From Volume 37, Issue 32 of EIR Online, Published Aug. 20, 2010

Global Economic News

Privatization Is Running Amok in Sweden

Aug. 10 (EIRNS)—The hasty privatization of Swedish public institutions, motivated by the ideology of the current neo-liberal government alliance, are again being attacked by the Opposition and even in the non-Socialist press. The leader of the left party, Lars Ohly, in an op-ed in Dagens Nyheter on Aug. 8, blasts the privatization of Swedish schools; big private school companies, some multinational, are reaping hundreds of millions of crowns in profit from public money.

The Swedish schools are now a prime item for private equity hedge funds, where the American fund Providence Equity Partners was in a bidding contest with the Swedish Wallenberg-controlled hedge fund EQT to buy the biggest school company in Sweden, called Academedia. Now, 14% of Swedish primary schools, including junior high schools, are private, and 44% of the high schools.

Under the late Social Democratic Prime Minister Olof Palme, there were no more than ten private schools; but with the long struggle to open schools to religious stewardship, the private markets were unlocked. The profits in the private schools are in the range of $420 per pupil per year, but profits as high as $4,000 per year have been reported. Even the leader of the Teachers Association, Metta Fjelkner, was quoted in the daily Svenska Dagbladet on Aug. 7, that she has changed her mind, since the privatizations are not leading to higher salaries, instead, more profits which are taken out of the school system.

The state-owned railway company is currently under pressure to also behave like the privateers, with demands that it deliver a profit of 15% on its capital.

China, Vietnam Reject Ethanol and Garbage Power

Aug. 10 (EIRNS)—Zhao Youshan, president of the China General Chamber of Commerce petroleum division, has repeated his demand that China end government-subsidized corn-ethanol production, the Beijing Times reports. Zhao first made this demand a month ago. He said that ethanol production has led to the rise of corn prices in China, turning the corn-exporting country into a corn-importer this year. Even so, the output of corn ethanol appears tiny when compared with the domestic demand for gasoline, he says. Zhao heads China's biggest membership association of private petroleum enterprises.

In Vietnam, they are asking, why would anyone invest in green electricity production to suffer losses? Ho Chi Minh City (HCM) solid waste management chairman Nguyen Trung Viet estimates that to produce 1 kWh of electricity from garbage costs 20 cents (without subsidies), but costs only 4 cents with traditional power plants.

One landfill in HCM that he operates has a $13 million plant, mostly built with a large grant from the Netherlands, to produce electricity from garbage. That plant produced just enough electricity to run the garbage-burning plant itself!

French Farm Crisis Entering Hot Phase

Aug. 11 (EIRNS)—For several days, dairy farmers all over France have been raiding supermarkets, targetting Lactalis, Bongrain, Sodiaal, and Bongrain products, on which the farmers put a label reading: "Sold at the expense of farmers," to encourage consumers to boycott these products.

According to the deal the unions signed onto last year, dairy farmers thought they would get a better price "if the market price of milk went up again." Today, the market price is higher, but the industry refuses to pay the farmers the proportional increase (a mere EU3.1 cents per liter) that they were promised.

Many farmers now feel betrayed by President Nicolas Sarkozy and Agriculture Minister Bruno Le Maire, both obsessed by the idea that "private" regulation and corporatism can replace national or European regulations (the milk quota system).

Moreover, financial speculation is driving up the production costs for both meat and milk. Wheat for fodder increased by 70% in July alone, pulling maize and barley to follow the trend. Soy prices also are rising, while the U.S. soy harvest did well. To speculate, inventory was bought in advance by private speculators.

As of Aug. 6, forty-six out of the 100 French departments had been hit by drought. In Ille-et-Vilaine (in Brittany), the major milk-producing department of France, the harvest of animal fodder is expected to be one-third below average.

China Accelerates Transition to Fast Breeder Technology

Aug. 10 (EIRNS)—In addition to its ambitious conventional nuclear program, including the import of Westinghouse AP-1000 reactors, and its own indigenous design, China is also pursuing a program of fast breeder development. The first of the fast reactors in China, known as the Chinese Experimental Fast Reactor (CEFR), achieved sustained fission for the first time on July 25, nine years after construction began. Located at the China Institute of Atomic Energy, some 40 kilometers outside of Beijing, the CEFR was built with Russian assistance, and the fuel is supplied by Russia. The Chinese plan for breeders, until about a year ago, was to commission at first a 600-MWe commercial prototype fast reactor (CPFR) of indigenous design in 2020. That was to be followed by a commercial demonstration fast reactor (CDFR) in 2025, eventually leading to full-fledged commercialization of the design in 2030.

This plan has now been abandoned in favor of a much-accelerated program utilizing Russian technology. Later this year, Russia and China are to conclude a final agreement on construction of two Russian-designed BN 800 reactors in Fujian province. This plant will have a capacity of treating about 100 tons of spent fuel annually. One unit is expected to be in production before 2019 and the other a year later. A pilot plant for producing MOX fuel (depleted uranium and plutonium oxides) is also under construction, that can produce 500 kg of fuel per year. Larger commercial plants for reprocessing and fuel fabrication are planned to be built by 2020. Russia and China are to sign an agreement on this program before the end of the year.

Nikolai Ponomarev-Stepnoi, the vice president of the Russian Kurchalovsky Research Center, explained the importance of the project: "We should develop a fast breeder reactor in 20 to 30 years and introduce it in industrial production; it is one of the technological tasks that must be fulfilled. When we talk about providing energy for the ever growing population of the world, we ought to think in the long-term prospect. Breeder atomic energy development will meet the requirements of man for a long period of time. Russia and China will sign an inter-governmental agreement after coordinating all the details, thus opening the way for all-round development of breeder atomic energy technology." The Chinese nuclear program does not stop with the breeder, however, but sees this technology as a transition to the next stage, the development of thermonuclear fusion power, in which it is already engaged.

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