tv [untitled] April 2, 2012 9:00am-9:30am EDT
mexico. >> the exchange stabilization fund. >> i used to run the exchange stabilization fund. i never thought it had that kind of money. somehow they developed it out of thin air. and in a sense it was successful. mexico had a good recovery but there's a lot of political criticism of the amount of money involved and why do we have to get so deeply involved. a little while later the asian crisis comes along. the first reaction of the united states government was to stay away. they said this is an asian problem. we don't want to get involved in every crisis, every place in the world. so thailand's a small country and that's all right and we don't need to jump in. then it went to indonesia. imf got involved.
didn't like the japanese getting involved because it's our business to get involved. then it got pretty bad. korea got in trouble. oh, that was going too far. we jumped in and helped marshall the banks together and help korea and ameliorate the crisis. but in deed that was a good example of a relatively small country getting in trouble but that country getting in trouble, very sharp fluctuation in the exchange rate, its neighbors got in trouble. it happened in thailand, why can't it happen in indonesia? finally what happened to korea.
tend of the day it was felt necessary, quite correctly, to say the united states better become more active in this deal and move to stabilize the situation. you can say, well, so what, so suppose korea at worst went into default. so what? if korea went into default, what other countries would? >> i'm going to take these two questions very quickly in line. we're going to move immediately to the next session. >> can you tell you all about what happened in the asian crisis. >> two quick questions. >> there's been a lot of
quantitative easing. >> you're talking about the federal reserve? >> yes. >> you said something to the effect that any financial innovation after -- doesn't do too much to falter economic growth. what role in your perspective does financial innovation and financial engineering contribute to the widening income gap in this country in frequent -- >> let me -- we haven't got time. we're not going to solve the income gap in this country and solve our budgetary problems by financial innovation. financial innovation cannot rea.
it's not going to reduce consumptions or reduce savings. forget about financial innovation. if there's anything we've had enough of, it's financial innovation. on the question about the federal reserve, the federal reserve has done things that were unimaginable a few years ago, much bigger balance sheet, all sorts of unorthodox things. but they do not in my judgment present what would i call a technical problem. as the economy grows, they've got the capacity to reverse in an orderly way would what would be excesses of money creation and so for. the problem will be the ever
lasting problem of central bankers. do you begin tightening up soon enough when the economy is launching itself on an expansion? it's always unpopular. whoever wants to tighten up at all when unemployment is still whatever it is. because you t could always get better. so leave it alone. and you'll begin taking tightening moves, however mildly, they're likely not to be wi wildly welcomed in the political environment. but that's what central banks have to do. so i think it's a central bank policy problem, it's not a technical problem. >> i don't see bob reuben up here. until they're here, i'm not going to go off the stage. i know in my digging around in your work, you are deeply concerned about the state of public administration, those
that are tasked with stewardship responsibilities in the government and in the next robust phase of your life you have committed yourself to doing something about it and trying to change the quality and support for those people serving in government. i'd like to share with you or have you share with the audience what you're doing on that front. >> this is a long time concern of mine as to how to improve public management and public administration. i think part, only part of the ideological problems we have on both sides, government is terrible, causes all the problems or government rescues everything, neither is true, we need efficient government that can be widely supported and trusted. if that's what we need, the government seems reasonably efficient and effective and widely trusted, that is not what we have. you know, there's a great survey
that's taken every year, a lot of these things ask the same question every year literally for decades. and one of these questions is do you trust your government to do the right thing most of the time? that doesn't seem like, you know, the most strict test you could imagine in a democracy. do you trust your government to do the right thing most of the time? recently the answer to that question is about 20% and i think the most recent survey i see shows below 20%. you're not going to have, in my opinion, a very healthy democracy if 80% of the people don't trust the government to do the right thing most of the time. a certain degree of skepticism is a good idea. we ought to be skeptical about politicians and bureaucrats. we can't be so skeptical you
don't think the government can't do anything right, be suspicious of everything they do. i don't think the government is incompetent but i think there are areas where it hasn't been competent and has not done a good job and we have to concentrate on those areas and do a better job and restore trust in government. let me give you two obvious examples on recent events. harry king. we spent a lot of money on the offers of emergency management. it was considered a total flop in responding to a hurricane that had been predicted. and with good reason i think. then a few years later we have this oil spill in the gulf of mexico. i didn't even know we had an agency which its purpose is to protect the safety and reliability of offshore drilling. but we have such an agency.
and it obviously hasn't been doing the job. these are two very technical problems. nobody's going to argue that it makes sense to protect against oil spills. you need a little guardianship. nobody's going to argue that we don't need a capacity for emergency assistance. can't we do that kind of function more reliably than we have been? so that's what this is all about. i want to give a little more attention to this kind of problem and i'm getting old so i haven't got more time to do it. >> i appreciate your time. chairman volcker, we invited you to talk about things we wanted but when your institute is up, i want you to speak about things you want to speak about.
c-span's 2012 local content vehicles city tour takes our book tv and american history tv programming on the road the first weekend of each month. this past weekend featured little rock, arkansas. with book tv at the high school collection at the university of arkansas. >> he was particularly interested in the 19th century, the civil war in particular. these are two friends, union and confederate, who knew each other prior to the civil war, who fought against each other at the battle of pea ridge in 1862, survived the war, came out alive and remained friends after the war and here they are age 100, sitting on the porch talking about the old days. >> a lady here wrote a beautiful book called "the art of gaman"
and that meant surviving the unsurvivable sort of. she talks a lot about how the arts and crafts were sort of hough they kept their sanity and it gave them their sanity and how about the depression was so bad in the camps and there was a high incidence of suicide and people would make these little things of beauty to give to each other just as a way to say we support you and care about you. >> our tour continues the weekend of may 5th and 6th from oklahoma city on c-span2 and 3. recently the national u.s. arab chamber of commerce organized a forum bringing together u.s. ambassadors to arab countries. in this portion the focus is the economies of saudi arabia, qatar and kuwait. it's just under an hour.
>> i would like to reconvene our forum at this time. as you know, we are still on our tight schedule with one hour remaining on our second panel. the same procedures would pertain to questions from the floor so please begin sending them up as the panelists give their opening remarks. >> moderating our second panel is the honorable allen larsen whose biography you have in the event booklet. i'm sure all of you in the room and certainly we at the national u.s.-arab chamber remember his days in economics and his many years in the aba bureau where he was a champion for u.s. trade and international fair treatment for u.s. companies. so it's a particular pleasure to call on ambassador larson to moderate this panel. >> thank you very much, good afternoon everyone. we're looking forward very much to this panel. we're going to be considering a set of challenges that perhaps
paradoxically are just as difficult and daunting in many ways as those of the economies in transition which we just heard discussed in the previous panel. experience around the world has shown sadly that ample endowments of natural resources which should be a blessing for national economic development can, on occasion, be a curse. nations that are rich in natural resources need to figure out ways how to translate that potential wealth under the ground into enduring forms of wealth above ground that can create high and rising standards of living. doing this, experience has shown, requires serious effort to avoid the temptations of overconsumption, the temptations of poor investments in white elephant projects and sometimes
as plain corruption. more affirmatively, making this transition from hydrocarbons to a broader and more diversified economy requires an effort to make sensible, thoughtful investments in infrastructure in education and in the creation of an entrepreneurial culture and in the establishment of a sound regulatory environment for business. i think this should be an interesting set of discussions, and i think what we would like to do is begin as we did last time with the far end of the panel with remarks by ambassador corbin. >> thank you very much. my name is michael corbin. i've been in the uae almost seven months and business has been my top priority. what i would like to do is start this panel by saying that the uae is very much open for business. i would like to say that this is
for two reasons. one, the uae has benefited to a certain extent from the problems in the other arab countries as people are moving there, as businesses are moving there, as tourism is going there, but i would also argue that it's because the uae has positioned itself as a transit hub with the two major airlines, with dubai's ports and airports and abu dhabi coming online, the new sub-saharan african market is developing the market and the stands are developing, but i would like to focus on the subject of this panel while the traditional areas of business, aviation, defense infrastructure are moving ahead in uae, was there a pause, but now they are moving ahead and they are continuing in those years. the world future energy summit earlier this year provides an opportunity for u.s. companies to enter into a country where there is planning for the future, and what i see is the
uae is a place where we can do real competition with the indians, the chinese and the turks in areas such as alternative energy and i would also point out health care. i also point out education, the u.s. brand is still very popular. what we're facing is times 30% of the cost of our products and services when you look at india, china, turkey and other competitors. and what i see in the united states countries who are willing to go to the united arab emirates are pursuing the potential with its young dynamic leadership for the region. as i said last year there was a slowdown in projects but i think the world future energy summit and moving beyond traditional oil and gas into areas such as solar and other areas, offer a great potential for u.s. business.
i see u.s. businesses small and medium companies coming to the uae and finding an atmosphere there that is very conducive to build business for the region and beyond, as i said the transit hub. we have almost 800 u.s. companies there already. there's more coming. we need to encourage more companies to come there and do battle with the indias, the turkeys, the chinas of the world. so popular, still, if we can beat our competition like price and we can and our reputation and the way that we do business, and i'll stop there so we don't run into too many ambassadors talking for too long and i'll leave it up for questions and we're very much open for business and alternative area is one i can address more. thank you. >> thank you for that overview.
saudi arabia, certainly the largest economy in the bellwether and we look forward to your comments. >> you know that saudi arabia is open for business and he's had a interesting ton of years. this last year cross your in the exports and there's been been -- we increased 103% in the last year. so the big, big shift in the last two years we've had 208 companies that have exported to saudi arabia for the very first time. 80% of those small, medium
enterprises. so those of you who still are waiting on the sidelines, not in touch, we'll connect you up. the focus today was diversifying away from hydrocarbon, and i will leave you with three areas to consider because you will see a shift in that. the first issue is domestic consumption. i make it a matter of policy to never do math in public, but saudi arabia uses domestically about 20% of their oil in the wintertime, 30% in the summertime. their domestic -- energy consumption is increasing 10% a year and saying you'll do that for 20 years, you've got a problem. so that's the first issue they've got to deal with. because you go from being part
of opec to the organization of petroleum, non-exporting countries. that's not where you want to be. second issue is opportunity cost because if you consider the value of a barrel of petroleum, you realize that the current method of dealing with hydrocarbons as an exporter doesn't make a lot of sense. if you drill a hole in the ground, pump out oil and sell it to somebody the value is about $100 a barrel. if you refine it, go downstream, it's worth $300 a barrel and it creates three times the number of jobs that upstream does and it's been incredibly successful in the downstream, but at the end of the day you're putting the natural resources in there and sending it half way around the world for somebody else to make something with it. if you can take derivatives and turn it into products and it is worth about their 1,000 a barrel to you and creates ten times the number of jobs than upstream does.
if the problem is jobs, jobs, jobs, 3 million people entering the workforce in the next decade, then we've got to consider diversification of your economy because it makes no sense than to use that oil and dump it into furnaces and charge people for their electric bill and 60 cents a gallon of gas when you could be using it more productively as something else. it's the opportunity costs of using your hydrocarbon for something that doesn't make sense. and the third is the global market and where the global market is going.
and i say that because i don't know where it's going. i refuse to predict, but it was probably wrong and everybody was talking about peak oil. today nobody is talking about peak oil. the united states has shown a significant reduction and single digit and flat lined to reduction in consumption. if that continues at that pace, say over a decade, we put a dent into the u.s. consumption and use that as a model for other people then you have significantly changed the view of the global demand. if you add to that the improvement of the hydrocarbon wind, solar and nuclear, because
the current projects still only account for 15% of the global energy to be renewable by 2035. if that curve changes, then it makes a huge impact and the third, which is again, an issue nobody talked about five years ago, but everybody's talking about today shale oil and shale gas. and that if, in fact, our reserves are what some people are projecting and if you can overcome the ethical environmental challenges and you can move to shift some of our economy away from oil into natural gas for any number of reasons, those three things together fundamentally shift the global demand curve and i would argue that if they come together with the kind of technological innovation that is possible we could be having a very different conversation ten years from now than we are today. thank you.
>> thank you very much. let me remind everyone that if you have a question for any of the ambassadors please write it down in a piece of paper and we'll get the attention of one of the ushers and we'll have the opportunity to post these questions. now, ambassador zia, last time we talked it was in riyadh and you are now in doha and it would be very, very interesting to get your assessment of economic opportunities doha and things that are interested. >> thank you very much. as my two colleagues from saudi arabia and from the united arab emirates have said, the same thing is true for qatar, we are open for business and we are open for business with a great interest on u.s. products, u.s. services and u.s. technical know how and opportunities for joint ventures and investments both in qatar and investments in other parts of the world or the united states. qatar is the world's richest state per capita. it has the highest gdp in the world.
it is also the world's leading supplier of liquefied natural gas. in 2011 alone qatar's gdp rose 20%. and it is estimated in 2012 to rise at a slower rate, but still 6% to 12% which is a healthy rate in any standard, but particularly in these economic times and a lot of the drive on this has been due to the amir of qatar, sheikh khalid who has developed a vision for his country over the last 15 years and has put forward a vision for 2030 with the development and a whole array of areas of human development, economic development and economic diversity and diversification and social development. and as part of his vision for 2030, a good part of that is
also the infrastructural development in the country and the diversification of the economy that moves away from the simple upstream energy production that has been really the growth engine of the country. now it's true in the last five to seven years in the addition of new mega trains that have been developed in qatar, a lot of which has been joint production in exxon mobil and exxon mobil in particular over the last few years has invested over $16 billion in qatar in the gas sector alone has fueled a lot of the wealth for the country, but the leadership in the country understand that the wealth in gas needs to be diversified from upstream to downstream products. there's been a tremendous emphasis on the development of petrochemicals and other kinds of related industries in the carbon sector.
in fact, while qatar has been producing 9.5 million per year in the petrol chemical sector. it hopes to reach 23 million tons by 2020. that's its goal. so, again, while not totally moving away from the hydrocarbon sector, but making sure that they are producing downstream products that increases the value chain for production and also diversifies uses within their country and markets outside of qatar. now linked to that is a way of looking at the country away from the carbon sector ask how to make themselves a center through education and for the education where i'm proud to say education city hosts six major united states universities there with branch campuses providing education not just for qatar and the university's education, but for people of the region.
even though we don't always think of education as an export, actually in qatar it is and it's a big export and it's contributing to the development of the next generation of students and workers. they are looking to the area of sports. they hosted the asian games in 2006. they just recently hosted the arab games this past december and january and as many of you know they have won the bid for the fifa world cup in 2022. this has meant that all of their infrastructural development that was onboard for the vision between the 30 has now been moved up by eight years to the year 2022. so let me just give you a little bit of the overview of the major projects being undertaken in this regard because this is an area in infrastructure where we as a country have tremendous capability and we have tremendous breadth, not just in program management and also in building an infrastructure, training and maintenance. the highlights of this are the