Fairly unfair – Energy Network price setting

Gold plated networks practice stopped, and cost reflective price setting will be the market policy. Yes, prices will rise. However prices will be controlled in a fair way it is said. It is an interesting game and thinking about it you realise it is ‘business as usual’ with an appropriate spin for self fulfilling prophesies. Actually it could be prophecies as it depends on if you are using the term as a verb or noun. For instance whether you are forewarning of significant price increases with callous regard to the customer, or anticipating being able to inspire the process of one or more messages that have to be communicated on behalf of the ‘good’.

Previously Co2land org wrote that the question that is most difficult is are you pro-business or pro-market. We have found a new term for the customer as a position description ‘pro-sumer’, and the position is the customer must be the one that willingly pays. We won’t bore you with theories of elastic and inelastic demand as this is a supply side argument. However, we might suggest you develop an instinct that identifies what can be summed as – ‘The rustling of the leaves tells a story, warns of a danger, and a lot of … is going on’. Beware you might not like what you see and the problems are in the detail. So what is the story behind it all?

The story is the players displaying how they justify the costs of reliability of supply. It is not about balancing the supply and demand for more efficient and reliable source of supply. A little more explanation please we hear you say. The business and the market of the energy supply is a supply side focus. That is why the energy companies are called, in the rules, the supplier, and where the customer might curtail or offer low volume generation into the supply is called the provider. Where the customer consumes they are called the user, or more recently termed the ‘pro-sumer’ where they make smart choices. All very simple is it not!

It remains at issue is your network charges will rise regardless.

The questions are how much and why is the political term ‘gold plated’ being used to substitute for what was called redundancy in the past – In this case we explain: “Redundancy is the duplication of critical components or functions of a system with the intention of increasing reliability of the system, usually in …” Source en.wikipedia.org/wiki/Redundancy_(engineering).

The remainder of the story uses other sources as follows: http://www.canberratimes.com.au/act-news/actewagl-says-power-supply-in-canberra-at-risk-20141127-11uyv7.html

, and

http://www.goulburnpost.com.au/story/2726997/australian-energy-regulator-clamps-down-on-network-charges/?cs=12

, and

http://reneweconomy.com.au/2014/regulator-slaps-down-networks-on-more-attempted-gold-plating-22048. Also AEMC paves way for changes in network pricing for solar, air-con.

The network view:

ActewAGL: Chief executive officer Michael Costello says the draft decision from the Australian Energy Regulator does not make sense, and could lead to catastrophic failure.

“We not objecting to a reduction in price, …What we are objecting to is the degree of the reduction, and the fact it threatens reliability, stability and, if it does go far enough, the safety of the network.”

Energy Networks Association head John Bradley said the “unsustainable” spending cuts could compromise reliability, safety and efficiency outcomes for customers. “If implemented, these funding cuts put at risk key consumer outcomes relating to safety, maintenance and outage response times,…Consumers end up paying more under this kind of ‘roller-coaster’ regulation where underspending is followed by higher cost catch-up spending and political intervention.”

The Regulatory View:

Australian Energy Regulator (AER) chair Paula Conboy says under new rules the regulator’s focus is squarely on outcomes for energy consumers, for a safe and reliable network. “So we have to ask ourselves, why should customers be required to pay more?….. Our draft decisions propose lower allowed revenues for transferring electricity and gas, which, if implemented, should result in lower energy bills for end users in the ACT and NSW,… These reductions would be followed by small increases in each of the three subsequent years [in line with the yearly Consumer Price Index]…. Network charges on bills have inflated with extravagant spending – or gold-plating on poles and wires – in recent years and now account for 50 per cent of an energy bill issued to NSW users.”

RenewEconomy asked Conboy if the network revenue application were simply a case of them prosecuting “business as usual” rather than the transformation – the “prosumer revolution” – identified by new AER chief executive Michelle Groves, the chief executive of the AER.

Groves said last month:  “The electricity industry certainly is changing. In fact it is not much of a stretch to say that the next couple of decades will witness something of a revolution in the way small customers interact with the electricity industry. In the future there will be more scope for even the smallest energy users to become active participants in the energy market.”

Conboy said we would have to ask the networks if they were focused on business as usual.

In a separate announcement, the Australian Energy Market Commission (AEMC) said new pricing rules will begin on December 1.

“By having prices that reflect the costs of different patterns of consumption, we are giving consumers clearer choices as we develop a more efficient, incentive-based network regulation framework,” AEMC Chairman John Pierce said .

The Users View: Large, SME, Domestic Advocates.

Gabrielle Kuiper, senior policy officer at the Public Interest Advocacy Centre, said the AER’s draft decisions were welcome news to the increasing number of NSW families struggling to stay on top of soaring energy costs. Dr Kuiper also said there was room for improvement in regards to the allowed rate of return – the forecast of the cost of funds a network business requires to attract investment in the network.

Oliver Derum, another senior policy officer at the advocacy centre, said energy prices could drop even further if the NSW government before the proposed lease of the networks writes down previous over-investment by the networks. “That could cut bills further by hundreds of dollars a year. We would urge the NSW government to consider this option as part of the sale process,” he said.

The Parkinson Report says (Giles Parkinson that is), “The draft rulings are part of a big game between the networks and the regulators over how much they can spend on upgrades, charge for maintenance, and for the cost of capital. The networks have a history of asking too much, and while the AER has sought to cut them down in the past, they have often been over-ruled, or forced to compromise on appeal.

(The AER decides how big the revenue pie will be for the networks. In an associated decision, the Australian Energy Market Operator has confirmed new rules that will require networks to introduce “cost reflective” tariffs, which will likely mean higher fixed and/or demand charges, which could affect households with solar arrays)… Hence the focus on this new round, particularly in light of the incursion of solar and battery storage into the grid, and the emergence of a new decentralised energy model. The AER, in its draft decisions, said that its estimate should result in a lowering of electricity costs, rather than a rise if the networks were allowed to have their way”.

Co2Land org review:

It all looks too much like they want your energy supply to be viewed as a commodity attached to a financial service. You see a commodity price can be manipulated as a means of control. If you lose control the networks cannot keep the growth numbers where they want them – ‘business as usual’.

Look further at the network lobby group, the Energy Networks Association, which has never conceded gold plating in the past, wants solar incentives reduced, higher fixed charges to consumers, and argued that it would be too expensive to quit the grid, said the AER ruling threatened the reliability of the network – an old favourite of those arguing against carbon prices, renewable energy, or any much change at all.

Reneweconomy says solar households face inevitable changes to the way their bills are packaged after the Australian Energy Market Commission delivered new rules which will require networks to impose “cost reflective” pricing on networks.

According to the AEMC, the changes will not only cater better to different patterns of consumption, they will benefit all consumers in the longer term as lower peak demand reduces the need for spending on infrastructure, and they will likely result in changes in tariffs to encourage households to avoid switching everything on at peak times, or at least pay for the privilege, and also for solar households. It could, for instance, encourage more homes to install west-facing panels rather than north-facing panels, but the final tariffs will be up to the networks to decide.

Reneweconomy goes on the say: In effect, while the Australian Energy Regulator decides how big a revenue pie the networks can eat – and based on today’s decision it is a lot smaller than last time – the AEMC is proving rules that decide how the networks can slice and dice that pie.

The new rules also affect households with air conditioning units, as the main targets of new tariffs aimed at recovering network revenue.

The arguments all centre on fears of the networks are losing market share, and are keen to get as much “network pricing” out of the pro-sumer as they can. The pricing set and recovered from different consumers, says the AEMC, with the key factor to determine how much consumers pay being their individual usage pattern or load profile.

The bit we love sic most “This rule change will not actually set new network prices – that is a role for the networks themselves and the AER. It does create a new requirement that reveals the cost of people’s energy choices,” AEMC’s Pierce said. Other AEMC quotes “Under these changes, we estimate around 70-80 per cent of consumers would have lower network charges in the medium term…Research undertaken since the draft rules were released for public consultation in August shows network prices are likely to be lower in the long run with cost-reflective prices,…

Research shows average residential charges could reduce by $28 to $145 per year. Households which use power at a steady rate through the day will receive the biggest benefits…Based on Victorian trials, we also found a small business could save up to $2,118 or 34% of its total annual electricity network charges by using less electricity at peak times for just 20 hours per year when networks are congested,…

Once the new rule commences on 1 December 2014 network businesses need to start consulting on their new tariffs and submit draft proposals to the AER in late 2015 for new prices that will start no later than 2017.”

Head spinning – it should be!

Our final word: We suggest it is because the term gold plated is different to redundancy in that the former highlights the risk of stranded assets.

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ChAFTA – ‘real’ big deal – but!

On balance is a fair term when describing trade. However, when you say Free Trade there has been some disquiet across a number of industries. Clearly there are some clear winners and some areas of concern apparent from the China Australia Free Trade Agreement (ChAFTA) signed, 17 November 2014, between the two countries. As with all good stories comes a more interesting one. How to make it work will come in time. It is time that is most important. If you think culturally, something becomes obvious – Western world thinks 5 years is a good plan, Eastern World sees no sense in less than 10 years and prefers 100 years. So is it about plans or planning?

If you did not already know – NZ released a press announcement on 7 April 2008 that it signed a Free Trade Agreement with China. For reference go to chinafta.govt.nz – as far as we can tell the last press release was 12 April 2013 on progress on that sight – maybe someone else knows why?

One topic on the official NZ site is the comment: Are you ready for China, and that forms the discussion from this point.

Starting with two words that seem popular – collaboration and cooperative. We find a world of difference yet seemingly very similar words. It is how they operate that matters. One is a verb and the other an intransient verb – inner or outer if you prefer.

To collaborate suggests to work with others and is an intransitive at an intellectual level whereas the Australian version of ChAFTA is missing encouragement of cooperatives to take advantage. Why is this important? Because it is yet to be fully explained what is the level of risk. Risk of the franchise is the more important thing to work through when considering the deal.

The talk from the positives claim it will build on the indications from China that it values a further deepening of our trading relationship. For instance, the setting up of a ‘settlement hub’ in Sydney, based on Chinese Renminbi exchange. This hub is designed to make doing business with and in China easier. While restrictions to trade and tariffs ranging from dairy products, wine, processed foods and pharmaceuticals, to processed metals, plastics, medical devices, cosmetics are lifted. A very strong point is also being made that a new mechanism for resolving non-tariff barriers to trade which have caused so many issues with the implementation of previous FTAs is part of the positive. That said, not all are happy and it is not necessary the raw material suppliers it is also those that realize there is a lack of the detail and effectiveness of this mechanism and all is yet to be tested.

Another concern is anti-dumping may be not be possible as the ChAFTA only uses the wording ” full access for Australian producers to trade remedies available under the WTO, including anti-dumping and countervailing measures.” Which like Australian Intellectual Property is often seen as an unnecessary barrier by Chinese firms. That said it is claimed China is moving towards more rigorous protection of IP as a natural progression. Some experienced people in this area may be saying – waiting – waiting – time will tell!

The positive also argue that while the service industry will no doubt benefit the Chinese market is good news for manufacturers as they will often be able to incorporate Australian manufactured products in their offerings.

Architects, for example can partner with local Australian suppliers to offer broader solutions to Chinese needs. Healthcare providers can similarly partner to tackle the China market. Other restrictions being relaxed on services will clear the way for Australian equipment and technology suppliers. The later point is claimed as a win for innovative technology and product suppliers.

One area of both opportunity and concern is the easing of restrictions on the use of imported Chinese labour. That labour source can undermine workers’ conditions and the competitiveness of firms operating under Australian law, so who wins? Comparative advantage is what the economists would argue would determine the winner.

While the positive argue it is all good. They also acknowledge there is no doubt China benefits greatly from this agreement and with that will come greater competition and threat to Australian business. It then means the Australian government must be more active in follow up on industry concerns as the details of the agreement are revealed and issues emerge. The difficulty in this is it is actually counter to the current government’s intention ‘of open for business’. It is even more difficult if you consider the need to collaborate outside of the cooperative of Australian Values.

So from all this comes the ‘real’ issue of not knowing about the mechanism proposed for addressing non-tariff barriers. Kindly provided is the following summaries to assist highlight what might be of concern. Not in any particular order:

  • Customs-related issues: – import tariffs, onerous customs procedures, including customs valuations, other import taxes and charges, rules of origin/certificates of origin, market access quotas
  • Technical issues – standards and certification: conformance testing and certification requirements
  • Other internal regulations issues – internal taxes, restrictive import licensing agreements, visa requirements and work permits, ownership and investment restrictions, banking and foreign exchange issues, governance and competition-related issues, differing processes for obtaining government approvals, transparency and fairness in tendering procedures for government contract and in the – award of tenders, ineffective enforcement of intellectual property rights
  • Social or market-related issues: staff recruitment, local business culture.

It is suspected that these barriers in China are extensive and complex.

In addition, it needs to be appreciated that arguably Australia’s largest barrier to trade, particularly in the services sector, is the very low level of mandarin speaking skills and understanding of Chinese Confucius-based business culture by Australians. Add to that the comparatively low level of ‘in country’ trade development support offered by the Australian Government and the need for Australians to invest considerable time and resources necessary to build up relationships before any deals can be concluded are also important factors.

We also seem to forget the high level of competition which Australians will face not only from European countries that have been far more active in Chinese markets in recent years, but also the very strong presence of mandarin speaking Taiwanese business interests who will be actively chasing service market opportunities.

Despite the current level of political rhetoric being generated about opening up ‘services-based’ markets in China, the reality is likely to be quite different. Only time will tell!

So was it so clever to have financial services hold the key to trade that is controlled by exchange. What is different for building trade over services is the key advantages of building trade around ‘hard products’ (commodities and manufactures) is that they are ‘language and culture’ neutral; if the price is right and the technical and other barriers can be addressed, market opportunities can be realised. Simply put the agenda is obvious and transparent.

As we see it the hurdle that many Australian companies within an exchange will be the need to learn and understand the soft diplomacy required in bedding down arrangements as the cultural context of business is different to that of the West.

A mixed blessing is probably the best description. A number of major concerns with this agreement:

  1. Firstly there is no mention of China needing to float it’s currency to achieve a more honest and realistic exchange rate.
  2. The agreement favours large-scale innovative makers and mining.
  3. Maintaining small to medium business input will be difficult.
  4. China is not required to place a carbon footprint on it’s export products, an economic advantage. In addition Australia does not require imports to place a carbon footprint on products. Should such a footprint be costed in real terms local manufacturing competes.
  5. China’s agreement with the USA may result in pollution issues being costed.
  6. We have heard no analysis of any imbedded uncompetitive clauses that may have a detrimental effect on Australian export business and local business alike.

Meanwhile back in NZ. After signing the NZ/China FTA Plinius Audio based in Christchurch NZ spent almost 5 years getting the CCC approval process to work for its products to enter China having been tested and proved compliant here.

Back to the now in Australia we are having our own ‘realities’ where according to our agribusiness contacts China is always going to control raw materials into China, it is a balancing act between feeding the people with Grain, clothing the people and exporting, and manipulating the price of commodities into China. Why? Because if they lose too much control, they cannot keep the rate of growth in the range where they have it. It follows that if China’s economy slows down it has huge implications not just for China, but for its main trading partners, of which Australia is a major one for Raw Materials.

Whether it is perceived or ‘real’ most feel the so-called free-trade agreements and other international contracts zap control from sovereign nations and hand it to rootless instrumentalities, undermining the role of governments.

It all culminates with: Planning, the timeframes that each culture believes plans should be projected forward and whether your side is proactive or reactive and when to be so inclined.

Relatively stable – but out of control – added costs

Your real energy costs are the networks. Interesting statement and arguably true. But is more gaming going on than meets the eye? The October 2014 energy bill arrives, and despite having negotiated a better energy price for your Victorian based small to medium sized business, you see you are paying more. Why you ask? You have a new energy price, no carbon price added, do not have solar, have reduced your load through energy efficiency measures as was encouraged and expected to be better off. The concerned business sent us their bill for analysis and what stood out.

From the Energy Retailer:

The unit price of energy had = reduced 33% – good.

The Retailers ‘other charges’ introduced new fees = increase 18% – bad

The Retailers LRET liability passed to you = increase 69% – bad

Therefore after paying a lower energy price and the Retailer contract exchanged, you find increased fees and passed to you their liability for the shortfall in their obligation on environmental charges.

From the government:

Relatively stable on state government imposts = good.

Therefore there are no new imposts from government – yet.

From the Networks:

Peak consumption charges = up 16% – bad

Off Peak consumption charges = up 7% – bad

The net effect on their total billing from the changes about 14% increases and that you can clearly see it is higher than inflation estimates. When you consider the business did expect a net reduction of 13% – it is another price shock they did not see coming – so much for cheaper electricity!

From an environmental perspective the good thing is the business reduced their carbon footprint about 8% through state government offered energy efficiency measures. At least they can have a conscience vote to please!

As has been said previously, the energy industry is the only industry in Australia that can avoid the contract terms as it suits. What is not helpful is the AER Determinations of late that introduce ‘may do’ As opposed to ‘must do’ in their wordings of onus for the industry. You could say there is a lot of water in that soup!

Prepare for unexpected climate events – but can we?

Reported is the driest ever on record and hottest ever recorded for the period, and OMG might be the response from agribusiness in those affected districts.

First look at these three stories:

South Australia and western Victoria head into drought after dry October

Catherine McAloon, Friday November 7, 2014 – 15:34 EDT

“The weather bureau’s latest drought statement shows severe rainfall deficiencies have developed in western Victoria and south-east South Australia.

South Australia recorded its driest October on record.

Australia-wide, it was the seventh driest October overall, but maximum temperatures across the country were the hottest ever recorded for the month.

Climatologist Lynette Bettio says rainfall from July to October in parts of western Victoria and southern South Australia was among the lowest ever for that period.

“”These are percentile rankings, so if you lined up all the July to October periods on record, starting at 1900, which is when we start our records, this July to October period, those areas covered by the rainfall deficiencies, which is much of western Victoria and southern parts of South Australia, would be in the bottom 10 per cent and the bottom 5 per cent,”” Dr Bettio said.

Richard Thornton, of the Bushfire and Natural Hazards Co-operative Research Centre, says the dry conditions could mean bushfires develop sooner than expected.”

Academic says climate extremes the major problem for farmers

Michael Condon, Friday November 7, 2014 – 15:27 EDT

“An academic says climate change will not be catastrophic for farmers, as they can manage any long term change.

Agricultural scientist Professor Richard Eckard, from the University of Melbourne, says extreme weather events like fire and flood do more damage to farmers and farming viability than the long term nature of any climate change.

“”That is where attention should be focussed,”” Prof Eckard said.

“”Because the real threats are dealing with the extreme weather events.

The attitudes are slowly changing to recognise that there is something changing in our weather.

I think a lot of the farming community might say that that is part of the natural cycle but regardless of whether or not you think it is a permanent change or a natural cycle, it does represent a change in what we see in the extremes.

A heatwave in November is one example of that.

Any gradual change we can adapt to over time, if is a gradual increase in temperature you can start breeding different animals or plants in that direction to deal with those changes.

It is really the unexpected extreme events that will catch us unawares that we need to be prepared for.

I am talking about the floods, the bushfires the extremes in temperature, in unusual times throughout the year,”” Professor Eckard said.”

Time to get serious about land use and emissions

By Stephen Bygrave on 10 November 2014

“Agricultural emissions in Australia could be responsible for over half of Australia’s total emissions. The land use sector has the most to lose, and the most to gain from climate change. Following discussion with farmers, it’s clear many of them are looking at ways they can stay on their land, and even make it more productive in the face of the changing climate.

There are those already revegetating their land, and experiencing the benefits of doing so. Others are looking to keep their topsoil, that otherwise blows all the way to Antarctica, with methods such as no-till farming.

Our research also found that just leaving native forests to recover could draw down more than 10 year’s worth of Australia’ total annual carbon pollution.

The recommendations in Land Use: Agriculture and Forestry are not radical – no more than the IPCC calling for global zero emissions is radical. They’re things that some are already doing, and that we must do if we’re to inhabit the planet into the future.

In fact one thing the fifth assessment report does very clearly is provide even stronger evidence that we’re already feeling the impacts of climate change. As if we needed it. We’ve already been in conversation with farmers who’ve been forced from their land, largely because of climate change. Farmers like John Pettigrew in the Goulburn Valley don’t bulldoze their 10,000 peach trees if there’s any hope of things improving.

We’re heading into a hotter, drier summer in a country where hotter, drier summers have become the norm.  In fact over 75 per cent of Queensland & northern NSW are approaching four years of drought now, and the western districts of Victoria look set to join them.

Even the National Farmers Federation, based on ABARES data, acknowledge that “without actions to adapt to a changing climate and to mitigate the effects of greenhouse gases, Australian production of wheat, beef, dairy and sugar could decline by up to 10 percent by 2030 and 19 percent by 2050.”

One of the pathways identified in our paper is to reduce livestock by 24% in the intensive zone and by 16% in the extensive zone. This matches the trend of Australians overall eating less meat, and allows farmers to take control of their production before the decisions are taken out of their hands.

This number is fully encompassed by the controversial live export trade – meeting this target would still allow for consumption of far more meat than is healthy for everyone in the country.”

Co2Land org asks: What does all this mean? We do not think it matters whether is it anthropogenic or not as the cause. However, we do care that what contributes to our wellbeing needs us to care. You see our markets need a healthy environment as much as carbon life forms do too. So even if we just assume people, and our activities are 50% responsible for the change in climate the measure still needs to be based on what if we don’t abate and what difference will that make.

Without complex modelling a significant number can still be indicative of what could be avoided. And, what must be avoided is the tipping point of climate change – the point not imaginable.

Digitally enhanced – ‘friends of’

Are you a moderniser or values driven? It is suggested it is a logical postulation that evades resolution, and is a true conundrum for the politic.

To illustrate, Douglas Carswell is authentically a modernizer and has quipped, in his book The End of Politics published in 2012, where he argued that “The digital revolution will do to grand planners in the West what the collapse of Communism did to socialist planners in the old Soviet bloc”. “Reform” in the 19th century meant increasing the franchise until it eventually included the entire adult population. In the 21st, it means “iDemocracy”, the crowd-sourcing of politics. We were asked where did you read this stuff? The Telegraph.co.uk, 29 Aug 2014, was the reply.

Thinking about this in a local setting – it occurred; The Independent senators have a handle on these problems and in particular how to save our country from being a dependant service industry – the advent of the exit of manufacture. In other words they are thinking on how to rally ‘Friends of Manufacturing’. The simple question is why is Australian politics having so much difficulty understanding the dependency issue and what then occur is causal of other uncalculated change too! History is full of such things that happen, and in particular that they were results of as opposed to outcomes of the change.

Change is always a difficult path and it is not as easy as engaging in old style reform. In a visit to the UK the tour guides constantly delivered the message that to save England from descending into moral decline they built churches that also served as an economic reform.

The difference today is renewal requires a different form of discipline – discipline to resist pandering your own ego. Why because eidetic recollections are called for, and you don’t have time to perform lengthy research for your answers, or just call on a higher ‘authority’ – how do you do that? Google or DuckDuckGo it of course, for the instant answers for the crowd.

It follows that the danger is you will selectively pick what suits ‘you’ and ‘your’ ideals and therefore cannot be empathetic and understanding of what is ‘the going concerns of real life’ – think of it as viewing life as a theme park. This simply means the view is an invitation to join the like minded and is sufficient to set change in the right direction. What examples let us think that this is a problem? The political scene in the UK illustrates the point very well, as reported by the Telegraph – being it “showed a weakness for the political equivalent of botox”. As a sense of humour must prevail – does that explain the goofy grin that seems printed on our PM’s face!

So is being a ‘friend of manufacturing’ the illustration of a present-day confrontation of social systems and civilizations and implies a confrontation exists between various systems of values. This implies the belief that as the creations are part of given social forces, each type of civilization embodies the values of the respective social forces.

Therefore what is needed for such a move to be successful is we distinguish between the sociological-politological and the axiological approach to values. You could argue the former disregards the intrinsic substance of value. The axiological approach is based on historical experience, on the social situation, on the interests and ideology determining the way in which a social group, a human community, a society ascertains values, non-values and anti-values. You could also argue, there is a correlation between these two approaches. We could say if you define political values as political relationships, institutions, organizations, views and ideas resulting from the transforming, creative sociopolitical practice of the social forces that meet the requirements of social progress and of the development of human personality on a social scale.

What this does emphasize is the special role of political values. Of course you then might say if you believe this you accept there is no place for the intrinsic character of political values.

That is not the case here, we believe to identify the issue, you need a group that can intrinsically recognize and then know where their mediating role in the creation-and, respectively, assimilation-of these values is needed. Therefore the ‘friends of’ person of today ‘experiences’ the values centered on political values. For all the differences between civilizations and their values, the common fundamental interests of mankind—the necessity of setting up a new economic and political order, of creating a new climate of peace and cooperation among states and peoples—require the assertion and promotion of common, general, and acknowledged political values. So ‘friends’ become political no matter what.

So what is the conundrum? It is the political values that interfere with real life experiences and that interferes with modernising. The question then becomes how do you prevent the hollowing out of your attempts to modernise? Then you develop your ‘friends’ and then along come the ‘rent seekers’ wanting to influence their interests.

If you then argue it is a matter of ‘friends’ being pro-market and not pro-business you will come across the issue of old fashion values and entrenched responses of we need more regulation. Then we have another issue – the policing of the regulator? How do you do that? By reverting to your values system you then effectively hollow out modernising.

What is the answer? Maybe we just postulate – change will occur, but what we must do is accept that where non-conforming activities are evident it is that anticipated remediation contingencies also need to be in place. What is this meaning? It is the place where conforming bodies are confronted by non-conforming bodies with pro-business friends. It is happenings and is akin to corrupting practices. You might say they will plan to achieve a competition to fail event. To be concluded over time as to whether the issue evades resolution!