From Kyoto to Bali, Climate change’s remedies, an uphill task

1. Solving the right problems

I am neither heretical nor a maverick on this issue. Contradicting views are seemingly as well as equally convincing¹. These contrarians enumerated their own findings to debunk the hypes. For one, ostensibly, climate change results in 20% to 30% of plant and animal species extinction is unfounded ²(The finding:: during the past 2.5 million years, a period that scientists now know experienced climatic changes as rapid and as warm as modern climatological models suggest will happen to us, almost none of the millions of species on earth went extinct. The exception was about 20 species of large mammals and many dominant trees and shrubs of Northwestern Europe.) IPPC’s (Intergovernmental panel of climate change) latest report’s ³ highlight: if temperature increases by 1 to 3 degree Celsius, up to 30% of species at increasing risk of extinction and above that significant extinction around the globe. IPPC’s assertion is towards the possibility of future extinction.

The article also quoted an Oxford University professor’s findings 4 that temperature changes do not correlate well with changes in the distribution or frequencies of tropical diseases, warming has not broadened their distribution and is highly unlikely to do so in the future. IPPC’s latest report highlight: increase in temperature will impact our health by changed distribution of some disease vectors, increase burden from malnutrition, diarrhea, cardio respiratory and infectious disease. The author (also a professor of University of California) stressed the incongruities in no small part were due to living things respond to many factors in addition to temperature and rainfall, In most cases, climate-modeling-based forecasts look primarily at temperature alone, or temperature and precipitations only.

The article also quoted another article from “American Scientist” 5 that Mt. Kilimanjaro could not be melted from global warming. Mt. Kilimanjaro was cited by US ex-vice president Al Gore as one of the global warming case in his book “An inconvenient truth”. That another article contended glacier melting could not be global warming directly. The air temperature at the altitude of the glacier is below freezing, it is well nigh impossible to melt the glacier. This means that only direct radiant heat from sunlight could be warming and melting the glacier and its melting pattern was consistent with radiant heat but not air temperature. IPPC’s latest report only elucidates the facts of glaciers receding, but cagey about the cause.

The overarching question is: Are deleterious effects of global warming overblown? It is difficult to wrangle at this time due to its hideously complex nature not easy to make snap judgment, we also need to account for the disputes do not span the full gamut that will be shown in the following paragraphs. The naysayer said owing to the world is pumping trillion of dollars and enormous amount of efforts to counter a decades’ endemic problem which may eventually prove us wrong by deviating our focus on issues required much more urgently attended, such as poverty. Counter to this contention is the argument that we fail because we are overwhelmed by visible clues, but blindsided by the invisible fermenting issue like global warming. There is an unremitting need to pursue an immaculate and unadulterated truth and a balanced view of perspicacity and clairvoyance out of welter of ambivalence. IPCC’s latest Forth Assessment Report, was cogent due to it based on an array of observations and experiments, and assessed the likely occurrence of each event. It cut down those controversial allegations of greenhouse effects, concentrating on pristine conditions of those would have major impacts on human lives and eco-systems and suggested mitigations.

Sea level rise (IPPC’s assessment does not assign the likelihood, because understanding of some important effects driving sea level rise is too limited. ). The melting of glaciers, Greenland ice sheet, snow running off from land and heavy rainfall cause sea level to rise. IPPC’s report projected sea-level rise will affect low-lying areas with large population of Africans and heavily populated mega delta regions Ganges Delta of eastern India and Bangladesh is particularly vulnerable and in South, East and South-East Asia are exposed to increasing risk of flooding from the seas or rivers.. 6 The most severe impact of sea level rising is inconvenient due to resettlement, but groping about resettlement is not an easy task to execute in a caprice, many are hustling and bustling cities with large population, it is surreal to move legion of people in haste and many live by the sea for a living.

Frequency of hot extreme, heat wave, and heavy precipitation (IPPC’s assessment of regional scale change concluded very likely around 90 to 95%). Heat extreme during torrid summer season, people living in Europe and US across the interior areas hate extreme heat wave the most. A vagary of warm and dry air interminable day and night and it can stretch to a week long. I could empathize on the TV, people plunged themselves into fountain or flocked to the beach for cooling. The crux to survival is pliant. Old folks cannot adapt to the extreme weather have to report earlier to the heaven. Heavy precipitation means rain or snow tends to increase in intensity over period ranging from a few hours to several days. I think human beings are least tolerate to fiendish dull and sultry heat wave than precipitation. Will you then butt in the crusade to protect your interest headlong (reducing frequency of hot extreme and heat wave) enlist yourself to combat global warming?

Tropical storm (IPPC’s report: Likely, is between 66 to 90 % confidence level. IPPC confirms it is likely increase in tropical cyclone intensity.) “Several studies made a compelling argument that tropical cyclone worldwide are indeed stronger. Meanwhile, a number of hurricane experts insisted global warming play a minor role at best in the recent rash of activity, and it will be far outweighed by other factors in the future.” 7 IPPC also qualified in their Fourth Assessment Report “An increase in intense tropical cyclone activity in North Atlantic with limited evidence of increase elsewhere. There is no clear trend in the annual numbers of tropical cyclone activity.”

The cacophony of voices and ambivalence of evidence is reminiscent of the scourge of Hurricane Katrina; a category five’s hurricane was blight on New Orleans leaving mayhem behind. That area lives one of the poorest people in the US and you can imagine how much sufferings the people there are inflicted in the incident. I hope the tribulation recuperates fast and the people are living well. Some debates 8attributed the catastrophe to climate change and was proved the direct connection of the two could be feeble, but gradual warming over the last several decade couple with other conditions may intensify storm like Katrina; as hurricanes on par with Katrina have developed in the Atlantic since records began.8 IPPC qualified their findings to after 1970, as using satellite to monitor cyclone activities commenced after 1970, the record from there began; it is, therefore, difficult to ascertain long term trends. And what are relevant are the warm ocean waters that have direct causal relationship to global warming. Warm ocean waters were said the culprit to engender spate of tropical cyclone.

Though the chink of whether climate change is a causal factor, jarred with the IPPC’s. Both camps fathom the fact of tropical storms intensification is palatable and impregnable. It certainly have major consequences to the US and countries in Central America. Especially the Gulf of Mexico where oil exploration and production facilities are under threat, which cause oil price to spike that jack up inflation over the world for a period of time when supplies of crude oil are in shortage.Of course, the present high oil price is largely due to increase in global demand and speculations. Taking actions may not get you out of the badgering or extenuate tropical storm activities in the short run, the devastating effects and pandemonium they cause are worth the efforts.

IPPC’s report on storm and flood particularly on coastal areas: million more people could experience coastal flooding each year. And if temperature rises above 3 °C, according to IPPC’s prediction: about 30% of global coastal wetland lost.

Water supplies, Agriculture

The root cause of flood and drought was said due to evaporation. “As global warming heats the world’s oceans, the water molecules near the sea surface become more energetic and tend to evaporate into the atmosphere more readily. Thus the air gains water vapour This is a nonlinear relationship, meaning the effects get stronger for each additional degree of warming and the scientist is more certain about a warmer atmosphere would carry more water vapour around the globe Rain and snow tend to develop where air is converging and rising. Research estimates that precipitation intensity should rise by about 7% for every 1 °C of warming. Thus a small increase in global precipitation could mask regional and local trends that are more dramatic downwards as well as upwards. As with temperature, it is the extremes that matter most in rainfall and the lack of it, research confirmed that precipitation extreme seem to be increasing in general across the planet mid-platitude”

“There is no conclusive evidence that floods are becoming more frequent or intense due to climate change because there are many factors involved other than changes in temperature, such as land use, soil condition, flood control device and deforestation.” “Seasonal timing is critical when it comes to flood and drought”

The scientist discovered that southwest Australia is in danger of severe drought; the southwest tends towards dryness during El Nińo years, deforestation during earlier years and countryside landscape evaporate less moisture into the air perhaps exacerbate the drought. Scientists (also being confirmed in the IPPC’s report) have verified that poleward shift in the storm track that girdles the Southern Ocean, encircling Antarctica. The low pressure centres that race eastward along this track are the source of nearly all the Perth rainfall. The storm track’s winter position is likely to shift even southward, and this could mean real trouble for Perth and vicinity. A 2 °C warming could produce a 20% reduction in rainfall across much of the southern Australia. Were this to occur, degradation of eco-system, considerable loss of agricultural capacity, and severe water restriction will cost Australia billion of dollars.

It was said that Ocean warming also contributed to changing weather. “Should a large patch of ocean warm or cool substantially, it can take months or years for it to return to typical temperatures. During that time, the anomalous water can reshuffle the climatic cards, bringing persistent wetness or dryness to various part of the globe such as El Nińo and La Nińa. They are undisputed champion in drought making” “There is some evidence that the warm phase of the Atlantic Multidecadal Oscillation is linked to a greater chance of drought in the US Southwest. Similar cyclic warming and cooling across the pacific and Indian Oceans may play a role in sustain drought in US Southwest and South Asia. Climate change can exacerbate this phenomenon by promoting more evaporation from dry areas creating more severe drought.

IPPC report on the impacts of water supplies: 1. increase water availability in moist tropics and high latitudes 2. Decreasing water availability and increasing drought in mid-latitudes and semi-low latitudes. It happens that hundred of millions of people living in these regions exposed to increased water stress. According to IPPC’s prediction, by 2020, in between 75 to 200 million of African people are projected to increase water stress due to climate change.

Nowhere in any books about global warming correlate to food price’s spike and draught erupted. Probably the correlation is quite remote. the true reasons according the latest issue of “The Economist” 9 are growing demand especially from China and India due to affluent factor; opulent farmers are switching to feed animals using more grain and rampant demand in US for ethanol (using maize crop to turn into ethanol) than it sells abroad. In Australia, it is the drought reducing crop production.

“The evidence of wetness and drought are more of natural cycles, but climate change exacerbates the patterns.” Scientist claimed. In fact, scientist discovered that warming helps agriculture. The extra CO2 in the air will help crops and vegetation to grow even rigorously, the tendency of warmer winter and at night lengthen growing seasons on average. Crops mature more quickly. Enhanced CO2 also increases some plant to deal with drought, racked up yields by an average of 27%. Albeit the crop basks in warming weather’s favour, however, dry periods are expected to grow more intense or longer lasting, interspersed with periods of intensified rainfall. These heightened contrasts are stressful for many crops. According to a study, North America and Russia would experience increase in cereal productivity by 3 to 10 %, whereas Africa and Asia could experience decline of at least 5%.

IPPC’s latest report enumerated two impacts on food: 1. complex localized negative impacts on small holders, subsistence farmers and fishers 2. Tendencies for cereal productivity to decrease in low latitudes and increase in high latitudes. Particularly in Africa, IPPC projected a 50% reduction in yield of rain-fed agriculture. Agricultural production including access to food in many African countries will be severely compromised and will affect food security and exacerbate malnutrition.

At this juncture, we are able to assess the significance of climate change. The extent of emission has a cycle following the boom and bust of the economic activities. In the wake of many mammoth size new emerging countries achieving blistering growth such as China, India, Russia, Brazil, the wealth effects accompany the up and steep linear fossil consumptions which generate more greenhouse gases than ever, because overall global economic activities are expanding. There are still tremendous uncertainties surrounding our understanding about global warming heightening incertitude. Scientists qualified their findings on small grain of truth because they are uncertain of many other possible contributing factors. IPPC is silent about the tipping point in the report but projected implications of several scenarios for global temperature rises up to 5 °C. Coalesced judgment considers 2 °C as watershed, an unofficial tipping point, beyond that is teetering, and Greenland ice sheet will be melting uncontrollably. However, till the crunch time arrive, we can envision that not being ready to react to the inveterate risk flexibly, that portent of handicap makes us very vulnerable. You cannot avert crisis by making slapdash decision that required long range planning.

Of course things will not happen convulsively, but spare a thought of a likelier scenario: The picture is now clearer for all evidence comes to light than before, it evinces we cannot dodge the problem and the odds are against us, we have to make precipitate changes. However, we have to change our behaviour and vicissitudes of life in a worldwide scale in a short time is an uphill task, and our infrastructures do not support greenhouse gas reduction and these fixed asset investments take years to construct. And worst, greenhouse gas take many years to reverse. The straw is worth clutching, the decision is seminal to step up our actions now and avoid hapless regrets in future.

Solving the right problem also prompt me to ask scientists at a pinch why it is impossible to directly tackle greenhouse gases at the atmosphere level, we can dilute its concentration, recycle it, making it porous for infrared radiation to radiate back to space, changing the substance of its composition etc. It seems none has experimented on these various methods. May be the idea is utter folly not worth the effort; after all why engage a non-scientist.

2. The Political deadlock

The Bali summit did not achieve any significant breakthrough on the quantum of emission cut. It seems to me that the tussle fermenting into verbal skirmish in between the world vs. the US. The grudging and disenchanted green supporters are seething at the odyssey of championing the course was thwarted and stymied by the US, the largest emitter, refused to sign on the Kyoto protocol to accept binding target. Without US and Australia's (Australia has ratified Kyoto protocol in Bali meeting) participation, Kyoto protocol can be regarded as ineffective, making the overall target tantalizing and becomes a turkey.

The US contended developing countries like China, India are not bound by the treaty for reduction making the treaty meaningless that I can empathize. Imagine you are doing the donkey work to help clean up the environment and others are unfettered to pollute. The one doing the cleaning job certainly is not motivated to move ahead. In the same vein, with all the biggest emitters’ participation regardless developed or developing countries will make our efforts effective. Therefore I can empathize the US position albeit dearth of euphemism and political adroitness. It is not constructive either because the efforts to combat global warming for the biggest emitter become stalemate and languishing.

According to The Washington post’s report, the environmental prosecution by US attorney office dropped sharply since 90s. And a German Environmental group’s survey 10, the US is positioned as the second last just above Saudi Arabia in terms of climate change protection efforts. This position certainly not exemplifies leadership quality. However, things are changing fast in The America, according to the Economist 11, Congress is to pass the bill of America’s Climate Security Act (ACSA) to limit and slash America’s emissions of greenhouse gases. ACSA follows the Kyoto protocol route involves a cap and trade system. The reverberations according to news’ report: among states, California, New Jersey and New York are enacting their own mandatory caps on carbon dioxide and other greenhouse gases. A federal court has upheld a California law that requires curbs in greenhouse gas emissions by car and trucks that are tougher than US standards, rejecting an argument by vehicle makers that federal law should apply. U.S. Supreme Court handed down a decision in a landmark environmental case that carbon dioxide is a pollutant under the Clean Air Act and that the U.S. Environmental Protection Agency has the authority to regulate carbon dioxide emissions from automobiles and other vehicles. A panel of US state governors has called for more alternative fuels and clean vehicle. US government issued new rules to remove more than 90 percent of the sulfur in diesel fuel by 2010.

According to the German Environmental group’s survey, EU countries have unswerving drive championing the course ahead, the kudos goes to the front runner Sweden (Sweden claimed it has cut emission by 30% and will be on track of 50 % cut by 2010), followed by Germany. Surprisingly, India, the sixth largest emitter, is not bound by Kyoto protocol, is leading in Asia, according to the survey. And the second largest emitter, China, also not bound by Kyoto, is also moving fast, from third last climbing many notches up to rank at 40. (The last is 56 positions).

In the Bali negotiation, we should recognize the fact that there are intersection in the negotiation that both the US and the rest of the world agreed upon was, in principle, we should cut emission. The chink was only the quantum of emission; it became incendiary because both refused to see each other perspectives. The UN saw if there was no initial big cut, the rescue action would be futile and damages will be irreversible. Committing to a target of 20 to 40% of 1990 level for the next 12 years and be slashed to half by 2050 of 2000 level was considered palatable, whereas in US stance the big margin was quite ambitious (The UK ‘s climate change bill fixed target at 60% by 2050.).

Some attributed the status quo to Bush Administration’s bigotry. The situation would change if next year Democrat Party wins the presidential election (it was said Democrats are more environmentally-minded 11. I think this thought is lemming, because the kernel of negotiation is representing a collective interest. Committing to a target of 20 to 40% of 1990 level for the next 12 years and be slashed to half by 2050 of 2000 level, the biggest the emitter you are, the more hesitant and circumspect you will be as to how to draw out an implementation plan to achieve that target because of uncertainty. The major sources of emissions are industry (power, cement, steel, textile, and fertilizer industries), building and transportation. The US original plan was around 25% by 2020.Mrs. Clinton said if she would be elected the following year, the target would be 30% by 2020. The UN was giving a range of 20 to 40%, and both fall within the UN acceptable range. Of course this range is difficult to pander and resonate well with the EU’s voracious appetite.

If by then the target will not achieve, will the government have to strangulate economic activities just for compliance? Very frankly, there is very little the UN can do to enforce impunity if foisted target will not achieve. Can the UN impose sanction against countries not meeting targets? Or failed countries will be sued at International Court. Not likely, even the UN has the right under treaty. Eventually, it is a voluntary act. Country likes Germany is motivated by their espoused value system to champion the environmental cause. Many are just passive followers, not as proactive as some leading EU countries. Therefore the US leadership is important. If the US gives the UN staunch support in implementation, drawing their preponderant clouts of political, financial and technological superiority, the UN can save much of her efforts. However, as I mentioned before, the US is tepid in their environmental efforts, leaving her in an awkward position, other countries are paranoid about the US sincere intention in committing to the cause. An article I read recently lambasted US tried to shirk the issue by citing China and India not bound as a subterfuge to shield her loathing commitment, leery of US’s intent abounds.

3. The Task force approach

From Kyoto to Bali, we have come this far, the emission continues to worsen, because during this time the world economy went through a cycle, coupled with the unremitting growth of emerging economies and the largest emitters are not reducing their emission, making the achievements negligible. If at each stop we cannot get all emitters to commit to action, from Bali it is going to nowhere, neither the lull to Copenhagen, as every stop we are just haggling and the ball is not rolling. If the UN can change its approach from top-down to a collaborative task force approach to gain some traction. I think we can envision faster and better results.

The current control system is cap and trade. It is formalized in Kyoto Protocol. Caps means the emission allowance set for developed and developing countries. In turn, countries set quotas on the emissions of installation run by local business. Countries manage this through their national “registries”, which are required to be validated and monitored for compliance by UNFCC. Trade is operators that have surfeit of emission allowances as carbon credits, while businesses that are about to exceed their quotas can buy the extra allowances as credits, privately or on the open market. Carbon credit is originated from economics' idea by imposing tax, a price to pay for excess emission, or get credit from environmental saving actions. It encourages companies to invest in clean technology to receive surplus allowances and use it to subsidize their fixed asset investment by receiving funds from deficit emitting companies purchasing carbon credit. Emitting company can also invest in UN approved green projects in developing countries to receive credit offsetting their excess emissions.

Some chided the EU’s Emission Trading Scheme and the UN’s Clean Development Mechanism is difficult to eke out by just looking at the price of carbon credit per ton is now at all time low of less than € 10, plummeted from € 30, the root cause is the cap for emission is setting too high, few firms are required to buy credits and the price dropped with the slack demand. The problem lies in target setting to stimulate demand. Some felt that rich countries buying carbon credits from poorer countries are the concomitant of transferring monies from rich countries to poor countries. And they see this as a windfall to the poorer countries; however, some supported the idea based on the ideology of equal emission, since rich countries polluted the environment, they have to pay a price to make good.

The task force approach is a fusion of action and result orientation; it is not to supersede the current caps and trade system, but to breakthrough the current stalemate. It quells the fear of political risk, a fait accompli, the governments engulfed. 12 The task force is an advisory body and also monitoring group, it can tailor environmental solutions to local circumstances, also making sure the progress is on the right track. The task force consists of negotiators, environment experts and auditors. They first use 80/20 rule to choose the hottest emission spots (emitting the most CO2). The hot spot is a control unit can be as small as a city or town or as big as states or provinces. It depends on emissions intensity and concentration and administration convenience. These hot spots are assessed and evaluated annually. It also means we always target our efforts on the largest emitters to maximize the results.

The task force group will work with local government

- Negotiate with the sheriff, whether hot spot is a state, city or other type emission control units. Negotiation becomes easier based on known knowledge of local emission; local government doles out concrete plan, follow-through execution. Both sides are easy to reach actionable target and milestones.

- Push for infrastructure and legislation changes; Infrastructure changes ameliorate emission by achieving the highest and faster outcome. Infrastructure change means switching from fossil use to other infrastructures supporting natural gas, nuclear plant, solar, wind power, Hydroelectric, tidal and wave power and also include adopting clean technology to transform and contain fossil consumptions. By so doing, we are controlling emissions of Industry and Buildings which are causing 70% of total emissions. Chasten offenders to change behaviour is quicker than persuading them not to do so, though no one is pleased to heavy political fiat. Galvanize local government to legislate draconian ironclad rules move things faster.

- Diversify energy sources according to suitability and efficiency. Advisory group can tailor to local circumstances to make use of available clean energy resources. This is to draw on the Advisory Group’s experience from working with other hottest spots and other countries’ best practices.

- Marshal local officials to visit countries already adopted similar technology and best practices. It facilitates a penchant for learning before change begin and gives experience through real life observations to motivate local government making change.

- Rev up in arranging for finance with worldbank or other financial institutions. This is to assist developing countries has the wherewithal to pay for technology use and ensure the success of the project.

- The task force is also giving feedback regularly on the emission results audited. This is to acknowledge progress and follow-up action taken.

- The task force also works with developing countries on environmental master plan, so that in the course of their economic development they are using clean and diversified energy resources, they can learn the rope faster if task force imparts experience how to cope with environmental protection. This is to prevent unruly sprouting of new sources of emission hot spots in disarray resulting in UN’s fire-fighting later on.

Diversified energy usage is a balancing approach which fit well (suitability) to the environment, as we have many choices for our selection, so that it will not disrupt the price of the clean energy market as a whole when every countries rush to install new infrastructure, such as nuclear plant. The US is enamored of nuclear technology, according to The Economist 13, the latest design incorporate “passive safety” system that can prevent a melt down during an emergency without operator intervention. The economist also cautioned the new design use regarding toxic waste can be inimical. “After three years of use, the fuel is depleted of most fissile uranium but has accumulated long-lived radioactive materials that cannot be burned in conventional reactors. At the moment most such waste is stored near the plant until it can be moved to a permanent facility. But no country is yet operating a final disposal site for highly radioactive nuclear waste.” The Economist said.

UN can provide incentive by rewarding those achieved the target by lowering their funding costs or subsidize at preferential rate for UN approved projects. Countries are free to opt for assistance from the task force, but the task force’s role to negotiate and monitor emission never change. In other words, countries do not receive assistance still need to lay out action plan and milestones of how to delist, say, from the top 20; the action plan facilitates measurement and monitoring process.

4. Miscellaneous issues:

Technology transfer:

One of the biggest issues of climate change is about technology transfer. Sequestration of CO2 is a big technical problem facing many developing countries using coal-fire power plant. According to the Wall Street Journal report, China is particularly interested in this technology because 70% of China’s electricity needs are from coal-fired power plants, so they want to learn carbon capture. Coal and oil also make up of Indonesia 70% state owned power utility. In the Bali meeting, UN postponed until the following year to fund an untested technology which captures and buries carbon dioxide emitted from power plants that burn fossils fuel.

The developed countries cope well with technological problem. The US position made clear upfront they wanted to protect their intellectual property. They believed protecting intellectual property rights provided economic incentive to stimulate innovation. “It is the reason US negotiator back the idea of an “International clean energy fund” as part of the post-Kyoto accord to help emerging countries like China and India pay for cleaner and more efficient buildings, power plants and other facilities. But they vowed to reject any fund structure that might slash incentive for US companies to develop new technologies.” The Wall Street Journal reported. The developing countries view it as rooking, without their demand for new technology; the innovation is just an idea. It is more than just market force determining price. However, a moment of thought vicariously, in US, it is almost impossible for government to intervene the private sector about pricing under normal course of business. The task force advisory group can evaluate the practical usage of the technology to decide whether to buy it wholesales (all countries benefited) or licensing (some countries will benefit only) it in a long haul, evaluate sourcing and recommend to the host country.

In US, the belief to protect intellectual properties always conflict with moral challenges, and eventually they yield to the moral request. The typical example is generic drugs. The congress even passed law to prohibit brand-name drug firm extend the lucrative patented products (about 80 to 90 % margin) and speed up generic drug approval process, that is a magnanimous gesture for the lower rung Americans, also to the developing countries but bad new for home-grown pharmaceutical companies consider the sector is now in a doldrums. According to the Wall Street Journal report: “Fewer new products in the pipeline and about three dozen existing products patent protection will expire in the next five year become generic and new products also required FDA’s approval, the drug companies blame FDA approved very fewer drugs today.” This shows how highly regulated the industry is. If we read in context their decisions, we should appreciate their generosity they work within the law for the common good (You may have different view when come to climate change). They are even generous when you are their allies. The US negotiator in the Bali meeting after hard bargaining eventually yielded to the request of the developing countries clamoring for technology transfer.

Deforestation

Indonesia upped to be in third position of largest emitters due to deforestation. I am flummoxed by the preposterous demand that Indonesia jockeying other countries to make restitution in order to preserve the forests. Green movements become a money gouging activity. Many Indonesian large farm operators clear land for profiteering motives, such as oil palm plantation, or the loggers, paper and pulp companies chopping the log. Deforestation is a heinous act, it increases the odds of flooding and landslide that endanger lives, because water flow more quickly without obstruction by tree and undergrowth. Stop burning is good for their own country and the neighbouring countries in term of their pernicious effects on health, aviation, tourism and other economic activities and also reputation of environment protection (CO2 emitted from fires and bacteria in the newly exposed soil may release more than twice the amount of another greenhouse gas-- nitrous oxide). If stopping this heinous act is for their country own good, it is inextricable why other countries should make restitution for such act. Ordinary small farmers inure to slash and burn should learn new farming skills, the Indonesian government should subsidise them to make transition happen.

Another issue is forest fire control and management in Australia, Europe and the US during warm season, forest fires episode rekindle us every year that array of forest fires burning days and nights unstopping. Imagine how much CO2 being produced in the fires. To strengthen prevention of forest fires during dry season should bring into the agenda.

5. Epilogue
The earth is a self-balancing globe, if we live and follow the natural path. If we are taxing the earth profusely, one day it will dawn to us that we pay hefty price to extricate us from come-uppance. When coping with rebalancing, it is more haste less speed.

Notes:

1.These mavericks adopt a different view. They believe global warming is happening, but the risks are overblown. These include Bjorn Lomborg’s book “cool it” , also, Daniel B.Botkin, president of the Centre for the study of the Environment and professor emeritus in the Department of Ecology, Evolution, and Marine Biology at the University of California, who claims not a naysayer, but some of the environmental facts are distorted. He wrote an article “global Warming Delusion” on Wall Street Journal which I quoted as contrary to some main stream environmentalists had claimed. Other interesting contrary view include a British high court judge retorted some inaccuracies in Al Gore’s book “An inconvenience truth” .I am not a scientist. Most of the scientific facts I quoted in the article are from the book “The rough guide to Climate Change” by Robert Henson. He interviewed many boffins of this topic and had the chapters reviewed by them. So, I think it is objective, balanced and safe to quote them in my article. Any mistake is my own.

2. Daniel B.Botkin’s article “Global Warming Delusion” on Wall Street Journal

3. IPPC’s (Intergovernmental panel of climate change) latest report. The report is objective; reader can view Forth Assessment Report by pressing CTRL+ CLICK Download . The report also cautions that is subject to final copy-edit pior to final publication

4 Prof Sarah Randolph of Oxford University show that temperature changes do not correlate well with changes in the distribution or frequency of these diseases.

5 Daniel B.Botkin’s did not give writer’s name written this article in Journal American Scientist.

6. Other report enumerates the top ten cities affected by sea-level rise are Mumbai, Dhaka, Guangzhou, Ho Chi Minh City, Haiphong, Shanghai, Yangon and Miami.

7 “The rough guide to Climate Change” page 121

8 “The rough guide to Climate Change” page 125

9 The Economist December 8 2007

10 The ranking is based on survey by a German Environmental group, based on pollution level, development, and overall environmental policy as evaluation criteria.

11 The Economist November 17th 2007

12 According to an Australian report: “But the (Australian) Government maintained it would wait until it receives a report by economist Ross Garnaut next year before setting binding targets. “"(The government) demanded binding targets immediately, now the Rudd Government has adopted our position of no binding targets until you can work out the costs and consequences to your children and grandchildren."

China was lauded for their commitment by foreign media: “The Chinese contingent impressed many other delegations with its willingness to seek action against climate change and was regarded as “on board”. According to newspaper report: As far as Chinese government’s intent is concerned, they realize how the fast pace economic development is destroying their environment rapidly. They prefer a slow, steady but harmonious approach to preserve their environment. But the target to reduce emission faces strong resistance at provincial level. As the local governors’ performance are hampered due to ineptitude in handling emission technical problems. Adopting the target means suppress the economic activities which is politically risky.

13 The Economist September 8 2007

Watching the watchdog, how?

The Bloomberg News on 25 May 2007 read: “The united States Public Company Accounting Board that regulates accountants has scaled back Sarbanes Oxley Act’s auditing requirements. The Board approved by 5-0 rules that will allow auditors to focus on the items most likely to trigger financial misstatements. The revised auditing standard also permits accounting firms to use more judgments, do fewer checks and eliminate unnecessary work. The new audit rules will be aligned with guidelines for company managers, approved by SEC yesterday, aimed at simplifying compliance.”

It is indubitably that the quality of external audit has markedly improved over these years. The contributing factors seemingly are: First, external auditing firms have reverted back to be independent with stern rectitude and prepare to draw line with suspicious interest in conflict engagements; this gives the objectivity to the reporting accounts. Second, most listed companies in NYSE or NASDAQ are audited by the big four, they have the resources and competency to deliver high quality audit; they attract the cream of the crop from the employment market, have established in-house practices, strong technical research capacity to maintain high competency; and most of all, they look their laurels. Third, PCAOB auditing makes external auditors more vigilant not to make headlines for silly misnomers. Forth, SOX has given PCAOB almost unencumbered power to regulate the industry. Rashes of nefarious top guns involved in financial legerdemain were charged under criminal offence that also have deterring effects.

As things are, the apocalypse of improved audit quality is the upshot of the PCAOB auditors at their wit end. PCAOB auditors find they are now reviewing a near consummate job. The job of PCAOB auditor essentially is just another layer of review by different entity. As things go, they can resort to nit-picking, but what is the meaning of finicky about trifling matters? Another Achilles’ heel vitiates PCAOB auditor effectiveness is: unlike the external auditor, they do not have the ground knowledge of the audit client, especially in the circumstances auditor has to make judgment; they simply have to take the external auditor’s judgment prima facie. Even though they have the advantage of hindsight, wrong judgment may take longer time to surface and not in the nick of the time exposed during PCAOB’s audit.

Entwined with the conundrum of lack of ground knowledge is the problem of group think. Many PCAOB auditors are previously external auditors, some even the retiring partners of the big four. It is easy for external auditors to cudgel their brains to mind-read the next move of PCAOB’s auditors because they are receiving same kind of training, some coming from the same firms, adopting same approaches. It exposes chinks in auditing the external auditors if mind-reading pattern of the PCAOB auditors becomes tractable? It is ineffable, the external audit firms are also recruiting sagacious auditors, they learn the tricks fast to outfox you than you can imagine. In essence, how these kinds of mind games impregnated with audit quality? In a sense, does improved in audit quality means PCAOB can do fewer checks in the future to save resources? The logic of contention goes like this: When the audit client beefs up corporate governance (Increase in compliance costs) and earnings quality, the risks are reprieved, external auditor (The first line of assurance) therefore can cut back their checking, and regulatory body can even scale back their audit, so the total spending as a whole becomes efficient. Spending at the source (audit client) and first line of assurance are far more efficient because it gives stakeholders the confidence rather than expending social costs when damages cannot be undone. My article is to examine this flimsy contention and how to further improve audit quality and handling judgment issues?

The flaw of the logic

The major flaw in the logic above is an assumption presumes the three parties can orchestrate seamlessly in reacting to each other responsibilities to achieve greater efficiency as a whole. In reality, it is a forlorn hope that the maze of relationship among the three is jarring and dynamic than what we think. The statutory demand for corporate governance is a fait accompli driving up fixed compliance costs. The board and audit committee however can only spend fixed hours in a year dabble in major issues. That leaves the intense monitoring function to the full time internal auditor. Perversely, in some cases, the close monitoring function is impinged if internal audit function is outsourced or internal auditor lacks independent (too close to the management resulting pussy footing because they are also employees). Some subtle changes are latent in the capricious business environment may not be immediately unveiled on time to catch the attention or being communicated to the upper echelons of the governance body, let alone the annual visit of the external auditor.

There are limitations in the purview of external auditor can do too especially under time pressure to produce audited accounts, and when resources are overstretched during peak period. Auditing from client’s schedule rather than comb through stack of files makes auditors’ life easier (Here I am not implied whether it is apposite auditor should rely on client’s schedules or pontificate audit client has an intention giving schedules to delude auditor to reach wrong conclusion, but auditor should be mellow enough to weight different kinds of audit evidence, and ensure that audit evidence concerns matters of materiality should be derived from own validation.

Some of the unresolved queries from external auditor are in relation to matters management refuse to explicitly express their position, or the matters are latent and developing but not materially affecting current reporting results judging from current available information; the auditor has to rely on management’s representation and release the report at the eleventh hours in order not to sour the relationship with their client (It is unconscionable to prematurely pontificate a scheme is afoot, or assume queries unresolved implied client has fraudulent intent), External auditors always have to work through those controversies and take certain amount of risks. It is not client always dishonest to con auditor but auditors have to be vigilant and exercise sobriety. That leaves the last line of bulwark to the PCAOB audit. But PCAOB auditor too has their own limitations as I mentioned earlier, because PCAOB is auditing the current file of the external auditor. It is in a fix for them to tell without knowing firsthand the ground knowledge of the audit client, the context behind a judgment or whether certain audit approaches are fluff, they can only absolutely certain whether disclosure rules being followed.

The quality process

Not in the least I imply the precariousness is imminent. In a sense, the precarious factors evince some brittle crevice. Thus far, I read about companies whole-heartedly rather than perfunctorily emphasize the importance of ethics (A requirement under SOX) and cultivate open culture, not fudging issues (e.g. facilitate whistle-blowing). Those modus operandi are truly help because it attenuates audit risks and auditor is rest assured that no hanky-panky is going on, it exterminates problems at the source rather than interested parties rely on instituting layers of bulwarks that have their own limitations. I am not writing down the value of layers of protections or giving those layers alibis. They are valuable in the sense that nothing is unassailable. Despite inherent limitations, you just need one protection that is not covered from the same angle to be functional when needed.

Scaling back audit work does not abate PCAOB’s responsibility. The public demands for assurance annually that never assuages. Never before it was required to audit the auditor, No precedence can be followed except by arduous reviewing process. However, there are innovative ways that give better assurance may pique PCAOB’s interest.

It makes no sense to cry over spilt milk when the faulty goods left the shop-floor. A nifty way is getting the assurance from in-house quality check is far more seminal and emblematic of higher quality assurance than checking current files (output of the product), because you are examining the mechanism match quality standards before the production begins. It should not be obfuscated as control freak. The PCAOB auditor gains even more confidence if audit firms pass the test when the resources are stretched (during peak period when many companies have the same year end). SOX authorizes the PCAOB to conduct regular inspections of public accounting firms to assess their degree of compliance with laws, rules, and professional standards regarding audits. Annual personal visit to auditing firm is ineluctable, because new assurance is required due to changes in audit firms, such as turnover of audit staff, bigger clientele because of new joining audit clients, and maze of exogenous factors. PCAOB’s auditor must satisfy the minimum of the followings during the visit:

1. Independence:

· During the past one year, did the audit firm accept engagements/or assignments from audit clients that jeopardized firm’s independence?
· Are client acceptance procedures set as in-house policy being adhered to and vetted by management team to ensure sufficient independence and that the firm has adequate resources and expertise to service the client?
· Does the firm accept appointment that fee received too lucrative compared with their other clients that they are reluctant to drop them when pressure from client’s management mounted threatening auditor’s independence?

2 Deployment of staff:

· Does the firm identify risk category among audit clients?
· Does the firm have sufficient qualified senior audit staff to handle high risk jobs of different size and complexity and with special expertise?
· Do high risk areas always assigned to senior audit staff with sufficient expertise in the industry of audit clients? (Make no mistake; some senior staff like to “delegate” their work to junior staff. The opportunities are gone because junior staff can’t spot glaring anomalies and reviewing junior’s working paper does not tell much more than esoteric validation.)
· How frequent is audit manager reviewing high risk assignment going for field audit? (Some audit manager only interested to review files in the office whereas assurance from evidence received is gathered in the field.)

3 Audit client:

· What is the basis of categorizing audit client into different risk category?
· Does firm assess their capability before accepting new client?
· On high risk clients, how rigorous they plan their audit that left no stone unturned?
· What steps does auditor take to advise client on mitigating their risks? If client is little perverse, candid advice grates on the ears, are auditors prepared to resign from office when persuasion fails?

4 Training:

· Ensure that there is adequate staff training to boost technical competence and firm keeps them up-to-date on major issues.
· Enquire about how training programs (like web-based training) provided are relevant to the job and how firm assesses training performance.
· Enquire audit staff how training improves their audit quality?
· How audit staff can access to in-house technical library? Technical enquiries are available physically and also virtually.
· Emphasize ethical training, the management of audit firm must always communicate message of in-house ethical standards to staff. Strict enforcement of the ethical standards policy is adhered to.

5. Management of audit firm:

· The communication process: How the firm reaches their staff, especially when audit staffs spend most of their time in the field? How important messages are transmitted along the channel?
· Culture: Does the firm promote culture to achieve professional excellence? Is the environment conducive to open communication, learning, professional development and performance management
· Work-life balance: Many auditing firms are overstretched during peak period. Audit staffs toil in the sweat shops are worn to the frazzle. To compensate for assignment budget overblown and to show they are bound up in the work is the unallocated time the auditor slog through, they bring back home uncompleted work or back to office in the week-end. Stretching staff to reach new milestone is good, but over-stretched staffs make more mistakes, create family problems, and endanger personal health. Work smart but doing it right is better than work hard but doing it wrong.

At the pinch, there are many more that can be developed as lodestar and be incorporated into a checklist to facilitate PCAOB auditor carrying out auditing external auditor in-house. And certainly the effects of getting assurance are far better than peer review which is perfunctory in nature between rival firms or enchanted in auditing current files. Of course, auditing current files are not supplanted, because outputs say everything.

The judgment rule

As I mentioned in the preceding paragraph, “unlike the external auditor, they do not have the ground knowledge of the audit client, especially in the circumstances auditor has to make judgment; they simply have to take the external auditor’s judgment prima facie” I am proposing countervailing approaches to improve the quality of auditing judgment.

The first and simple way is to turn the table around, if the PCAOB auditor follows the external auditor to the field. Both muster ground knowledge of the same client; will the PCAOB’s auditor make similar judgment as what the external auditor has done? On the understanding that the PCAOB auditor should only observe, listen, and refrain from interfering into the audit process of the external audit; and only pose questions to external auditor during appropriate time the rationale of their judgments; avoiding interloping, overweening or on the spur vitriolic arguments or skirmish on both side and PCAOB’s auditor should hold rigorous inquests in their own office to make clear their thoughts, and bide their time and segue into having their opinion heard in writing to the external auditor. In case of vast chasms, the exchange will go on, until both sides are palatable. If no consensus is made, then a team of respectable mavens with sound technical expertise should review the judgment and makes their judgment final. It is propitious for PCAOB’s auditor to select high risk clients or clients that external auditor is in dispute on certain controversial judgmental issues to get their selection focus. Physical presence changes perceptions and gives confidence.

The PCAOB will then publish their findings (firm’s name under anonymity) on their web page. This is important because auditor is also watching the ground rules what is permissible under certain circumstances. There is no absolute answer for every judgment, every judgment is circumstantial, therefore making it publicly will help auditor to apply the spirit of the findings in different contexts and chinks in auditor’s armor. It is a valuable learning experience.

No one is omniscient and able to make complex judgment right all the time, so does the external auditor. The quality of judgment is correlated to judgment maker own experience and professional expertise. There are three circumstances that external auditor makes wrong judgment.

An honest mistake: Under present auditing climate, majority of judgmental misnomers are under this category. Unbeknownst to the auditor, it can be faulty assumptions of wrong audit planning; barking up the wrong tree, for example, placing much of their attention in the area mistaken as high risk, based on general assumptions of particular industry rather than tailor to ground situation. Another example is ignoring a lurking threat to defraud the company in which control is least guarded, because auditor gleans insufficient information for ground analysis during planning period. Another true to type example is external auditor accepted management wrong judgment, because they lack the industry knowledge and expertise that management possesses; a very common example is lemming-like believing management overly sanguine sales forecast.

Induced to believe a fabricated factoid by management or company’s staff: The nuance between this case and the over-optimistic sales forecast example above is: in the example above, it is veritable wrong judgment made by the management, and for this case it is a hocus-pocus, management or staff of the company is deliberately inducing the external auditor to believe a fabricated factoid. They know the external auditor is in a cursory to compete with time to close their accounts, comb through a slew of files, struggle to digest surfeit of information, may not have time to dig into sufficient depth if they can fabricate a convincing but arrant apocryphal story or clever repertoire, and they can get away by inducing auditor to make judgment mistake to cover them up to defraud the company. SOX makes it unlawful for any officer or director of a public company any action to fraudulently influence, coerce, manipulate, or mislead an auditor performance of an audit of the company’s financial statements. In other words, it sends a strong message to the management not to fool around with external auditor. However, it does not stop fraudster to take statistical fluke to cover up their misdeeds.

The external auditor is colluded with the management: In common parlance, colluded means conspiracy of two parties to deceive. It is under fraud provision of US code (Chapter 63) to make “attempt” and “conspiracy to commit” offences. Conniving is rather rare now. It is prohibited under professional ethics that auditor has close relationship with the management (not necessary auditors cross over to work for their former clients under conflict of interest provisions of SOX). Thus far, the climate is largely pro-independent. A plethora of financial shenanigans thick and fast easily happen during Enron’s time, and it was how the case resulting the demise of Arthur Andersen. But, the Acts are always there, and there are people display a cavalier to try their luck get away with punishments.

Of the above three situations, it is sometimes subtle to distinguish intention of genuine infraction. Therefore it is a demanding job of the PCAOB to go beyond traditional auditing approach sometimes move to forensics seek proofs to confirm their hypotheses.

The PCAOB auditor can afford to be more luxurious in using their time than external auditor; that give the advantage for them to play around with their cases in different perspectives. To my thinking, group discussion and parallel auditing facilitate the process. Group discussion can draw opinion from diverse background to yield different perspectives especially benefits judging judgment. One will not lock one’s view that can create many other possible scenarios.

Parallel auditing is drawing insights from auditing group of current files from similar industry with similar size. It is interesting to see why different approaches are applied to these companies. There are two ways of applying parallel auditing, one is to download auditor’s current file and makes it portable to be used by PCAOB auditors. So to say, the current file is saved on a DVD, every listed company auditor’s current files are kept, say, for five years in PCAOB’s library (The DVD will be returned for destruction after five years). Five pieces of DVDs do not take up a lot of space, but it reckons on proffering the PCAOB auditor the liberty to compare and contrast the entire external audit process of listed companies in the same industry and of similar size. This knack is almost impossible for external auditor to do the same. PCAOB’s auditor can generate many useful insights that are valuable and in a sense impossible to achieve under current approach. Of course, the major scruple is external auditor may be loathing; in no circumstances do they divulge client’s confidential information that they have no control. PCAOB may have to give written confidentiality guarantee and beefing up internal control for access to DVDs’ use, storage and duplication. At any rate, it is easy to carry out parallel auditing and it makes subsequent changes to the current file impossible. The worst case scenario is external auditor persist in their recourse to confidentiality as their cogent reason.

The PCAOB’s BATNA is: They can still play their last card to conduct parallel auditing by on-line access to external auditor’s file at PCAOB own premises. This is in the purview of SOX that empowers PCAOB, external auditor is still in control of confidential information Parallel auditing breaks away from traditional auditing methods, making new path for watching the watchdog.

Epilogue

I read with interest the news about changes in auditing standard 2. I wanted to concentrate my efforts on job search for my prolong period of unemployment, rather writing articles proposing changes in my profession yielding no feedback. However, I cannot weasel out but stand pat of my original propositions I made several years ago. I have been a staunch advocate for auditing the auditor, risk based auditing, using professional judgments in the audit (Refer to my articles “fixed the systems” written in May 2002 and “Taming the compliance costs.” written last year (both articles can be read from my blog). I foresee the harbinger of some problems ahead. After much contemplation, I write from PCAOB’s perspective this article. I do not provide solutions to the problems, and hope to elicit or brainstorm for better answers.

Note: A copy has been sent to PCAOB

Health care innovation, an Utilitarian perspective ¹

The centre piece of health-care innovation is to provide value to recipient efficiently and effectively. Health-care innovation is in the realms of new drugs and devices; also includes new surgical procedures, new applications of existing technology, information technology, or communications advances. I will not canonically repeat those published practices how these new developments are applied, but full of profundity of how to felicitously cannibalize some best practices that provide value to the intended recipients efficiently and effectively.

In their book “Redefined Heath-Care” Michael Porter and Elizabeth Olmsted Teisberg expounded value as “the health outcome per dollar of cost expended. If all system participants have to compete on value, value will improve dramatically; at the basic level, competition in health care must take place where health care is created. Value in health care is determined in addressing the patient’s particular medical condition over the full cycle of care, from monitoring and prevention to treatment to ongoing disease management.” This definition certainly has little misnomer. It conflates competition, system players and full cycle of medical condition into value.

While cost is certain, value is a combination of perception, emotion and transcendence. It is capricious and lies in different context. The value of health-care provision in developed countries of different income group is narrower, because in developed countries, majority of the people are middle income group, they are more educated, easily access to health information. It is the lower rung of people who are less educated up against little access to health information; depending on public service, tincture of poorer healthcare that I think where we can dramatically improve value, because the gap is wider.

Another area where we can bring colossal value is in the developing countries. The value of health-care provision of different income group is far wider in developing countries. Wealthy people in developing countries can seek better health-care services in more developed countries in the region. Majority living in poverty are less educated, have little access to health information, have to endure poor quality of public health service.

My article based on utilitarian view is not hedonism, rather consequentialism, is to maximize the utility of health-care management of these two groups of people through innovation.

The governance of health-care services in developed countries

What is the role of the government in health-care services in developed countries? The broad objective is to provide quality health services to the citizen as a whole. It encompasses health information dissemination, adequate competition in private sector, and most of all, to improve effectiveness and efficiency of public health service.

As much of the complaints thick and fast centre on rising health-care costs, besides price increases according to general price index, what actually make the health-care costs escalating? At a cursory level, I gleaned from several health-care providers financial statements to look into the cost structure of this industry. I scrutinize the financial statements of both the well-run private health-care providers and also some public hospitals .As things are, the largest proportion of the costs are staff costs. It goes without saying, health-care is a service sector, and the manpower requirements are higher. This shows that there are plenty of rooms for process improvements. Process improvements are not to lemming like culling headcounts, the gist is to balance between maximizing value and minimizing resources. Process improvements are not all about retrenchment. Retrenchment is palliative on costs not on value. Process improvements are about rational deployment of workforce that provides greatest value. Thus far, the government is the largest employer, it is easy to redeploy redundant staff and provide necessary training for new position. I was inflicted by organization restructuring for many years, and now still no offer coming my way. Certainly, government must set good example at any rate as the most admired employer to make yucky restructuring less blight and pernicious.

As yet the second largest costs are fixed assets and supplies. Properties of public hospital cost rise is malleable to upgrading and refurbishment, coupled with purchasing of new cardiology, orthopedics (demand for hip, knee, and shoulder replacements), diagnostic and therapeutic equipment, and higher price new drugs precipitate costs ballooning, the government in order to seek breakeven and maintain profit margin, resort to large step price hike. The urge for intransigent medical professionals to get latest new equipment is strong and oblivious to the financial support level of the patients and how to achieve balance between better, more effective diagnostic and therapeutic equipment for better healthcare and sustainable financial support level. The key to prevent sharp price upsurge is to have long term capital budget plan to make price hike gradual for replacements and upgrading. Secondly, an independent capital asset review committee set up to review large equipment purchases, gingerly analyze costs and benefits rather than promiscuous purchases. It is certainly frail vanity just to showcase possessing state-of-the-art service equipment, if the usage is low. Unless it is nifty for strategic purpose, then the request must have concrete plan for how to enlarge its existing usage to even up the costs.

What happen if every proposal claims their purchase is strategic but not a vestige of truth? A veritable strategic purchase radically increases clinical values that benefit substantially to the patient, or it helps to reduce the patient’s costs tremendously. If the evaluation also takes into consideration the authenticity of past proposals, the proposer will be gravitated to conservatism in their forecast and prediction.

What happen in order to increase equipment usage rapacious doctor foists unnecessary process what Michael Porter and Elizabeth Olmsted Teisberg mentioned in their book –-overtreatment. In practice, overtreatment sometimes is unobtrusive and difficult to discern, because of the subjectivity elements in the process concern. The crux to deter overtreatment is information flow, the patient can get information of therapeutic and treatment process, say from the web or other means; Second, is a mechanism to report complaints for investigation and make restitution as comeuppance for infraction. Doctor is motivated to be transparent, elucidate to patient the rationale of the therapeutic process and fee charge before treatment in order to save the pain of unnecessary litigation costs and time wasted impinges on them.

The existing costing system is also to blame for averaging out total costs and reflecting it in the price surge. It is certainly warped, unfair to those who do not receive the benefits but bear the blunt of someone else’s burden, willy-nilly. If the worst comes to worst, the fairer solution is for the government to allocate a bigger budget under fixed asset acquisition reserve, let all taxpayers pay for it. No one is ostracized by dint of effective equipment.

Supplies are another big chunk of costs. Some countries in their financial accounting lump medical and surgical supplies, drugs and operation supplies together, certainly, the accounts are obfuscate and not informative, there are no segregation of large cost items; A better costing system is presented according to activity-based, efforts to trim non-value added activities occurred in the operation will be highlighted. It is common place that public health-care providers to cut drug supply costs, source from the cheapest suppliers, and perversely use cheap medicine for clinical purpose. That is a waste of resources if the prescription vitiates its intended effects. Value and costs are symbiotic. A flexible approach will be: if the subsidies for expensive medicine are long term for patient who are up the creek due to abysmal financial condition (according to standard guideline measure), the health-care administrator will make known to the patient the long term effect of subsidies, then request, but not dickering, the patient’s family member voluntarily perform some public services at convenience time in lieu to repay tax-payer’s funds.

Another good example of imbalance in cost and value occurs in public outpatient service. Thus far, all outpatient doctors are general practitioner. To avert these general practitioners become Jacks of all trades conundrum, and cutting through tangles and knots of being dilettantish, be all and know all, they should cum specialize in one or two common diseases, such as renopathy, gastrology, cyesiology, celialgia etc. In their specialized fields, they are connected through web-cam joint consultation to the specialist centre in the particular field or patient referral. Now that the care-giver shortens the process by getting it right the first time, the right therapeutic and treatment process are on the card, enhancing value to the patient.

A good IT strategy is a sine quo non to unleash great value. Each patient will have their “identity address” represented as a folder in the server’s data-base. The health care management software will incorporate each doctor specialized field and assist to allocate patient to the right doctor. Another way of allocation is evidence-based on objectively evaluated and accredited clinical results stored in the system. Patients will self-help at entry point with the aid of the software Experienced duty doctor and nurses are pivotal to guide patient needing help for allocation of doctor and determine the urgency of the case at entry point, unalloyed emphasis on risk assessing vicariously at this point to determine acute care (quelling acute pain etc) needs immediate attention, transfer to specialist care or remain in the queue for normal routine therapy and treatment. This is the crunch point of critical decision making process immediately resonates the quality of the delivery. Few public hospitals or clinics manage this critical process well. Improving this process, you can eliminate altogether the process of registration section and long queue time. If you do it right the first time, certainly patient get the value by recovering faster, attenuate wastage of drug, administration and other resources. You achieve the efficiency and effectiveness.

Patient’s rights to choose doctor also drive doctor to deliver their best value. It is said the trend now is move towards consumer based. Michael Porter and Elizabeth Olmsted Teisberg thought that consumer focus is a cornerstone move to value-based competition. They are reticent about the consumer’s ability to make their own decision due to restricted information available and lack of expertise in the field.

In public outpatient service, there should be a cap for maximum number of patient to be consulted to extricate doctor’s fatigue. You can’t deliver value without spending adequate time to look into the details of the symptoms rather than through “cavalier and quick intuition”. Worst, “cavalier and quick intuition” becomes habitual. The present system favors “quick delivery of every patient”. This phenomenon is similar to Michael Porter and Elizabeth Olmsted Teisberg so-called under-treatment. Undertreatment is prevalent in public outpatient service due to overwhelming in demand for consultation. Doctor is human. There is no incentive but stress for doctor to take longer time enquiring the details of patient’s symptoms if the queue is long and consultation time is fixed. A special bonus or other rewards will be awarded to outstanding doctors accordingly after reviewing and evaluating objectively evidence-based clinical records and accredited clinical results. The process segues inputting into the system. This is part and parcel of performance management.

To reify this process, health-care management software can come to rescue. The software will monitor the consulting process of each doctor, the remaining time left and number of patient still in the queue. This process improvement helps to assuage long queue time in registration and consultation, because the software will help to route patients based on queuing theory. It is a worthwhile long term investment. Sad to say, the present ERP clinical system does not develop program to improve this critical process.

Outsourcing is now not only prevailing in private hospital, but also in public hospital. Some health-care providers classify outsourcing services in the name of purchased and contracted services under operating expenses. It is a direct cost and should be cost of service provided; so be the drug supplies and equipment expensed off, depreciation and direct service staff expenses. A direct cost format provides information about contribution margin movement for service provided. A differentiation between direct and indirect costs highlights the economics of service provided. My personal encounters for contracted services were pleasant experiences. The value of outsourcing service goes up tremendously, so did the costs. It shrugged off the image of only newly qualified doctors are the mainstay of public hospital. Many private practitioners, especially the specialists are willing to be engaged in contracted public health services to stabilize precarious income stream. Therefore, it is propitious to draw up an agreement to the advantage of the public hospital plus performance bonus as incentive. As this is a long term planning, an outsourcing service committee will review service contract, costs, performance and rewards. Just like Michael Porter and Elizabeth Olmsted Teisberg mentioned in their book it is the chain efficiency and competition will unlock outsourcing value.

I see a steep upward rise of healthcare costs in ten to twenty years time, not only Baby Boomers in the US, but also other parts of the world where aging population drastically increase due to decline fertility. A plethora of problems will arise due to retirees do not save enough; or unmarried, separated, divorced; instead of having maid or an adult child to help in case of illness, a sick person may turn to hospital or nursing home. The demand for low cost public service will rise sharply. When we reach that stage, a steep cost rise will happen, because many countries aware of it, but no concrete action plans to smooth the learning curve. If we start geriatrics earlier, getting infrastructure ready, cooling the demand of new drugs for common old age illnesses, develop generic drugs, educating about gerocomy (It is low cost and will strengthen prevention care), building a pool of healthcare specialist and personnel, building specialized public hospital for aging population. Every step we take now will reduce costs in the future.

Some countries have medical insurance scheme to alleviate part of the burden of the patient during contingency. The idea is good, but the bulk of the problem is its iniquitous; large numbers of healthy people are subsidizing small number patients’ financial needs. To fine tune the system, is to assess the risk of claim. It should operate like motor insurance system where reported accident rate determines higher premium payable; In other words, healthy people will pay reduced premium, and only hospitalized patient in the high risk will pay higher premium. To stay healthy becomes an incentive for individual to keep their premium low. Another concern is the threshold for insurance claim, if setting too high only fatten the agents, because the pay out is not in proportion with the premium received by the agents just to consider the number of people subscribe for medical insurance.

For practical purposes, instead of hallowing Michael Porter and Elizabeth Olmsted Teisberg “medical condition” ², which is multifariously intractable and atypical, vacillating between long commonly understanding of Medical Glossary, let get back to the basics of using the standard and universal terminology, like hysteritis, bronchitis, and rhinitis rather than anything else. Standardization will help software developer and also users.

There are pros and cons to have a health-care provider to manage the full cycle of care, the present system adequately handles curing process in a discrete cycle, it gives the patient choices and flexibility to change course if they find treatment is not to their satisfaction. What I see as imminent problem is the incongruity in the process of treatment that prolongs delivering results and intensifies the patient’s suffering. That is truly value destroying. Supposing a patient has to go through the process of registration, consulting doctor, and is instructed to have lab test to aid diagnosis, and back to doctor again for treatment. What make things worse is the lab not under the same roof, the patient has to move to test centre at another location. It is sickening if the patients awaiting for lab test is in a long queue and at last the lab test done, but waiting for lab technician to process the sample and deliver result, sometime the lab technician may not be able to deliver the outcome on the same day, and finally the result reaches the doctor, but the doctor may not be there on the same day to finalize her treatment. The process of sheer purgatory is ineffable, not only to the anguished patient, also the family member accompanying the patient. An integrated system will help to send report or image to the patient’s personal folder and forwarded to the doctor, the bulk of the problem is apposite operation improvements.

Many of the problems mentioned in Michael Porter and Elizabeth Olmsted Teisberg’s book are the result of concomitant self-interest take precedence's health care system, rather ascribed to the dereliction of health plan.

I am demurred at the idea of public health-care service is to profit seeking. Not only physicians in public sector, so do many private practitioners not seeing maximizing personal wealth as their goal. They want to live a decent living but morally. That is why we read news about some volunteered cosmetic surgeons spent their free time performing Cleft and Craniofacial surgery free of charge for children in developing countries. In particular, these surgeries are worth thousands of dollars for each operation.

The government needs not to duplicate or crowd out the private practices but assiduously ensure competition rules for those who can afford for choices and helps to provide reasonable care for those who can’t afford a better choice ensnare in public health-care system. If the government pegs the percentage increase in health-care costs with the rises of lowest echelon wages and subsidizes the difference, that way, will motivate the public service providers to improve internal efficiency.

The Governance of healthcare service in developing countries

This is an interesting ethical story ³ of biologist Garrett Hardin’s lifeboat example whether a responsible captain should risk the lives under his command to rescue a capsized boat. The implication is what the book says “to what extent should individual risk their own well-being for the well-being of others?” It extends the meaning to rich countries do not have any obligations to poor countries, as they endanger the well-being of their own populations were they to admit the world’s poor in the rich world’s “lifeboat”. If the world’s wealth was shared out equally, it might only mean that everyone had too little. The book said Hardin argues that “altruism can only apply on a small scale. Population is the root cause of both hunger and poverty.”

A sigh of relief, not everyone in rich countries is impervious to extend their help to the poor. World Health Organization (WHO) is one of the non-believers. WHO has spent much of its financial resources helping developing countries in Africa and Southeast Asia. In their broad mid-term strategic plan, it stressed its result based management to achieve myriad objectives. Notwithstanding, there are plenty of scope to trim headquarter administration costs.

As I mentioned in my introduction paragraph, the value to improve healthcare rise sharply in developing countries due to bigger income gap. To ameliorate developing countries such as African countries health care problem is first to resolve economic progress. To get rich quick, African countries are to be in control of critical natural resources that are low costs and high yields.

Besides, is to institute good governance. Good governance manages the controllable and takes measurable steps to control contingency. It ensures sound economic policy implemented, improves employment and household income. In Africa, good governance also overcomes other incapacitating factors such as resisting being browbeaten by and at the behest of the negative external political influence; has big picture in mind and willing to be more conciliatory to stop belligerent in tribes and factional long standing feuds, beefing up education level, fighting corruption,control and retain the flow of talents seeking for greener pasture in the richer countries; these factors are interrelated; by then, exalted living conditions certainly improve health care quality.

To alleviate the resources burden in developing countries, first and foremost, is to establish a workable healthcare model, a model which is commensurate with their economic developments. WHO can assist African countries to establish a regional medical share services centre to buttress economic use of expensive resources. This regional share services centre will be equipped with better diagnostic equipment and a pool of qualified health professionals; It also play a role of promoting sharing of health-related knowledge among the countries, and provide health-care training and public health education to locals.

WHO cannot depend on volunteers to resolve long term issues. The crux to resolving personnel shortage is to train and mobilize a large contingent of local health care workers. Their job is to cater the basic needs of health care and preaching health information. In Africa continent, many are illiterate, afflicted common diseases, such as HIV/AIDS, Hygiene, Hepatitis, Malaria, these can be early prevented by health education therefore health information dissemination is of paramount importance. Their training is practical, central around targeted common communicable and non communicable diseases. Their knowledge level is in between nurses and doctors

Shrug off the bigoted belief that complementary alternative medicine can only heal but not treating person. There are many low cost complementary alternative medicines provide equally efficacious intervention and have scientific basis; even for life threatening deceases like HIV/AIDS. WHO should source and research the clinical results of these low cost alternative treatments and integrate these economic but equally efficacious complementary alternative treatments with western treatments in training the local. These trained local health professionals mesh with the share service regional centre for technical assistance via web-cam meeting or joint consultation. WHO can also engage low cost producer to manufacture generic drugs and drugs commonly in use in developing countries.

I notice a country who implemented this system during nascent stage of economy with certain degree of success. Once this model achieves success in one region, the same model can be improvised to implement in other developing regions. This method dovetails WHO result based management, because it tailors to local economic evolvement, extending the help to the largest part of the population, alleviate financial burden of WHO.


Notes:
I was inspired by the resounding work of Michael E. Porter and Elizabeth Olmsted Teisberg. Both have written a book “Redefined Health care- Creating value based competition on results”. While I am reticent about some of the ideas enunciated in the book which I will mention in this article; there are also percipient opinions deserve attention. My article also does not intend to address problems in the US, as they are adopting unique health-care plan system which is not adopted in many developed countries. According to “The Economist” (Jan 2006), in US, a large chunk of health care is paid for by tax-subsidized employer-based insurance. It also praises America’s system has some clear strengths. Consumers get plenty of choice, and innovation is impressive. It said “the American system has big problem, notably inadequate coverage, spotty quality and high cost.” I address the health-care issue for developed and developing countries as a whole adopting utilitarian view.

2. In their book (page 5), they reason the use of term medical condition rather than disease, organ system, illness, or injury because it will prove to be more closely tied to patient value.

3. Lifeboat example is extracted from the book “101 ethical dilemma” By Martin Cohen

The upgrading paradoxes

I wish to ferret out the truth matter-of-factly and welcome any feedbacks and comments.

Synopsis

In the May 2006 General Election, in order to win back opposition wards the ruling party’s ballyhoo was a promise to throw out hundred millions dollars to upgrade the public-housing in the wards to impinge on the constituents to vote them. The upgrading projects include face-lift, improved amenities and lifts to stop on each floor. The oppositions were ostracized for not having the wherewithal to fund the projects. They clamored vehemently the ruling party’s repugnant “hanging carrots” strategy by tying upgrading with election to vitiate their chance, claiming the ruling party using tax payers’ money to achieve political advantage and upbraided the ruling party that their constituents also paying tax why resorted to discriminate people in Singapore between opposition and ruling party camps. In the election, the unrapacious two opposition wards’ constituents were disenchanted by the blandishments. They foiled the “carrot” plot and annexation by the ruling party. It panned out that of the entire voting constituents, 66.6% chose the ruling party. After the election, the PM hailed to close ranks that got rave review.

Soon after, the minister in charge of upgrading housing projects pronounced the ruling party wards will be ahead of opposition wards on upgrading, and regardless of party concern, all public-housing upgrading projects in Singapore will be completed in 2015. This aroused the oppositions and concerned Singaporeans writing to the paper, leery of the capricious government on the one hand, hailing close ranks, and the other harboring divisive inclination.

In his reply, the minister claimed the government in deed had taken care of basic needs, and upgrading was something premium to these needs, and funded out of Budget surpluses generated by the ruling party. He insisted to fulfill the promise of those voted for the ruling party, and with the HDB-priority policy, Singaporeans’ votes would make a difference to their own lives in the HDB estates. “Only then can our system of democracy work. Only then can we stay together, and move ahead.”(The Straits Times/Forum 17 June 2006).

Paradox 1 -the benefits of upgrading

The benefits of upgrading are always inordinately overblown. There is no qualm about an upgraded estate valued more than those not upgraded. There are two kinds of benefit associated with external upgrading. First, it is the ambience benefit, gardening of the surrounding morphing a soothing realm; exercise ground for residents to upkeep their health; Children playground to exhaust the ebullient kids; Shelter to provide cover for rain and sunshine. The second benefit is pecuniary, making a windfall in a reselling market or upgrade to private property.

Let examine first the second benefit. Unless you are deft at investment like one of my friends held two properties and made a fortune and now lives in semi-detached house. The up in value probably concern you little if you have to live in it and you cannot afford to upgrade to more prestigious. My friend’s fortune was also on condition that he purchased in the very early day when public-housing was heavily subsidized. And now most public-housing are pegged to the market value. The latter incumbents gain measly little in price differential when pondering to upgrade. Secondly, in the boom day of late nineties, dint of upgrading as “carrot” to attract legion of followers is propitious. But now the residential and shop house of HDB property supplies are in excess, the so-called advantage is rather creaky.

As to the external ambience benefit, the time and frequency you spend in it is in tandem with the benefit you received. I am doubtful working adults grade this as primary benefit. Building the shelter in the estate is good; the big fluff is the design does not offer egress hitching to the external network such as to the bus stop. It is fudge. You get the aesthetics but not practicality.

For lift to stop on every floor is a double-edged sword, it gives the convenience especially to old folks and handicapped; however, unlike commercial buildings cater many lifts for passenger use, the building owners can afford to weave the lifts into a complex system incorporating intelligent functions to achieve spontaneous, flexible and optimal sense and response.

At present, the intractable problem is we do not have such smart lift in public-housing; you find it is a gnawing and frustrating experience early in the morning if you are living at 20 floor. When you are going for work; perversely, everyone is rushing for work at the same time, the lift stops at every floor. The lift door opens and closes at every floor until you reach first floor. This frustrating experience dampens your mood when you reach office. I hope this is an extreme case. My own experience of the tardy response is when I press button outside at 12 floor; the lift at nine floor cannot choose to pick me up at the most adjacent landing floor because the stupid lift responded first to the insider calling.

We had our upgrading a year ago, surprisingly; the lifts were not changed to stop on every floor. Do we have to pay again for the second upgrading because lift to stop at every floor was oblivious a year ago? It is enigma of pivotal project likes this, the accounts of upgrading projects were not elucidated to the public whether the balance is in excess or deficit; presumably the Audit General has taken care of this job. Transparency minimizes surprise when something untoward sporadically crop up.

The upgrading of wet market is another botch up, the wet market in our precinct; old market was demolished to make way for the new one. The lethal blow was many stallholders of the old market could not continue their businesses, because the rental for the new market was too high to make a living. It is satire even those who eked out with their businesses, have stopped now. The whole new market has closed down now for a month for unknown reason. Probably cannot afford the rental hike. No wonder when I read the election news, the hawkers in the opposition ward did not want to upgrade, they knew the conundrum well that upgrading meant rental hike. Their small business margin will be completely wiped out for the sharp rise of rental. The morass is it is difficult to pass the hike to consumer, because residents may go to other near-by wet markets.

Paradox 2- Budget surplus

It is an old adage in any organization, “Spend your entire budget surplus or to your disadvantage”. In the traditional budgeting system, someone with sanity likes to build slacks into the budgeting system. First, it has to get through the first cut from the Comptroller. Second, why makes own life difficult? It is not your own money, who care? I learnt these pitfalls twenty years ago when I studied management Accounting. The improved budgeting system many leading MNCs are using now is also palliative, not a panacea.

Public sector budgeting system is large in size, and operating in the same theory and malleable to the same behavioral problem. But I am quite perplexed as to who own the surplus? In the private sector, anything not spent will become shareholder equity. There is little nuance to the meaning of this residue for public sector.

The controversies arose from the evolvement of the ideology of the ruling party. Way back decades ago, if you are not oblivious, after the second generation political leader took over office, the first generation political leader did not want his successor to splurge the huge surpluses he accumulated. Understandably, he erected a framework to restrict the use of the reserves. The second generation political leader vowed not to use it and only spent the surpluses out of his tenure. These surpluses became annual give-away for the past few years when the economy was in the doldrums. And his successor the third generation leader even generous handed out progress-package of more than two billion dollars before the election. The opposition derided the so-called progress package tantamount to obsequious, pandering to the voters. The ruling party denied profusely. Few Singaporeans really rejected this quick money. The answer to who own these surpluses is if it is owned by the people of Singapore, the progress package can be construed as special dividends return to the shareholders in private sector’s sense? The real substance is the redistribution of wealth.

The big question now is the minister claimed that the surplus is “earned” by the ruling party and they have the final say how to spend it. The claim is the continued evolvement of the ideology of surpluses accumulated under whose own bat; and a step further ensnared in the web of party origin. I am not quite convinced by the frailty logic. The government pegs the ministerial pay akin to private sector; certainly we want to benchmark against the private sector. Can management tell shareholders that they have “earned” a budget surplus; therefore they have the final say what to use of the fund? I have not heard of any cases like that.

To avoid management derelict of duty, secretly spend away the surplus and motivate management to achieve greater efficiency, a best practice company is willing to share this surplus with the management in terms of higher compensation. The shareholder probably says, “I compensate you adequately. Thanks for managing the budget for me. You cannot shirk your responsibilities to pare down the expenditures.” By any of the peer standard in the world, our ministerial pay is among the top five, can I suffice to say the cabinet is adequately compensated and it is their duty rather basking in bargaining or negotiating of the residual money they saved. Besides rewarding, other reliable tools include mimicking the private sector’s resounding corporate governance practice appeal to individual integrity, professional ethics and checks and balances.

I appreciate government adopting efficiency measures, such as share services. I think most governments in developed countries are doing the same--adopting best practices in public services. Among the most successful public services are the e-services, achieving good ranking in the world.

Nowadays, to achieve budget surplus, is much easier than before. In the early days (In the sixties and seventies), our economy pie was small, the first generation political leaders ran many heavily subsidized basic need services to the public; such as HDB flats, medical services. All these ate into government budgets. Much older generation Singaporeans scrimp and save from rags to riches are stoical, enamored to show their gratitude to the first generation political leaders. The bond ties with their hardship.

And now Singaporean is more affluent than in the old days. Mindsets have changed. Though the corporate tax and personal income tax rate have reduced, the broader based GST which based on consumption largely compensated for the shortfall. The goal of the government mutates into running the country like a large corporation. Price the services and goods to the market; such as pegging the housing price with the private estates; reduced subsidies for medical services. Lop off community services to the public; All things being equal, if the economy pies grow, so do the budget surpluses.

The party’s right to the surpluses is rather mendacity. If it is true, the president of the United States Mr George W. Bush is basking in Mr Bill Clinton favour-- the budget surplus he leftover, or in a strictest sense, the Republican in the US owes the Democrat the budget surplus Mr Bill Clinton Government left behind. Bush government is overweening, does not know to accumulate surplus in good times. He proposed permanent tax cut coupled with the ballooning expenses of the Iraq war now hit a snag with no end in sight; certainly the budget deficit will snowball. When the business cycle turn the corner, i.e. passes its peak, the systemic risks will be looming large. Current account deficit is pertaining to trading and investment. Although it is unhealthy is still sustainable in the short run, because there are factors underpinning the deficit which cannot change in a short time frame. Budget deficit is contagious, breaching the bulwark of every element in the economy and precipitating the business cycle. The only help in current account deficit to budget deficit is government bonds which stave off the needs to printing monies. It is even propitious but not without risk if the bond holding parties are foreign governments. When the US sneezes, the world catches cold. Back to the discourse, I am leery of the assertion that any country in the world claims party’s rights to budget surplus.

Paradox 3-the “premium” theory

It is again a very controversial topic as there is no precedent; or it must be a doubtful provenance that government divides their services into basic need services and premium services. “Everyone will get basic need services and only those voted for the ruling party will get premium services, and that is called “democracy” . My God! It is a hidebound view. The underlying assumption of this warped judgment is no one else knows except me how to provide these services and therefore are proprietary rather than the fact of who is controlling the distribution of the resources and have the final say. The worst scenario I think is bad for Singapore is a aggrandizing, impervious to criticisms, brash, intransigent ruling party (too strong and complacent), too weak the opposition party and too dependent the Singaporean. The so called premium is brittle. Many best practices we borrowed from other countries we diligently do it to consummate is a cinch, is imitable. This kind of value creation is not sustainable in long term. So, the so-called upgrading as premium services only befogged me.

Paradox 4--statistics puzzle

The statistical puzzle is about the eligible voter voted for ruling party was 66.6%. I might be wrong I scored a C grade only for Business statistics 25 years ago. Of the 56.48% voting constituents in Singapore 66.6% voted for ruling party. It means 56.48% multiples by 66.6%. I get only about 37.28% of the voting population voted yes to ruling party. The rest of the 43.52% walk-over population is unknown statistically their voting inclination. I think it is seriously inaccurate to take a portion of the voting population as a national whole. My wild conjecture for the national wide voter supporting the ruling party is in the range of 55% to 70%. It is apposite to say that if not some unpopular and repellent events cropped up damaging the public image of the ruling party, probably the percentage of the supporters to the ruling party would be higher. Percentage wise is a representation, the pliable people’s moods could have a wild swing in the last minute even most received the progress package. Tough talk and aggressiveness could be construed as assertive, do it at the right time, right place, for the right reason and saying it rightly could yield tremendous results. Certainly the election results reflected otherwise.

Paradox 5- the talents search

My constituency was a walk-over, if I have a choice to vote, I am not sure I will vote for the ruling party? What truly concern me most is to back to the work force. I still can’t find a job after the economy recovered. Only know how to write this freebie benefit those earning million dollars “act blur parties”. The author evinces imbecile, isn’t it?

Our estate has upgraded, but it doesn’t change my life very much, because it is external uplift. I continue to burnish and upgrade myself to the minute to provide prospective employers bonus service. If I can think better, why there is none really appreciating my talent? Our society cannot move forward, because everyone is craving only to draw the same round pie, not any bigger (more value-added). Taking upgrading as an issue reflect this deterministic mindset. They look for what have been done, decided before and taking people who can draw even rounder pie.

I read “Forced Ranking” (published by Harvard Business School Press) with interest. The author advocates talent management using force ranking, categorizing talents in the organization into A, B and C. For those with the C grade, it is either buck up or get out. It seems ruthless. The inner competition in the organization is very keen, everyone stretches to their utmost to achieve good grade probably matches American individualistic society. And I think it too, will improve organization performance .But the crucial part of it is the yardsticks to categorize people reflecting deterministic or dynamic, forward looking component that decide the real success of the organization.