burnett.

4

K

adir López was working in his studio at his elegant home in Havana when the doorbell

rang. It was Will Smith and his wife, Jada Pinkett Smith. “I had no idea they © 2015 New York Times News Service

76

were coming,” said López, whose work incorporates salvaged American signs and ads that were torn down after Fidel Castro’s 1959 revolution.

About an hour and $45,000 later, Smith had bought “Coca Cola-Galiano,” a Coca-Cola sign on which López had Portfolio

77

Right: Cricket Jones, right, and Steve Wilson, a Louisville, Kentucky–based collector.

Below: An outdoor installation at the studio of young artists Frank Mujica, Adrián Fernández, and Alex Hernandez Dueñas.

Left: Artwork by Kadir López, who incorporates salvaged American signs and ads that were torn down after Fidel Castro’s 1959 revolution in Havana; Coca-Cola signs

by Kadir López.

Cuban artists – from the most

Obama announced that the two countries

established to those still studying at

would move to restore diplomatic ties. He

the Higher Institute of Art – receive

is now booked through March with Cuba

superimposed a 1950s photograph of

visits from institutions like the Bronx

visits. “It’s absolutely crazy,” he said.

what was once one of the most bustling

Museum of the Arts and the Museum of

commercial streets in Havana. A year

Modern Art and from visitors. Many of

under rules dating to 2009 that allow

later, recalling the event, López is still

the visitors are wealthy intellectuals who

“purposeful travel” intended to foment

happily incredulous. “Where else in the

travel to Cuba on “people-to-people” trips

contact with Cubans, many shied away,

world does Will Smith turn up on an

that are permitted under the embargo.

Magnan said. “It’s a hassle,” he said,

artist’s doorstep?” he said.

“The phenomenon is very unusual,” said

Even though Americans can visit Cuba

referring to the need to get a license from

As collectors, art connoisseurs and

Carlos Garaicoa, an artist who works with

the US government and pay for works

institutions eagerly gear up to travel to

photography and sculpture and splits his

without using a US credit card.

Cuba after President Barack Obama’s

time between Havana and Madrid. He

decision to loosen the United States’

added, “I doubt it happens anywhere else

economic embargo, the art scene that

– maybe China.”

awaits them is sui generis: a world whose

That pipeline of art lovers is about

Now, however, “they’re saying, ‘I want to go before everyone else does,’ ” he added.

Steve Wilson, a Louisville, Kentuckybased collector with Magnan in Havana,

artists are cut off from supplies and the

to grow, predicts Alberto Magnan,

snapped up eight pieces, mainly by

internet and, at the same time, celebrated

whose Manhattan gallery Magnan Metz

young artists, with price tags between

by a coterie of international buyers whose

specialises in Cuban art. Magnan, who

$1,500 and $15,000 in December at the

curiosity and determination brought them

is currently in Havana, received 25 calls

Fábrica de Arte Cubano, an art space in a

to Cuba long before talk of a thaw.

from collectors on December 17, after

converted factory.

February 2015

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Art

Wilson, a founder of 21c Museum Hotels, which house contemporary artworks, said he hoped the diplomatic opening would allow him to organise residencies for Cuban artists in the United States and vice versa – maybe even open a 21c in Havana. “I love the fact that more people will be able to come and see this work,” he said.

Since the 1990s, the Cuban government has given extra freedom to artists, who are viewed as a pillar of the country’s cultural prestige, allowing them to travel and keep a large share of their income. Still, many artists are barely known, especially outside Havana, said Sandra Levinson, a founder of the Centre for Cuban Studies in New York.

“I think there’s still a lot to be

Above: Guests of Alberto Magnan and Steve Wilson’s Cuban art tour.

Left: Artist Kadir López; Part of the installation, “El talisman del Rey” by Santiago Rodríguez Olázabal.

discovered,” said Levinson, who successfully spearheaded a lawsuit against the Treasury Department in 1991 to allow

whose prices ranged from $2,500 to

Americans to bring art home from Cuba.

$300,000, said he would waste no time

Levinson was in Cuba when the news

when he returned to Cuba for the fifth

of the détente broke and members of

time. “I think the time between seeing a

her party were “buying and buying and

piece I like and the decision to purchase

buying,” she said.

will be decreased,” he said, laughing.

Jonathan S. Blue, a Louisville financier

Blue, whose Cuban works include a

who caught the Cuban art bug from

vinyl record made of tightly coiled eight-

Wilson and has a dozen Cuban pieces

track cassette tape by Glenda León, an artist based in Havana and Madrid, and two sculptures by Alexandre Arrechea, including Sherry Netherland, a looped, scarlet steel sculpture of the opulent Fifth Avenue apartment hotel, said that part of the charm was getting to know Cuban artists and navigating hurdles.

“If you walk into a gallery in Mexico City and say, ‘I want that in my apartment on Monday,’ it’ll be there,” he added. “It doesn’t work like that in Cuba.”

But for Luis Miret, director of Galería Habana, the most prestigious of about a dozen state-owned galleries in Havana, those hurdles are a drag. Currently, anything shipped from Havana to the United States – 145 kilometres away – has to go through a third country, such as Panama or Britain. Miret calculates that air Portfolio

79

cargo fees from Havana to Miami would be

to graphite to canvasses, from abroad. And,

to it than most people, but they’ll feel

about 70 cents a kilo; he pays about $6.70

as he sat in an Ikea armchair on a recent

they have to have an agent.” She added:

a kilo to send things via London.

rainy morning, Fernández confessed, “We

“They can’t spend all their time meeting

are all still living with our parents.”

foreigners who bob into their studios.

Miret recently lost a three-year battle to recoup $17,000 that Galería Habana

Several artists said that a market where

They have to be able to find time to work.”

wired to an account in Miami to pay

they would sell a majority of their work

for a booth at a Colombian art fair. The

through galleries would benefit them.

will be a sign of maturity. “Sometimes

funds were confiscated by the Treasury

Often wealthy visitors – as opposed to

there are visits where, if I am not here,

Department. “How can it be that I am

collectors – bought works that the artist

they don’t want to come,” he said. “I would

allowed to publish an ad in Art Forum,

then lost track of, they said, which would

hope that the approach to Cuban artists

but I can’t pay to participate in an art

make putting together a retrospective

becomes about the art itself.”

fair?” he said in his small office at the

difficult. Prices, they said, would become

gallery. “I don’t get it.”

more transparent and more stable.

And while Cuban artists enjoy special

Another thing that will change if the

attention from foreign art lovers, few

number of collectors rises, Levinson said,

islanders have the income to buy art,

is that artists will become less accessible.

said Adrián Fernández, 30, who set up a studio with fellow artists Frank Mujica, 29, and Alex Hernández Dueñas, 32, last year. All three received a free nine-year art education, he said, but, now that they are working, there is very little in the way of grants from the government or from foundations.

Indeed, they are an example of the odd contradictions facing artists: the three, whose works sell for between $500 and $8,000, are represented by a Belgian gallery Verbeeck-Van Dyck, and each has a solo show there next year. Their studio is in a spacious house in an upscale neighbourhood – they got a deal from a divorcing couple; they wouldn’t say how much they paid. But they have to bring everything they need, from track lighting February 2015

“Most artists don’t like to sell their own work,” she said. “Cubans are more open

If that ever happens, Garaicoa said, it

Above (L-R): Artwork by Kadir López; From left: Frank Mujica, Adrián Fernández and Alex Hernández Dueñas at their studio.

Below: From left: “La sombra,” “Viento misterioso,” and “Sin alma,” installation and paintings by Santiago Rodríguez Olazábal at Galería Habana.

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Environment

A tree grows in a second-growth rain forest being monitored by researchers at La Selva Biological Station

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Restored Forests Fight Climate Change In Costa Rica, large swathes of rain forest have been allowed to regrow and play their part in taking carbon dioxide out the atmosphere, reports Justin Gillis.

o

ver just a few decades in the

by a growing environmental movement in

they have made. The momentum to slow

mid-20th century, Costa Rica

countries that are home to tropical forests,

or halt deforestation is fragile, for many

chopped down a majority

and by mounting pressure from Western

reasons. Around the world, trees are often

of its ancient forests. But after a huge

consumers who care about sustainable

cut down to make room for farming,

conservation push and a wave of forest

practices, corporate and government

and so the single biggest threat to

regrowth, trees now blanket more than

leaders are making a fresh push to slow the

forests remains the need to feed growing

half of Costa Rica.

cutting – and eventually to halt it.

populations, particularly an expanding

Far to the south, the Amazon forest was

With the recent signs of progress, long-

global middle class with the means to eat

once being quickly cleared to make way

wary environmental groups are permitting

better. Saving forests, if it can be done,

for farming, but Brazil has slowed the

themselves a burst of optimism about the

will require producing food much more

loss so much that it has done more than

world’s forests.

intensively, on less land.

any other country to limit the emissions

“The public should take heart,” said Rolf

leading to global warming. And on the

Skar, who helps lead forest conservation

A RemARkAble ComebACk

other side of the world, in Indonesia, bold

work for the environmental group

Deep inside a Costa Rican rain forest,

new promises have been made in the past

Greenpeace. “We are at a potentially

white-faced capuchin monkeys leapt

few months to halt the rampant cutting of

historic moment where the world is

through the tree tops. Nunbirds and

that country’s forests, backed by business

starting to wake up to this issue, and to

toucans flew overhead, and a huge

interests with the clout to make it happen.

apply real solutions.”

butterfly, flashing wings of an iridescent

Still, Greenpeace and other groups

blue, fluttered through the air. Ignoring

change, it has been clear for decades that

expect years of hard work as they try to

the profusion of life around him, Bernal

focusing on the world’s immense tropical

hold business leaders and politicians

Paniagua Guerrero focused his gaze on a

forests – saving the ones that are left, and

accountable for the torrent of promises

single small tree, placing a tape measure

In the battle to limit the risks of climate

perhaps letting new ones grow – is the single most promising near-term strategy.

Deforesting the World

That is because of the large role that

Since the dawn of civilization, humans have destroyed or badly damaged perhaps three-quarters of the world's forests. This map shows loss and gain of forest cover over the last decade, including mechanical removal, fire and disease. Since the 19th century, forests have been re-established across large areas of the Northern Hemisphere, but in the tropics, they are still under broad assault.

forests play in what is called the carbon cycle of the planet. Trees pull the main greenhouse gas, carbon dioxide, out of the air and lock the carbon away in their wood and in the soil beneath them. © 2014 New York Times News Service

Destroying them, typically by burning, pumps much of the carbon back into the air, contributing to climate change.

Over time, humans have cut down or damaged at least three-quarters of the world’s forests, and that destruction has accounted for much of the excess carbon that is warming the planet. But now, driven

Researchers, led by a team at the University of Maryland, used thousands of satellite images taken from 2000 to 2012 to track deforestation around the world. w wo o or

Costa Rica Brazil

Indonesia

Change in tree cover since 2000 for every three degrees of latitude and longitude

in square miles LOSS

GAIN 5,000 1,000 500

Costa Rica: A Success Story NICA NI C RA CA AGU GUA A

February 2015 Liiberi L be be eri ria ri

Costa Rica is considered a forest success.

Much of the country’s old-growth forest was lost from the 1940s to the 1980s, but then new policies stemmed the loss, and forests have regrown to cover more than half the country. Serious threats persist, including a

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Clockwise: Leaf-cutter ants at work in a second-growth rain forest being monitored by researchers; Mushrooms grow on a log in Costa Rica; Bernal Paniagua Guerrero measures a tree trunk as part of research carried out at La Selva Biological Station.

around the trunk and calling a number out to his sister, Jeanette

some of the world’s problems.

For the entire geologic history of

Paniagua Guerrero, who recorded

the earth, carbon in various forms

it on a clipboard.

has flowed between the ground, the

With that, the tree, a black manú,

air and the ocean. A large body of

entered the database of the world’s

scientific evidence shows that the

scientific knowledge. Its growth will

amount of carbon in the air at any

be tracked year by year until it dies a

given time, in the form of carbon

natural death – or somebody decides

dioxide, largely determines the

to chop it down.

planet’s temperature. The burning of

The Paniaguas and their co-worker,

coal, oil and natural gas effectively

Enrique Salicette Nelson, work for an

moves carbon out of the ground and

American scientist, Robin Chazdon,

into the active carbon cycle operating

helping her chronicle a comeback.

at the earth’s surface, causing a

Cuatro Rios, the forest they were

warming of the globe that scientists

standing in, looked, to a casual eye,

believe is more rapid now than in any

as if it must have been there forever.

similar period of geologic history.

In fact, the land was a cattle pasture

Though the higher temperatures

only 45 years ago. When the market

are causing extensive problems,

for beef fell, the owners let the forest

including heat waves and rising seas,

reclaim it. Now the Cuatro Rios

the increasing carbon dioxide also acts

forest, near the tiny village of La

as a sort of plant fertiliser. The gas is

Virgen, is a study plot for Chazdon,

the primary source of the carbon that

an ecologist from the University

plants, using the energy of sunlight,

of Connecticut, who has become a

turn into sugars and woody tissue.

leading voice in arguing that largescale forest regrowth can help to solve

Scientific reports suggest that 20 to 25 per cent of the carbon dioxide Portfolio

83

that people are pumping into the air is Left: A monkey scrambles across a rope bridge over the Puerto Viejo river.

Below: Spray paint indicates trees that had just been measured at Cuatro Rios.

Bottom: (l-r) Jeanette Paniagua Guerrero, Enrique Salicette Nelson and Bernal Paniagua Guerrero, researchers with the La Selva Biological Station.

being absorbed by trees and other plants, which keep taking up more and more even as human emissions keep rising.

But when people damage or destroy forests, that puts carbon dioxide into the air, worsening the warming problem.

Scientists concluded decades ago that deforestation must be stopped, both to limit climate change and to conserve the world’s biological diversity. These days, they are also coming to understand the huge potential of new or recovering forests to help pull dangerous emissions out of the air.

“Every time I hear about a government programme that is going to spend billions of dollars on some carbon capture and storage programme, I just laugh and think, what is wrong with a tree?” said Nigel Sizer, director of forest programmes at the World Resources Institute, a think tank in Washington. “All you have to do is look out the window, and the answer is there.”

The workers who help Chazdon track her plots often see tell-tale signs of illegal hunting and logging, and they say the authorities are lax about stopping it.

Moreover, a wave of pineapple production to supply a growing world market is sweeping the country, tempting many owners to reclear their land. Growing Chinese demand, in particular, has raised the fear that “the whole of Costa Rica will be paved in pineapples,” said Carlos de la Rosa, director of La Selva Biological Station.

But for now, the second-growth forests of Costa Rica, covering roughly 14 per cent of the land area of the country, at least show what may be possible if the world gets more ambitious about tackling global warming.

Decades of watching the Costa Rican forests recover have taught Chazdon that, at least in areas that still have healthy forests nearby to supply seeds, the main thing human beings need to do is just get out of the way. “The forests know how to do this,” Chazdon said. “They’ve been doing it forever, growing back.”

February 2015

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Sport

Portfolio

Rugby Sevens Extends Its Global Reach The inclusion of rugby sevens at the 2016 and 2020 Olympics has sparked off a gold rush as countries rush to participate in this fast-growing sport, reports Sam Borden.

A

bout 40 kilometres southeast into the desert from Dubai, away from the glittering array of skyscrapers that rise into the clouds, lies a

sparkling new stadium that is home to one of global rugby’s biggest events. It is, in many ways, completely incongruous: the stadium is next to a camel-racing track and in the heart of a country whose national rugby team did not officially exist until 2011. But the stadium’s setting is also perfect.

For years, rugby was primarily the province of a handful of nations in Europe (England, Scotland, Italy, Ireland, France and Wales) and a few from the Southern Hemisphere (Australia, New Zealand and South Africa).

The sport, while undeniably popular, lacked reach.

In recent years, though, rugby has blossomed worldwide, in large part because of the expansion of one particular form of the game. Rugby sevens, a streamlined and fasterpaced version of the traditional style known as rugby union, is the form that will be used when rugby makes its Olympic return at the 2016 Rio games – a reality that has accelerated a change in rugby’s scope.

The growth has been stark: in 2008, the top 10 countries in terms of rugby participation were the nine listed above, plus Argentina. By 2010, Japan, Sri Lanka and the United States had moved into the top 10, while a number of other countries with minimal rugby histories were posting strong showings at international events on both the men’s and women’s sides.

“I was a basketball player – I played down in the post,” Andrew Amonde, captain of the Kenyan team, said in an Rugby sevens, which uses fewer players in shorter games, has been added as an Olympic sport, driving the sport’s growth beyond the few countries where rugby has traditionally been popular.

February 2015

© 2014 New York Times News Service

interview. “I did not start playing rugby until about seven years ago. But since then, it has become the No. 2 sport in Kenya, behind football. Now we play in front of big crowds, in the big stadiums. Everyone in Kenya knows what the sevens team is doing.”

The attraction for players and fans in countries like Kenya, Portugal, China and the United States is the simplicity of rugby sevens. Traditional rugby uses 15 players

85

Essentials

86

Sport

Oregon football team who has become

stop frequently for organised plays like

one of the leading scoring threats for the

grew brighter, and interest rose quickly

lineouts, in which a player on the sideline

United States team. “Imagine if they took

in events like the Emirates Airline Rugby

tosses the ball between two lines of

away the offensive and defensive lines in

Sevens held in Dubai in December, which

opposing players, or scrums, in which

football. The speed you would have left is

was part of a multifaceted Olympic

players from both teams push against

what rugby sevens is all about.”

qualifying process. Some countries,

each other in a large mass while the ball

Rugby sevens is not a new game; its

including Russia and China, quickly

roots can be traced to the late 1800s. But

made rugby part of the physical education

for most of its history, the game was seen

curriculum in schools in an attempt to

speed are the dominant characteristics,

as a more social form of rugby, something

fast-track the sport’s development.

and it can feel as if there are hectares of

teams might use at end-of-season

open field, as each team has only seven

training sessions or as a light and lively

not very many of us,” said Sun Tingting,

players. Instead of standard rugby’s

tournament game. The game’s popularity

the captain of the Chinese women’s team.

80-minute games, rugby sevens is played

began to grow in the late 1990s and

“The possibility of the Olympics changed

in two seven-minute halves, making for

early 2000s, when international rugby’s

everything. It would be the honour of our

a breakneck pace that generally features

governing body, now known as World

lives to be in the Olympics, and we had

constant one-on-one battles in which

Rugby, began a global series of events.

not imagined it was possible before.”

is rolled underneath to resume play.

In rugby sevens, rhythm, movement and

Photos: Getty Images

Suddenly, the spotlight on the game

per side, and its pace can grind, as games

“I played rugby before, but there were

players shimmy and juke as they sprint

The biggest surge came in 2009, when

That carrot looms everywhere. Sonny

for the goal line.

the International Olympic Committee

Bill Williams, one of New Zealand’s most

voted to add rugby for the 2016 and

prominent players, is one of several stars

2020 Summer Games.

expected to make a switch to rugby sevens

“It’s a game of evasion,” said Zack Test, a former walk-on for the University of

in preparation for the Olympics. Canadian sports officials are investing more than $1 million a year in rugby development, and the United States has its rugby sevens players working full time at the Olympic Training Centre in Chula Vista, California.

Pedro Netto, the coach of Portugal’s

Left: South Africa celebrates winning the Emirates Dubai Sevens – HSBC Sevens World Series at The Sevens Stadium on December 6, 2014.

Below: Teams play during a rugby sevens tournament in Dubai.

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87

appealing for the Olympics. Egan estimated that 160 of the 204 countries with Olympic committees also had rugby federations, with nations like Ecuador, Guatemala and El Salvador having recently established governing bodies in large part because of the sport’s simplicity.

“We’re not guaranteed a place in the Olympics beyond 2020,” Egan said. “We know that we have to deliver a quality product, and we think rugby sevens offers a real festival feel – an open, accessible, entertaining game for both men and women that is easy to understand but still fun to watch.”

Left: Fans are pictured during day one of the Emirates Dubai Sevens.

Above: A rugby sevens game between Fiji, (white) and Brazil (yellow) in Dubai.

The scene at the Emirates Airline Sevens Stadium in Dubai was emblematic of that sentiment. Opened in 2008, the complex had the capacity to hold about 100,000 fans – most of them expatriates – for the three-day event, which included youth and adult team tournaments alongside the

team, which has more modest Olympic

professional men’s and women’s matches.

aspirations, said he hoped to bring

Many fans arrived in costumes – there was

his team of amateur players together

a particularly impressive pack of Star Wars

much more often in the approach to

storm troopers who kept their masks on

the Games, and he said his country’s

despite the beating sun – and the stands

Olympic committee, which generally has

filled throughout a day of action that

few resources, had given him a modest

stretched for nearly 12 hours.

amount of money to help.

“We are using it to go to the players’

As always, there were surprises. Rugby Sevens’ greatest trait may be its “volatility”,

bosses and ask them to let the players

according to Mike Friday, the United States

out for longer training camps and

men’s coach, and results can be difficult

tournaments,” Netto said. “It is not perfect,

to predict. A fledgling Brazil team took

but rugby sevens is a game where anyone

France to the limit, and Canada upset

can win. Our team is proof of that.”

Wales; the Russian women very nearly knocked off New Zealand and England, and

Mark Egan, the head of competitions

Scotland stunned Samoa, one of the sport’s

and performance for World Rugby, said

powerhouses despite its tiny population. In

there had never been any question that

past years, Kenya has beaten New Zealand

rugby sevens was the best form of the

and Australia in rugby sevens, though this

game to be featured at the Olympics.

year South Africa’s men and New Zealand’s

While purists might prefer 15-man rugby,

women took home trophies.

staging a 12-team tournament in a sport

to think it has a real, live chance,” said

the maximum was not feasible, he said.

Friday, who has also coached in England

In rugby sevens, teams can play three

and Kenya. “In rugby, there are plenty of

games a day.

games where you’d bet your mortgage on

Rugby sevens also bridges genders better, Egan said, making it particularly February 2015

“What sevens does is allow any country

in which two games a week is considered

the result. In sevens, you’d be better to hold on to your money.”

Essentials

88

Other Business

Contract Killer Fined A 21-year-old Norwegian man was fined 10,000 crowns ($1,300) for fraud because he accepted

The man accepted the charge and paid the fine, police added.

Another 21-year-old, who ordered

a contract-killing job without

the killing, was sentenced to two

intending to carry it out, according

years in prison but most of the

to police reports.

sentence was suspended after he

The man agreed to take cash to kill

confessed, saying the teenager

a 17-year-old youth, but authorities

he wanted killed had rejected his

could not prove any intent to

romantic advances.

complete the task, so he could only

He claims to have paid 60,000

be charged with defrauding his

crowns for the job but the other man

client, police said, confirming a

said he received only 40,000 crowns,

report in local newspaper Varden.

Varden said.

Penny Sells for Millions

A Beverly Hills rare coin dealer purchased a 1792 American penny for nearly $2.6 million, the most ever paid for a one-cent piece at auction.

Named after its engraver, Robert Birch, the so-called “Birch Cent” was among the

Photos: Getty Images, Reuters

first pennies struck for the United States,

Swiss Pizza Clamp

part of a series of prototype coins. Only 10

Switzerland's frugal pizza lovers have

are believed to exist and collector Kevin

had their hopes dashed for a special rule

businesses across the border to offer deals

Lipton said the coin he purchased is in

that would have allowed them to keep

targeting Swiss customers, a spokesman for

the best condition of those 10.

ordering cheaper pizza delivery from

the customs office said.

Jim Halperin, co-chairman of Heritage Auctions, said the $2,585,000 Lipton

neighbouring Germany.

Around a year ago the Swiss customs

The previous system had prompted

The Chamber of Industry and Commerce (IHK) for Hochrhein-Bodensee, a German

paid for the coin tops a record set the day

administration scrapped an exception that, in

region that borders Switzerland, had lobbied for

before at the same auction: $2.35 million

some circumstances, allowed food delivery

an exception in the case of pizza delivery, but

for a 1793 “chain cent,” named after the

like pizza into Switzerland without having to

the Swiss customs administration has decided

chains around the denomination.

pass through customs.

against such a move for the time being.

Portfolio

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