Hill+Knowlton Strategies

It’s been nearly two weeks since Barack Obama was inaugurated for his second term, and Beyoncé is still in the headlines. “Give the girl a break…Wouldn’t you use a backing track?” Please….surely this kerfuffle has more to do with her own PR people looking to drum up anticipation for a little gig she’s got on Sunday and she wants to beat someone else’s record? I digress….

The US got a new Diplomat in Chief today in the shape of former Senator John Kerry. If the past two weeks are anything to go by, he’s got his work cut out for him.

Africa’s moving back in to the agenda (has the Asian pivot distracted State Department, I wonder?). France has taken the lead in Mali, but the UK quietly sent troops in this week. Will America follow? I was surprised at how quiet the White House and Foggy Bottom were during the siege at In Amenas, but Secretary Kerry said in his confirmation hearing that embassy security and stability in the Maghreb would be priorities for him.

Syria’s headed in to the third year of civil war; 65,000 have died and violence keeps dancing on the border with Turkey. And this week, Israel got involved.  It will be interesting to see how that plays out in the next few weeks.

Later this month: picking back up with the “talks” with Iran with the UN Security Council (and Germany)….or they might happen, if those Western Powers would just stop being so darn tricksy. Potentially good timing – “defiant” Iran has just announced they’re upgrading their enrichment capabilities at Nantaz. (NB: I think calling Iran “defiant” is like calling one of these “potentially dangerous”).

Egypt continues to be rocked by instability, and more than 50 people have died after riots, which followed a ruling about…riots. Say what you will about President Morsi, he was able to step up when it came to negotiating with Hamas and Israel last autumn. Can Secretary Kerry rely on him to focus on “other people’s problems” when he’s got so much on his own plate? And would it be right to do so?

And that brings us back to Israel…Kerry has historically been a supporter of Israel. They just had elections too, and while Prime Minister Netanyahu is still in power, he’s weakened, and some far right parties have made gains. This may not bode well for the Palestinian peace process, or indeed for the situation with Iran.  I’m not a foreign policy expert, or a political expert, but I can’t help but wonder if Kerry’s appointment was a subtle olive branch to Prime Minister Netanyahu that the US is still onside, despite the less-than-cuddly relationship between the Prime Minister and President Obama.

Secretary Kerry has big shoes to fill, and has to fill them at an increasingly fraught time for geopolitics and international stability, and to be the international face for a country that needs to redefine its role in world affairs. I shall be watching with interest…

Last week we were reminded of the rare, but sometimes terrible consequences of working in remote places to secure energy supplies. In monitoring the situation unfolding in Algeria I was struck not only by the terrifying nature of the raid on the In Amenas facility, but also at the challenge of getting good information, by Governments, the firms involved and the media. Of course this is a very remote site, in the sands of the Sahara no less, so you would expect difficulties in getting reliable information. That said in these hyper-connected days the vacuum created by rolling news and live blogs on newspaper websites and Twitter was for an observer challenging. For those more closely involved it must have been intolerable.

In the weeks and months that follow BP, Statoil and Sonatrach together with their respective Governments and the wider industry will try to come up with a solution. There will no doubt be many suggestions though there was one thing that might help that occurred to me during a particular bulletin and that was the use of unmanned aerial vehicles.

Perhaps this has already been done by companies, but I suspect it hasn’t yet. I saw reports that the American military had used an unarmed UAV to monitor the situation at In Amenas. Of course the monitoring capabilities of these machines is vast with their specialist cameras. Their range is also extensive, their cost falling and the risks of using them very low. Will it really be that long before energy firms with remote assets start to deploy these machines?

It first struck me that it won’t be long before the media begin to use them. Watching rolling news over the last few days, there has been scant imagery showing events unfold. Only a few smartphone pictures ultimately made it to our screens. For families affected this must have been something of a blessing, but for bulletin editors used to having footage almost immediately of an event like this, it must have been a challenge. I really wouldn’t be surprised to see the first media drones (UAVs) circling above an unfolding story within a few years time.

So if the media look likely to invest to stay ahead of a developing story, I would also not be surprised to see companies investing in this technology in the coming years.

Of course the situation remains unclear still for some families and we hope and pray that there may still be some miraculous good news to come to those families who have had their lives thrown into turmoil.

In the last decade, the Brazilian economy enjoyed its largest growth in 70 years. More than 20 million jobs have been created since 2001 – an increase of 68% — due to business investments and increased production across several industries.

This recent growth was driven in part by the discovery of the pre-salt layer off the coast of Brazil. It is currently being explored by Petrobras, the world’s 5th biggest energy company, through partnerships with other national and international companies. Currently, the pre-salt layer (including Campos Basin and Santos Basin) has a total production yield of 230 thousand barrels per day, which represents almost 12% of the state owned company`s total production (1.94 million barrels per day).  In 2016, the pre-salt fields are expected to represent 31% of the country’s total production.

Exploration of Brazil’s pre-salt has also highlighted a lack of skilled labor in Brazil, which is needed to meet the demands of the energy industry. Obviously, the shortage of skilled labor is a global issue, not a Brazilian one, but there are some policies in this country that make everything a little harder. One of them is the local content law.

The local content law establishes that Brazilian people and services have hiring priority, but this varies according to each segment. The minimum percentage depends on a number of factors since the law is so complex. There are projects in which at least 50% of the individuals/companies hired need to be Brazilian, and other areas where demand is 70%. In the energy industry, this percentage is 65% and is one of biggest obstacles that hinder its development.

In the country, the oil and gas industry is expected to double its production by 2020, but the professionals who graduate every year are still very few and won’t meet the demand.

Some companies have already taken notice of this problem and have been investing in trainee and internship programs, partnering with universities and offering international opportunities for its employees, as well as great pay. These are moves that aim to attract what little manpower is available today, since these professionals are also being sought by other industries such as mining and infrastructure, both very heated markets in Brazil.

This lack of manpower in Brazil means the country is at risk of serious stagnation in productivity levels. Currently, only 7 percent of Brazilian workers hold a university degree. Other economies that are less developed than Brazil have a higher proportion of workers with university degrees. This is true in countries like Chile (24%), Russia (23%), Kazakhstan (18%) and South Africa (9%).

To solve this issue, some ideas have been proposed by industry experts: relaxation of work permit requirements for foreigners while still valuing domestic labor,  ensuring that foreigners who come to Brazil help train the local workforce; providing training for current workers; and more government investments in technical education and training courses for those who are interested in the opportunities generated by this period of growth in the country’s energy sector.

Hopefully the Brazilian government will address the situation shortly – it has already started public hearings about the relaxation of work permits – avoiding a collapse of the infrastructure sector and allowing companies investing in Brazil to continue growing and creating more jobs.

Petrobras Mexilhão jacket launched to the sea in Brazil - photo credit Petrobras News Agency

Shadow Defence Secretary Jim Murphy said defence was the first responsibility of government, as he launched Labour’s consultation on the party’s vision for UK defence policy earlier this week.

The consultation laid out three key areas of focus: the current security landscape and threats to the UK; our strategic approach in terms of national values and international collaboration; and defence infrastructure including kit, equipment and capability.

Having never heard Mr. Murphy speak before, I have to say I was impressed. Speaking at Policy Exchange, he was supportive of the Afghanistan mission (noting though, that it is increasingly “calendar-led”, rather than “conditions led”) and agreed with Foreign Secretary William Hague’s recent comments that the Arab Spring will be as defining for the international security landscape as 9/11. However, when the inevitable criticism of Coalition policy came, it was delivered with a dry wit and he came across as an incredibly reasonable man.

Quick to position Labour as a defence-friendly party, Mr. Murphy was particularly critical of the Government’s cuts to the Ministry of Defence budget, saying “David Cameron has shown an ambivalence towards defence policy which lies in stark contrast to the commitment shown by previous leaders, including Tony Blair or even Margaret Thatcher… The government’s rushed review has been driven by savings not strategy. The government did not match ends with means, precipitated strategic shrinkage by stealth and has left us with dangerous capability gaps.”

While light on detail – perhaps to be expected from a shadow minister in a consultation document – there were three points that points in particular that stood out:

• BIOTERROR. I was expecting cyberterrorism to be pointed to as a key threat, but not bioterror. While I agree in the long-term, in the immediate future I’m of the mind-set that more damage can be done through cyberterrorism than with anthrax, small pox or virulent strains of bird flu
• The C-word: there’s not a politician in town that doesn’t use the c-word…cuts. What was interesting, though, was the language used by Mr Murphy, referring to a “coalition of cuts” when describing how countries – particularly those in Europe – should collaborate on defence policy in terms of budget
• Values, not just interests: refreshing to hear a politician acknowledge in plain English that defence policy is at least in parts driven by values – not just national interests; in other words, let’s be clear that we’re not in Afghanistan strictly to protect Britain from terrorism, but to also build a democracy.  Values usually get lumped with development policy, and Mr. Murphy and one of the other speakers, RUSI’s Malcolm Chalmers, both reiterated that defence and development could not operate in isolation. Maj. General Tim Cross also spoke, and he made compelling points about the need to consider the infrastructures of peace when entering in to conflict – this resonated with me in particular given my work with the Global Peace Index

I was expecting more meat on the policy bones, but I was nonetheless impressed by Mr. Murphy. Time will tell whether Labour is in fact the “party of defence” that it is trying to position itself as, but I certainly expect to see more from Mr. Murphy in the future.

Now that the dust (snow?) has settled following this year’s World Economic Forum, I wanted to shed some light on what I’ve learned about the annual Alpine gathering.  I’ve had had the opportunity to attend the Forum three times; the past two years working with my colleague Lalu Dasgupta on communications for Brand South Africa.

“To fail to plan is to plan to fail…”

If there’s one thing I’ve learned about WEF, it is to go with the flow.  I’ve learned this the hard way, causing myself undue amounts of stress and panic trying to control a carousel of changing diaries, changing venues, changing agendas. Yes, of course one needs a plan, a schedule, a programme. But plan for that plan to fail, and you’ll be a step ahead of the game.  One of the most beautiful things about WEF (besides the stunning views) is the serendipitous encounters and impromptu meetings that happen on the Promenade, in the corridors of the Congress Centre and over a nightcap in the bars. You can’t plan for these, but if you plan to be flexible, you’re guaranteed to have a more productive WEF than if you insist on keeping to a schedule.

My chance encounter with the Mayor of London

Getting on the list

Remember that bit about planning? Ignore it. Just kidding – but if you’re looking to hire a venue for an event you best move quickly! Again, I speak from experience. The best chance you’ll have at securing a venue is to book it in for the next year while you’re in Davos.  The venues tend to have a “grandfather clause” with all their bookings, so book early…or at least get on the waiting list.  South Africa moved from the bar at the Belvedere to the wonderful Kirchner Museum this year, and when we were scouting for new space I was informed that one space had been used by the same company for more than 10 years, and there were wait lists six-deep for some of the other spaces. I’ve now been to most of the venues in Davos – either on reconnaissance missions or for events – so if you have any questions or need suggestions, drop me a line at sjurkowsky@hkstrategies.com

It can’t all be doom and gloom…have a beaver tail

Canadian delicacy on offer

For such a sleepy little town, Davos offers a wealth of branding opportunities.  While WEF is serious event hosted in a particularly gloomy context, there’s still a flock of companies and countries looking to showcase their wares, build their brand and attract investment.  My favourites include the branded buses (like these from South Africa!), the Canadian Beaver Tails pop-up pastry shop and Mexico’s fiesta night.  For years, the South African delegation has shown their pride by wearing scarves in the national colours, and these have become such a hot commodity with WEF guests that more than 300 were handed out this year!

Increasingly, it’s the countries that are leading the way at WEF, from emerging markets to G8 nations – and the ones that do it best are the ones that approach their branding with a little creativity and tongue-in-cheek humour.

President Zuma visits the South Africa Business Hub and meets with the Brand South Africa team (all proudly wearing our scarves!)

I’m already looking forward to WEF 2013, with hopes that we’ll be gathering in a more upbeat climate. If we’re not – and that’s likely to be the case – I’ll still be there wrapped in my South African scarf, ready for more serendipitous encounters and the chance to learn, debate and discuss the continuing global transformation.

Fun fact about H&K London’s “Energy & Industrials” team – we do a lot of international affairs work too.

Part of this includes the launch of the annual Global Peace Index, the fifth of which we launched yesterday. The GPI is a product of the Institute for Economics & Peace. This year, we managed the global media launch (check out this, this, this and this) and hosted an event at Chatham House.

This year’s GPI painted a pretty grim picture – the world became less peaceful for the third consecutive year and the global economy lost $8.2 trillion last year to violence. The Index is the world’s leading measure of global peacefulness. It gauges ongoing domestic and international conflict, safety and security in society, and militarisation in 153 countries by taking into account 23 separate indicators. It’s definitely worth checking out the website – lots of interactive charts, maps and infographs to play around with.

Some key factoids:

• Libya tumbled 83 spots in the rankings, the largest ever fall in GPI history
• Iceland bounced back from economic woes to top ranking
• Iraq’s no longer the world’s most violent place, as Somalia dropped to the bottom of the index
• The UK moved in to the top 30 of the Index for the first time ever. Whoop, whoop.

The Arab Spring caused the most dramatic changes in the rankings since the first GPI came out in 2007.  Libya wasn’t unique in having a steep tumble in rankings, with Bahrain dropping by 51 places to 123 and Egypt dropping 24 places to 73. Tunisia, where the revolution was less prolonged, dropped by 7 places from 37 to 44.

People frequently associate peace with being the resolution of external conflict and war and having harmonious relationships with neighbouring states. However, when studying peace and conflict, it is equally important to look at domestic stability and what actually creates a peaceful society.

The most dramatic changes in this year’s GPI were, in fact, driven by internal conflict – Arab Spring case in point, but also something seen here in Europe as people protest against spending cuts and high-unemployment.

What’s great about the GPI is that there’s enough data there now to start examining trends, and to identify the key drivers – or structures – of peace. These include: well-functioning government; a sound business environment; equitable distribution of resources; acceptance of the rights of others; good relations with neighbours; free flow of information; high levels of education; low levels of corruption. Having one in isolation of the others does not a peaceful society make.