Don't forget to pay the bill on your way out, G8 delegates told

The Lough Erne golf resort in Northern Ireland  is the scene of next week's G8 summit. (Tanya Talaga/Toronto Star)

Everybody complains about the high cost of doing business in the United Kingdom.

Even delegates attending the G8 summit next week at the luxurious, five-star Lough Erne golf resort in Enniskillen, Northern Ireland got a bit of a surprise after they were told they'll need to pay up before they check out of the resort.

The cost per delegate is 1,000 pounds a day, roughly $1,600, reports Reuters. Mind you, there is a very nice spa complete with a Thai therapist team, a world-class golf course and a library dedicated as a "quiet zone for peace and tranquility" that could come in use when the summit gets rough. 

Inside the Lough Erne, a contemplative and comfortable spot to stop for tea. (Tanya Talaga/Toronto Star)

And then there's that massive high security fence that rings around the property, aimed at keeping demonstrators far away from the area.

Some leaders, who come with at least a dozen staffers, aren't impressed with what they say is a sudden charge. U.S. President Barack Obama, Prime Minister Stephen Harper and Russian President Vladimir Putin are all on their way to the resort to participate in the high-level meeting, aimed at discussing a range of issues from free trade to tax evasion, food insecurity and Syria.

"As far as we know, this has never happened before ... It's unprecedented and hasn't been handled very well," one European delegation official told Reuters.

Apparently countries were just informed a few days ago that delegates would have to pay. The British government is picking up the tab for each head of state and one official, the news agency reported.

Lough Erne, set among the rolling, green hills of Northern Ireland, is a beautiful resort, nestled on one of the best golfing greens in the United Kingdom. Duck ponds and quaint paths snake around the resort, which consists of one grand meeting house surrounded by a village of private swank cottages.

Besides golf, it is a popular, picturesque venue for weddings.

The view from the back terrace at Lough Erne. (Tanya Talaga/Toronto Star)

As the world economy continues to sputter along and countries look to save money, perhaps some of the delegates should have stayed in the town of Enniskillen, where hotel rooms are more along the lines of 100 pounds a night.

Tanya Talaga is the Star's global economics reporter. Follow her on Twitter @tanyatalaga

Bottoms up! U.K. social spending initiative to invest in pubs

Money for beer? David Cameron's new push to kick-start U.K. entrepreneurship includes cash to help people open pubs and village greens. (AP Photo/Kirsty Wigglesworth)

British Prime Minister David Cameron's government may be imposing controversial austerity measures across the U.K., but, this time he may be on to something.

Cameron announced on Thursday that he'll be giving 250 million pounds to prop up the "Big Society" initiative, a campaign he kicked-off in 2011 to get behind British entrepreneurs, manufacturers and builders in the hopes that investments will create jobs.

The quarter of a billion pounds will be available, in part, to communities so they can open up their own pubs, shops, community centres and village greens, reports the Daily Telegraph.

"Everyone knows how vital institutions in our towns and villages are, like village halls, playing fields, local pubs. And everyone knows how, despite the best efforts of parish and local councils, these can face closure. I want our social investment funds to give people the opportunity to take them over and run them," he said.

The money comes from the Big Society Capital and the Big Lottery fund, for the rest of the decade, notes the Telly.

Earlier this year, one of the big news items coming out of Cameron's budget was that the price of a pint of beer was reduced by one pence.

Meanwhile, council or local municipal governments have struggled under Cameron's austerity agenda. Northern English towns have suffered more than those in the richer south because they have relied on more support from London. In Liverpool, for instance, they are closing libraries, local sports programs are in trouble and food banks have sprung up across the city.

Liverpool was forced to trim $221 million from its budget in the last two years and during the next four years, another $224 million must be chopped.

The anti-austerity crowd believe increasing government infrastructure spending during times of economic woes will stimulate the economy and create jobs.

Not sure if this is what they had in mind.

But it might work.

Tanya Talaga is the Star's global economics reporter. She is currently reporting from the United Kingdom. Follow her on Twitter @tanyatalaga

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Big box Walmart faces backlash from workers

Walmart employees and supporters walk a picket line last week in Pico Rivera, Ca. to protest Walmart's retaliation against workers who speak out. Some borded a bus to start a 1,500-mile bus journey titled "Ride for Respect, "' and bound for Walmart headquarters.Photo by Kevork Djansezian/Getty Images

 
Walmart, the retail giant that ate America – and is licking its chops over Toronto’s Kensington Market district -- has been chewed out by critics for balking at an agreement on fire and building safety in Bangladesh.

That was after the recent factory collapse that cost the lives of more than 1,000 garment workers who supplied goods to Walmart and other international brands.

Walmart did agree to independent inspections of its suppliers’ factories, saying they are more reliable. And it fired its former supplier. But workers’ advocates say that falls short of taking responsibility for improving the wages and conditions of offshore workers.

Now the bad vibes from Bangladesh are bouncing back. Thanks to crowdsourcing, an American lobby group has raised over $9,000 to bring over a Bangladeshi survivor of a fire that predated the building disaster to Walmart headquarters in Arkansas. She'll join a day of protest timed to coincide with the company's annual shareholder meeting on Friday. 

So will 100 striking Walmart workers, who are part of a landmark nationwide action to upgrade its U.S. wages and working conditions and end retaliation against employees who try to organize or speak out.

Hundreds of others in 30 U.S. cities are setting out on civil rights-inspired caravans across the country to educate Walmart workers on the issues they face. 

It’s not how Walmart wanted to wind up a year of celebrations for its gaspingly successful 50th anniversary.

According to Business Insider, its full-time employees alone number 2.1 million, or seven times the population of Iceland. Its revenue in 2011 was $419 billion – larger than the economy of oil-rich Norway. And last year everyone in the world made an average of 1.1 purchases at a Walmart store.

It has also weathered thousands of lawsuits, including a class action suit for gender discrimination launched by some 2,000 women.

But while Walmart is way too big to fail, many of its American workers complain that their wages are too small to survive on without a second job.

For part-time workers who don’t have a chance at a permanent job, says John Logan of San Francisco State University, “constant changes to their schedules make it impossible to take a second job or return to school.

“They frequently are forced to rely on public assistance in the form of food stamps and low-income health care for survival, and when they do, taxpayers pick up the tab.”

Walmart argues that its low-cost goods are a boon to the community and it has tremendous respect for its euphemistically-labelled “associates” who have every chance to rise in the company and prosper.

The term is aimed at raising the spirits but not the pay of those who earn an average of $8.81 an hour according to a Bloomberg study.

“Even at $12.67 per hour,” says Logan, “a Walmart employee would need to work for approximately 786 years to earn (CEO Michael) Duke’s annual salary for 2012.” That would be $20.7 million.

Will the protests spark a boycott of Walmart?

Not likely. As wages deteriorate, the middle class shrinks, the social safety net frays and jobs become more precarious, its captive consumers are too tired, too broke and too harried to seek alternatives.

It’s oversized, overambitious – and over here to stay.

Olivia Ward has covered conflicts, politics and human rights from the former Soviet Union to the U.S., South Asia and the Middle East, winning national and international awards.

Tax crusader coaxes Canada to address murky practise of tax transfers

A May 23, 2013 photo of mining trucks parked at the Barrick Gold Corp.'s Pascua-Lama project in northern Chile. (AP/Jorge Saenz)

John Christensen is a Canadian mining company's worst nightmare.

As head of the U.K.-based Tax Justice Network, Christensen has spent years travelling the world, sound the alarm about the murky but legal practise of tax transfers, where companies minimize their tax exposure by shifting profits from cash-strapped developing nations to subsidiaries in tax havens.

Christensen, a former economic adviser to Jersey, a well-known tax haven, and now a critic of secretive havens, has been campaigning for change for a decade, telling The London Guardian in 2004 that its actions would lead Jersey to become "an overpriced ghetto for the very wealthy."

Today, Christensen has many reasons for optimism -- except when he looks at what's happening in Canada.

"Public finances are crumbling across the world," Christensen said in a phone interview from Ottawa. "Not only in the obvious cases like Greece and Portugal, but in some of the world's leading nations, austerity programs are failing, deficits are widening, and there's a recognigition that the inability to tax capital is a significant part of this problem."

Over the past years, Christensen said, it's like a switch has gone off in the governments of the developed world. 

An amendment to the new Dodd Frank Act in the U.S. will take effect as soon as next year and force any company listed on the U.S. stock exchange to publicly report any and all payments made overseas. That amendment should impact about 100 Canadian-based oil and mining companies.

The European Union has passed similar legislation.

A private member's bill in Canada, C-300, would have introduced similar requirements here but failed to win enough votes. Mining companies coaxed mayors and other politicians in towns where Canadian mines are based to pressure local MPs to vote against the bill, somehow convincing them it would mean local job losses, Canadian MP John McKay said in an interview.

Nevertheless, Christensen said there will be no escape for Canadian firms, particularly after the G20 countries in April agreed to support an effort to stop international tax evasion by urging governments to systematically share bank data.

That effort is moving forward in spite of Canada's resistance, Christensen said.

"Canada needs to catch up here," he said. "The other laggard on this within the G8 is Russia. That says it all. Canada had promoted keeping as the standard a system called tax information agreements, where information was offered on request."

Automatic information exchanges, however, should dramatically speed up the amount of time it takes to pursue investigations.

There is a flurry of examples of large multinationals under scrutiny for its tax-shifting prowess. Earlier this month, for instance, a U.S. senate subcommittee accused Apple of using subsidiaries in Ireland to minimize its taxes. One affiliate, Apple Sales International (ASI), reported sales income of $74 billion over four years but paid hardly any tax. In 2011, ASI had pre-tax earnings of $22 billion but paid $10 million in tax, a rate of 0.05 per cent.

Google has been accused of employing similar tactics.

Christensen says mining companies are among the most aggressive at shifting taxable revenue and figures Canada's tepid approach to tax reform "reflects a powerful banking and mining lobby.

Rick Westhead is a foreign affairs writer at the Star. He was based in India as the Star’s South Asia bureau chief from 2008 until 2011 and reports on international aid and development. Follow him on Twitter @rwesthead

Canadians among happiest in survey of 39 countries

You may not be shocked to learn global attitudes have changed for the worse since the global economic downturn, according to new Pew Research Center findings of widespread gloom in 34 of 39 countries surveyed.

The mood is notably worse in advanced and developing economies and only slightly higher in emerging markets, Pew found, pointing to China and Malaysia, where large majorities (85 per cent and 82 per cent, respectively) say their country is moving in the right direction.

But Canadians nevertheless came up roses among their advanced-economy peers in the survey, with 55 per cent of those surveyed expressing satisfaction with the trajectory of the country. That figure is second only to Germany (57 %) and well ahead of the United States (31 %), the United Kingdom (26 %) and France (19 %).

Spain, Italy and Greece, driven by the crosswinds of debt and austerity (debtsterity?), occupied the unhappy basement with single-digit contentment levels of 5, 3 and 2 per cent, respectively.

On the question of personal economic conditions, Canadians actually top the list of all 39 countries, with 82 per cent describing their own situation as good (that's a tie, actually, with an equal number of Malaysians expressing the same sentiment). 

The Pew findings are slightly different when it comes to the question of optimism for the coming year, with Americans among the most hopeful, with 44 per cent anticipating things will improve in the next 12 months, compared to 29 per cent of Canadians.

Pew also asked about inequality and whether people would like to see their leaders focus on narrowing the gap between rich and poor. Here, 45 per cent of Canadians described inequality as "a very big problem." 

But the Canadian figure is dwarfed by responses almost everywhere else Pew asked the question, with majorities in 31 of 39 countries describing the rich/poor gap as a very big problem for their societies.

Pew's 91-page report was shown to the Toronto Star on embargo. But the full findings, including methodology, are up now at pewglobal.org.

Mitch Potter is the Star's Washington Bureau Chief, his third foreign posting after previous assignments to London and Jerusalem. Potter led the Toronto Star’s coverage of the wars in Iraq and Afghanistan, where he won a 2006 National Newspaper Award for his reportage. His dispatches include datelines from 33 countries since 2000. Follow him on Twitter: @MPwrites

German firm SAP on autistic employee drive

A group of Star journalists and editors spent months producing the acclaimed Autism Project. Many stories dealt with helping autistic adults fit into society and find jobs.

The German software giant SAP is on a recruitment drive for autistic adults to test some of their information technology products.

The company announced on Tuesday that they will work with the Danish firm Specialisterne to hire autistic adults as software testers, programmers and data quality assurance specialists.

SAP has set a goal of making sure 1 per cent of their global workforce of 65,000 are autistic by 2020, the BBC reports.

A staggering 1 in 88 people are autistic and the rates are consistently climbing, according to the U.S. Centers for Disease Control and Prevention. Autism is a neurological disorder that traps children in their own minds, often leaving them unable to communicate, socialize or reach their potential without intensive and expensive intervention therapy.

"By concentrating on the abilities that every talent brings to the table, we can redefine the way we manage diverse talents," said Luisa Delgado, an executive board member at SAP, in a release. "With Specialisterne, we share a common belief that innovation comes from the 'edges.' Only by employing people who think differently and spark innovation will SAP be prepared to handle the challenges of the 21st Century."

Specialisterne was founded by Thorkil Sonne. The father of an autistic son, Sonne quit his lucrative job, mortgaged his house and formed Specialisterne, which translates into English as the "Specialists," to help adults on the autism spectrum find employment. Sonne's son, Lars, was diagnosed with autism when he was 2.

Sonne, an IT specialist, was struck by how remarkably adept some autistic children are with technology.

“I could see the skills, and I could see the need in the corporate sector for these skills,” he previously told the Star. Sonne's firm has now expanded to Poland, Iceland, Norway, Ireland, Austria, Switzerland, Germany, the U.S. and the U.K.

SAP has already hired autistic adults in India and Ireland on pilot projects and both were successful, the company said. SAP will expand their program, this year, to Canada, Germany and the United States.

MORE: An eRead version of the Autism Project is coming soon from StarDispatches.com

Tanya Talaga is the Star's global economics reporter. She was also part of a team of Star journalists who produced an in-depth, award winning investigation called the Autism Project.  Follow her on Twitter @tanyatalaga

Apple, tax bills and Ireland

Apple CEO Tim Cook readies himself for a grilling by a U.S. Senate subcommittee on Tuesday. (Jason Reed/Reuters)

Nobody likes paying the tax man, especially big, multi-national corporations.

As governments struggle to manage out-of-control deficits, fight unemployment and pay for ballooning social programs, some billion-dollar companies reap profits beyond anyone's wildest dreams and then hides them.

Well, the U.S. Permanent Subcommittee on Investigations of the Senate has had enough.  They are upset. The latest target of their collective wonder and anger is the great American tech success story -- Apple.

The Senate wants to know why the tech giant holds $102 billion of its $145 billion in cash, overseas, and, how an Irish subsidiary could earn $22 billion in 2011 and paid only $10 million in taxes, according to the Associated Press.

The New York Times has done some incredible, dogged investigative work uncovering the core of Apple. They even won a Pulitzer prize for their journalism. But their reporting on how Apple allegedly dodges its taxes by a web of holdings in places like Ireland, that have lower tax rates than others, struck a nerve.

The Times said Apple paid $3.3 billion in cash taxes globally on $34.2 billion in profits last year, that is a rate of 9.8 per cent.

The subcommittee is trying to wrap its head around the "structures and methods employed by the multinational corporations to shift profits offshore and how such activities are affected by the Internal Revenue Code."

Or, put quite simply, how the heck do corporations explain marginally less tax bills when America is going broke and the average person is stuck with the bill?

Apple CEO Tim Cook is in the hot seat today before a subcommittee hearing. Cook, according to his written testimony released this morning, sees things quite differently. He argued the U.S. corporate tax system has "not kept pace" with the digital age and the "rapidly changing global economy."

Apple supports "comprehensive tax reform" as necessary to promote growth and enable American multinationals to remain competitive.

Apple is a good corporate citizen, he argues. They have created or supported 600,000 U.S. jobs, including 55,000 for Apple employees and another 550,000 in other linked industries. And, they are true to its California roots by being headquartered in Cupertino.

"Apple is likely the largest corporate income tax payer in the U.S., having paid nearly $6 billion in taxes to the U.S. Treasury in FY2012. These payments account for $1 in every $40 in corporate income tax the U.S. Treasury collected last year," his testimony read.

Cook absolutely denied Apple dodges taxes. "Apple does not move its intellecutal property into offshore tax havens and use it to sell products back into the U.S. in order to avoid U.S. tax; it does not use revolving loans from foreign subsidiaries to fund its domestic operations; it does not hold money on a Caribbean island; and it does not have a bank account in the Cayman Islands."

Over to the testimony of Richard Harvey Jr., a professor of practice at the Villanova University School of Law and Graduate Tax Program and former senior adviser to past IRS commissioner Doug Shulman.

Apple has been very successful in minimizing its global income tax burden, Harvey said.

Harvey, in his written testimony, noted Apple recorded approximately $22 billion of its 2011 pre-tax income in Ireland, as a result, 64 per cent of Apple's global pre-tax income is recorded in Ireland, where only 4 per cent of its employees and 1 per cent of its customers are found.

If Apple didn't have a cost sharing agreement in Ireland, its 2011 pre-tax income would have gone up by $22 billion, "resulting in an additional federal tax liability of approximately $22 billion x 35 per cent = $7.7 billion," Harvey's testimony read.

Tanya Talaga is the Star's global economics reporter. Follow her on Twitter @tanyatalaga.

Who is Asia's No. 1 investor in Africa? Not China

Watchdog groups have sounded repeated warnings about China’s interest in Africa.

China, its critics contend, has a voracious appetite for Africa’s wealth of natural resources and is building new seaports and financing the construction of highways, hydro dams and other infrastructure to build up its influence there.

After years of watching western powers vie for control of Africa, some Africans muse China could become another colonial power there.

Yet new data released by the United Nations shows China is not the biggest Asian investor in Africa. And the title doesn’t go to India, either.

Rather, Malaysia, a country of 28 million, is the biggest Asia-based investor of all in Africa, behind only the U.S. and France.

Malaysia reported $19.3 billion worth of foreign direct investment in Africa in 2011, more than the $16 billion of African investments owned by China and the $14 billion held by India, according to the UN Conference on Trade and Development.

Reuters reports Malaysia’s interest comes largely through the investments of Petronas, Malaysia’s state-owned oil company, and Sime Darby, a trading and manufacturing company.

Malaysia, where the economy has expanded an average of 6 per cent for each of the past three years under Prime Minister Najib Razak and is expected to grow more than 5 per cent this year,  may be drawn to Africa for slightly different reasons than China.

According to a report in Foreign Policy magazine, corporate Malaysia's investments in Africa are mostly in Mauritius - a well-known tax haven.

By the end of 2010, Mauritius hosted 27,500 holding companies controlling more than $400 billion in assets. Setting up a company there takes just two weeks and $10,000, Foreign Policy notes, adding offshore companies now represent 5 per cent of the African country's gross domestic product.

Rick Westhead is a foreign affairs writer at the Star. He was based in India as the Star’s South Asia bureau chief from 2008 until 2011 and reports on international aid and development. Follow him on Twitter @rwesthead

Who are the world's richest people?

Mexico's Carlos Slim is pretty rich. (AP Photo/Dario Lopez-Mills, File)

Can't balance your cheque book? Want to get really depressed about your negative bank balance?

Why not check out Bloomberg's interactive ranking of the world's richest people. The news agency has put some thought into this ranking, listing the top 100 of the 1 per cent by country, gender, industry, ages and sources of wealth.

To find out who is worth what, all you have to do is scroll over the sketches of the billionaires faces. The graphic even links to relevant news stories.

Combined, the total wealth of the 100 billionaires is a cool $2.1 trillion.

So, who makes it to the top 5?

Mexican businessman Carlos Slim is first on the list at $73.2 billion, Microsoft's Bill Gates is second  at $72.9 billion, Warren Buffet is at $60.2 billion, Spanish fashion czar Amancio Ortega (the clothing firm Zara is one of his) is worth $57.3 billion and Ikea founder Ingvar Kamprad comes in at $56.5 billion.

Consequently numbers 6 and 7 are the politically conservative American brothers Charles and David Koch, who are both worth $45.4 billion each and are heavily interested in investing in American newspapers.

The only woman in the top 10 is Christy Walton, at number 9, who is worth $38.5 billion. She's the widow of John Walton, one of the sons of Sam Walton, the man who gave the world Walmart.

As for the Canadians on the list, there are only two -- media mogul David Thomson ranks 22nd with $25.1 billion and Galen Weston barely rounds out the top 100, coming in at number 90 with $11.6 billion.

Read it and weep.

Tanya Talaga is the Star's global economics reporter. Follow her on Twitter @tanyatalaga

Are countries that are better off, more or less tolerant about race?

A map based on data from from the World Values Survey composed by The Washington Post.

 A study published by a pair of Swedish economists in the scholarly publication Kyklos, has kicked up quite a stir on the Internet, trying to determine whether economically better-off nations are more racially tolerant.

Or not.

Well, that’s the scholarly language.

We in the media are a little more plain-spoken.

What we want to know is: who’s racist out there?

To help the Swedes in their study, they consulted the respected World Values Survey, a global network of research scientists from more than 100 countries who’ve been polling people around the world about values since 1981.

Turns out the survey had just the kind of question they were looking for:  Question A124_02 which asked respondents whether they’d prefer not to have “people of a different race” as neighbours.

The best illustration of the survey’s findings was published by the Washington Post using a kind of red states – blue states theme, blue being the most tolerant countries, and red the least (see above).

Some of the findings surprised: more than 70 per cent of respondents in Hong Kong as well as Bangladesh said they definitely did not want to have neighbours of a different race.

In Jordan 51.4 per cent and in India 43.5 per cent also said they wouldn’t tolerate neighbours of a different race.

The most tolerant? Sweden, where just 1.4 per cent of respondents said they would object, followed by Argentina, and Trinidad and Tobago , tied at 2 per cent, Europe’s tiny Andorra in third place at 2.5 and in fourth place Canada at 2.9 per cent.

The United States was fifth at 3.8 per cent, followed by Uruguay at 3.9 and New Zealand with 4.1 per cent.
Great Britain stood 12^th. But that didn’t prevent some British headline writers from trumpeting the Britons as champions. Whatever.

The long and short of the Swedish economists’ study? It turns out there is no co-relation between economics and racial tolerance.

However they did discover that there does appear to be one between better off nations and a greater tolerance for homosexuality.

Bill Schiller has held bureau postings for the Star in Johannesburg, Berlin, London and Beijing. He is a NNA and Amnesty International Award winner, and a Harvard Nieman Fellow from the class of '06. Follow him on Twitter @wschiller