Any Dividends Of Jonathan-Obama Meeting?

By Paul Arhewe , Online/Foreign Editor




LAST WEEK, Nigerian Acting President, Goodluck Jonathan, embarked on a four-day trip to Washington where he spent two days with other leaders from 47 countries in a Nuclear Security Summit organised by U.S. President Barrack Obama. He also had the opportunity to engage in a 15-minute chat with the American leader.
Comments from many quarters see this development as a significant impetus, which is a bolster on our hitherto passive relations to events at the international scene, especially as no remarkable meeting with renowned international leaders from the West was held by the administration of ailing President Umaru Yar’Adua.
Last Thursday, the Foreign Affairs Minister, Odein Ajumogobia, as he rightly acknowledge, the Jonathan trip to U.S. was very successful and would accrue immense benefits to Nigerians at home and those in diaspora. His words: “it was a very successful visit and I think it is important that Nigeria engages with the world again”. “I think we did so in a very open and successful way”. Jonathan in his trip had the opportunity to meet other America figures like Vice President Joe Biden, the World bank President, and was a special guest speaker at the Center for Global development (CGD) in Washington.
Though, many people are of the view that the time the Acting President spent in discussing with Obama was not enough to make a meaningful discuss, nevertheless the significance of the meeting is that more avenues and opportunities for Nigeria and the United States to cooperate in mutual economic, political and other basic areas of interest would continue to unfold.
Amusingly, a commentator in the Independent Newspapers website argued that “since President Yar’Adua was not availed the opportunity to meet Obama for a minute, Jonathan that was able to converse with him in 15 minutes, this indeed is an improvement”.
The U.S. and Nigeria share some traditional positive bilateral relations that are based on mutual efforts toward development and peace. Nigeria has played important role in regional and global peacekeeping exercises, a front-role in ensuring peace reign in Africa. Despite this great achievement the country has carved a niche for itself over the years in its foreign engagements, last year Obama visited some African countries, by-passed Nigeria and visited her neighbour Ghana. That event put pay to that fact that the Obama-led administration was not really moved in forming cordial ties with our then government under Yar’Adua, which Jonathan was deputising. Events, since his assumption in office have indicated that Yar’Adua is not favourably disposed to partaking at events in the international scene. This is displayed when last year he preferred to embark on a trip to Saudi Arabia to observe the inauguration of an education institution than attending a United Nations summit.
U.S.-Nigeria bilateral relation in past years especially during the military regimes had suffered strained ties. It was not until in July, 2006 that Nigerian airlines resumed direct flights to U.S. after a decade ban by America on direct flights between the two countries due to the excesses of the military rules in the 80s and 90s. Though, in terms of economic tie, there has been proportional growth over the years in economic ties between the two countries, when compared to what others foreign countries share with the African giant. U.S. has since taken over as the major importer of crude oil from Nigeria, where it is the fifth largest supplier of crude to the American country. For instance, according to Energy Department data in December 2009, U.S. bought about one million barrels of oil a day from Nigeria. As at last year, Nigeria was the 14th largest goods trading partner of the U.S. with $42.2 billion in two-way goods trade for 2008.
There abound many gains that would be accrued from the new-found wind in the sail of Nigeria-America relationship, from the offshoot of Jonathan’s four-day trip to U.S.
While on one hand, Jonathan has used the trip to stamp his authority and recognition of his administration by other country leaders, the visit of the Acting President to the Nuclear Security Summit indeed was an avenue to announce the comeback of Africa’s most populous country to happenings in the world arena.
The last year attempted Christmas Eve terror bombing on a Detroit-bound aircraft by a Nigerian youth, Umar Farouk Abdulmutallab, was indeed a big dent that culminated in straining the bilateral relations between the two countries. This did not only result in the enlisting of Nigeria in a terrorist watch list, but incurred a stiffen measures and checks against Nigerians travelling abroad, even a visa ban on our ministers to U.S. was threatened.
Jonathan’s visit to Washington, (even though the result should not be expected too sudden) no doubt would go a long way to make U.S. rethink its stance against Nigeria and propose to remove its name from country to be monitored against sponsoring terrorist, more especially as our Acting President has hinted the American leader of our progress with security measures in our international airports. Many analysts have emphasised on the economical effect of adding Nigeria to that terror list. In this regards, as U.S. reconsiders in lifting the blacklist on Nigeria, other Western countries would start to see her in a new light, and mete out fair treatments to Nigerians in their countries and engage her in positive bilateral relationships.
Obama has expressly shown his approval of Jonathan Acting Presidency, even before his recent trip to Washington. During the inauguration of Nigerian new Ambassador to U.S., Prof. Adebowale Adefuye, last month, the American leader declared his support for the ongoing reforms embarked by Jonathan with regards to strengthening democracy, improving the economy and restoring peace and security in Nigeria. Obama said “In this difficult time, we applaud Nigeria for taking steps to restore confidence in the country’s political system while adhering to democratic principles”.
“We are encouraged by Acting President Jonathan’s public promises to strengthen democratic reforms, improve the economic environment and address the ongoing violence and impunity seen in the Niger Delta and Jos”. “We look forward to supporting these efforts to improve the lives of all Nigerian citizens,” he said.
U.S., as the world leading democratic nation, is at the forefront in striving to sustain the democratic tenets in countries struggling in their embryonic democracies, like Nigeria.
In past decades, Nigeria has either had bones to grind with U.S. on issues pertaining to democracy, human rights, and corruption. Nigerian 2011 polls are now barely one year away, the U.S. has always joined other voices in calling for electoral reform and of recent joined in calling for the replacement of the incumbent Independent National Electoral Commission Chairman, Professor Maurice Iwu, who many have raised their voices against as a symbol for failed elections in the country.
Jonathan certainly, among his discuss with Obama would have touched on his administration proposed moves in ensuring a free and fair poll, and a cause for the world to believe his government is really out to make it right this time. The U.S. has always offered its support to ensuring that Nigeria next year’s elections are free and fair, and political institutions are strengthened to consolidate on our democracy.
No doubt, the gains from the Acting President’s visit to Washington have already started yielding early results. Last week, while Jonathan was having roundtable discussions with Obama and other world figures, Adefuye was hosted alongside with American Ambassador to Nigeria, Robin Renee Sanders, in the launch of U.S.-Nigeria Bi-national Commission by U.S. Secretary of State, Hillary Clinton.
The Bi-national Commission among other benefits would among other benefits, is a forum to strengthen the democratic institutions that are germane to hold free and fair elections in Nigeria, especially as 2011 polls draw near. The commission will also promote regional cooperation in the country and also encourage development in key areas, particularly in Niger Delta. It will support Nigeria in its fight against corruption, strengthen its democracy and civil society. And lastly, the commission would also support the country in ensuring food security and agricultural development.
The Bi-national Commission through its governance group will first prepare for Nigeria’s 2011 polls, and put in place $25 million food-security initiative that will focus on supporting the country’s agribusiness, farmer cooperatives, access to markets and work on staple crop yields, Sanders said. The commission “represents the future of this strategic dialogue and provides the framework for us to discuss these key areas we share with Nigeria,” she added.
Indeed, Jonathan’s invitation to stand shoulder to shoulder with his counterpart’s from other countries, even in his acting capacity, is a proof that his leadership in Africa’s populous state is accepted by world leaders. The World Bank last week also commended the positive leadership qualities Jonathan is putting forth in his acting capacity, and thus gives its support for more developmental projects for the country.
While more and more of this general acceptance is rushing in, it is then a challenge on the Acting President and his government not to let Nigerians down, and the eagle eyes of the world that is waiting to see positive changes. Even if these changes come in terms of improvement in electricity supply and electoral reforms that would usher in legitimate government that come through Nigerians votes in 2011, then Jonathan would have successfully engraved his name on a platter of gold; of which Nigerians would remain ever grateful.

U.S. Healthcare Overhaul Resultant Economic Spill-over Effects

Paul Arhewe, Online/Foreign Editor (with agency reports)

U.S. PRESIDENT Barack Obama was indeed a proud man having successfully won the nudge from Congress to sign the historical healthcare bill last week. The healthcare reform bill, estimated to have coverage for 95 per cent of America populace (over 32 million more Americans), marks a landmark and the biggest change in U.S. healthcare sector for decades. The bill was passed by 219 votes from democrats against 212 of Republican in U.S. House of Reps. No Republican supported the bill. The Republicans are of the view that the measures were too expensive to run and it makes government to take over the health industry. Obama successfully won more democrats cleverly, at the eleventh hour, assured the Americans that no federal money would be used for sponsoring abortion.

The economic implication of the world’s largest economy health overhaul would not only affect the American society but have a spill over effect to other economies of the world.
Millions of middle-income people in the American society would be forced to buy commercial health insurance policies; this which is expected to cost them 9.5 percent of their income would make insurance companies smiling to the banks.
Insurance companies would get at least $447 billion of taxpayer money to subsidise the purchase of their products. This would boost their financial and political power; where they would have great influence on future reform.

In two studies conducted by the Economic Policy Institute (EPI) their findings show that the U.S. health care reform measure would pay dividends for small businesses and other groups, and costs incurred by the American federal government would help reduce total health spending over time.

“Health Care Reform-Big Benefits for Small Business” explains the many ways in which small businesses will benefit from health care reforms. Only 35 percent of businesses employing fewer than 10 workers offer health insurance, and those that do usually pass on a higher share of the cost to workers than do larger businesses, the report says.

A key problem is that small businesses typically pay more for health insurance because of the way policies are sold. Reforms that would create more competition among insurers and reduce their administrative costs “would significantly reduce the cost small businesses incur providing health insurance,” EPI said.

The other study, “Seeing the Big Picture in Health Reform and Cost Containment,” shows why a federal government investment in health care reform could produce big savings in total costs over time and argues that cost analyses focusing strictly on the cost of health reform to the federal government are misguided

Fundamental health reform is worth doing even if it does not pay off in big federal budget savings. The reason is simple: Health care is an area where the more costs are loaded up on the federal government, the more efficiently care tends to be delivered overall.

That helps reduce total health spending over time, spending that is currently rising faster than gross domestic product, according to EPI.

Obama's proposal takes the more modest Senate bill as his basic framework. But, in what is perhaps his proposal's most notable feature, he scales back the Senate bill's main revenue source, a tax on high-cost insurance that he has strongly supported. Instead, he would impose a new tax on the unearned income of the wealthy.

He would expand subsidies to help working-class and middle-class families afford coverage. To win over some of the bill's strongest sceptics, seniors and state officials, he would expand the Medicare drug benefit for seniors and Medicaid assistance for budget-strapped states.

There is no independent cost estimate yet, but the proposal's additions drive its price tag higher than the Senate bill's $871 billion. White House health-care czar Nancy-Ann DeParle estimated the increase at $75 billion over 10 years, which she said would be offset by bigger cuts in subsidies for private insurers that offer Medicare Advantage plans and higher fees on drug companies, among other sources. By reining in Medicare, the proposal would still reduce the deficit by $100 billion over 10 years, the White House said.

The health reform, no doubt is a laudable project that would affect millions of lives, but those Americans opposing the successful passing of the bill cling their argument on the cost implication of the bill on U.S. economy, and the future increase in cost of health insurance middle-class Americans would be made to pay.

The economy is not the primary reason Americans oppose the bill, says Gallup's Newport.
Only five percent of Americans said they oppose the bill because it would cost government too much and increase the federal deficit.
“The No. 1 reason Americans say they oppose the bill is personal cost,” says Newport.
Of those opposed to the bill, 20 per cent say it will raise the cost of insurance, according to an earlier Gallup poll.
Almost as many people, 19 per cent, say the bill does not address real problems in healthcare. Eight percent of those polled said they don’t know how the system would work, while another eight per cent said they’re against big government controlling the bill.

It is estimated that beginning from 2014, American insurance firms will no longer be able to deny coverage to people with pre-existing conditions, a requirement that America’s Health Insurance Plans, the insurer trade association, has predicted will lead to an explosion in premiums because the legislation will not create universal coverage. In the early going, premiums are indeed predicted to rise to those who earn too much to merit government subsidies; but other individuals will see their premiums drop, according to the Congressional Budget Office. Moreover, as insurance companies get 32 million new customers, they will receive a tremendous infusion of cash that should enable them to reduce their prices.
When health plans have to compete for the business of individuals and small businesses in the insurance exchanges, they will have an additional incentive to moderate their premiums. In the long run, if insurance costs drop, more of the 23 million people (a third of them illegal immigrants) who remain uninsured will be able to afford coverage, and there will be less danger that people will buy it only after they get sick.

The bill requires that insurers provide a certain minimum level of benefits in the health insurance exchanges that individuals and small firms must use to buy coverage, beginning in 2014. That should help carriers because they can charge more for mandatory benefit packages than for the catastrophic plans that they often sell in the individual and small-group markets. Also, people who are now covered by their employers will be able to buy insurance through the exchanges if the actuarial value of their plans is less than 60 percent and/or their share of the premiums costs more than 9.8 percent of their income. While it’s unclear how many people will be affected, moving them from a low-benefit employer-provided plan to a higher-benefit individual plan purchased in an insurance exchange should also raise revenues for insurance companies.

There are some downsides for insurance companies: For one thing, the legislation will cut about $200 billion in government payments to Medicare Advantage plans. Those companies that are heavily involved in that market, such as Humana, will certainly feel the pinch. But as Medicare tries to find ways to pass financial risk onto providers, private insurers will be enlisted to help, because they know more about managed care than the government does.

As for the excise tax on so-called “Cadillac plans,” the final version of the bill has pared this down to predicted revenue of about $70 billion over 10 years. That’s a very small portion of health plan revenues and will be passed onto employers, in any event. And the $74 billion in other new taxes that will be levied on insurance companies to pay for reform is a rounding error compared to the size of the revenues they’ll get in the next decade.

So if this reform bill is so good for insurers, why have they opposed it, and why does the stock market view reform as bad for insurance companies? I think it’s because of short-term thinking: Instead of focusing on how the expansion of coverage will provide new business and shore up a rapidly eroding system, insurance executives and investors only see increased government regulation that will restrict the insurers’ freedom of action. They should rethink their position in light of the opportunities this legislation opens up.

It is germane to note that developing countries also stand to benefit from the massive cash flow the U.S. health overhaul would proffer. This health reform measure has opened new opportunity to outsourcing companies, especially has hospitals and Insurance companies would begin to seek ways in minimizing their expenses. The health care overhaul would likely bring bulk of new business from customer enrollment, customer service, and claims processing, as insurance becomes universally available to US citizens. Different outsourcing destinations such as the Philippines, India, Mexico, and China will probably be clamouring to get the lead in healthcare outsourcing; however, it is likely that those who will benefit the most from the bill are those that can offer onshore capabilities or those that are near shore, such as Mexico and Canada.

Some outsourcing companies in some developing countries have already began their strategizing to expand their network to U.S. following the passage of the health bill into law last week. According to Nasdaq and the Times of India, outsourcing firms such as Firstsource Solutions and WNS are now planning to increase their onshore presence in the U.S. to help them win contracts by expanding their relationships while maintaining potential clients at arm’s length, building trust. Other companies such as Genpact in the meantime, are looking for possible mergers and acquisitions with other companies so that they can broaden their expertise and take advantage of more business from the healthcare industry.
In Africa, South Africa’s outsourcing industry is really gaining ground as more and more multinational outsourcing companies are expanding their operations there. Also, in the continent insurance industry is consolidating fast and stands a chance to further boost its gain with effective competition this health reform from the world’s biggest economy tend to give.