Tuesday, 16 December 2014

Should the West soften stance on Russia?

Economics, it seems, is rarely top politicians' forte, evidently as much for what they do and don't do to promote  their countries, and arguably nowhere is this more obvious when politics is allowed to trump economics as in the current case of unpleasantness no afflicting the Ukraine. It is a sine qua non, or at least desirable, that the majority of people's wishes should take priority over the minority, provided the minority is not unduly disadvantaged, which is what happened when the Crimea overwhelmingly voted to prefer Russian enosis to closer EU relationships. The West voted the armed Russian help in this split as unlawful, apparently overlooking the illegal putsch in the Ukraine that sparked the brouhaha, but one wonders what they would have thought had, for example, the peoples of the Falklands and Gibraltar overwhelmingly voted for union with Argentina and Spain respectively without deference to Whitehall. Moreover, had Scotland decided to vote for independence without the UK's blessing and won would the West have viewed Britain's subsequent armed intervention as unlawful? To its credit Britain has agreed that if there were a majority vote in the Falklands and Gibraltar to join their former territorial owners Britain would not stand in their way, which is as it should be.

The West has now resigned itself to Crimea's secession from the Ukraine but could its resistance to any further secession from the Ukraine by the small, largely Russian-speaking eastern provinces be dangerously over reacting, given the obvious economic and political risks it poses to Russia, the EU and the wider world? It seems so.

It is to be hoped that the Ukraine will not see more lost territory from the east, because together they will be stronger and more prosperous but to achieve that desirable outcome both Russia and the West much be more accommodating. Russia, for its part, should withdraw all its overt and covert forces from the Russian-speaking eastern provinces in return for the Ukraine guaranteeing, with the UN, that there will be no reprisals and oppression of the ethnic Russians that could leave them oppressed. Both sides should also contribute to reconstruction costs with adequate outside loan help. The EU must also be wary over allowing closer ties with the Ukraine before that country has cleaned out its Augean stables of corruption, cronyism, debt welching and colossal economic mismanagement, which now sees the country in an unholy economic mess. It would also be sensible for the Ukraine to maintain good relations with both Russia and the EU and purge itself of fascist tendencies that are still evident in parts of the Ukraine's political establishment, in particular.

Russia, too, needs some stable cleaning in economic affairs. The West's sanctions are now beginning to bite seriously as Russia's economy moves into recession, prices rise, the Rouble plunges and unemployment worsens.Opinion polls may show that President Putin is still popular but rumbling bellies could soon change that. The falling oil price, however, will do even more harm than sanctions. About half of Russia's revenues derive from oil and gas and for every dollar fall in the global oil price Russia loses US$2 billion  a year if the fall is sustained. Now languishing at $60 a barrel from a multi-year average of $100, estimated oil revenue losses are $90 billion to $100 billion compared with only $40 billion from sanctions so far. It is not too fanciful to believe that oil will fall to below $50. What this exposes is the inherent weakness in Russia's economic management. Other than armaments, it produces very little manufactured goods and not enough agricultural output and the billions of dollars it earned when oil prices were high have been unwisely spent on multi-billion dollar fripperies like the Sochi Winter Olympics, instead of diversifying the economy.

Mickhail Fradkov, head of Russia's foreign intelligence service, has accused America of introducing sanctions and attacking the Rouble through manipulation of oil prices in order to oust Putin. On sanctions he has a point, but the oil price has always been volatile, despite the best efforts of the OPEC cartel. "No one wants to see a strong and independent Russia," he said. This, of course, is patent garbage, for anyone with the most basic grasp of elementary economics would know that the world has a strong interest in seeing Russia prosper, because the wider world would also benefit through more trade and trade is the handmaiden of prosperity and prosperity the surest guarantor of peace.

Fradkov's remarks may go down well with ordinary Russians but they are, nevertheless, potentially inflammatory and dangerous because a populace not grounded in elementary economics is unlikely to see through the crass vapourings of political mountebanks and toadies. This is just one, but critical example, why economics should be taught at all schools.

For Russia the pain can only get worse as the oil price continues to tumble, ramping up the risks of political instability. Reforming and rebalancing its economy to favour much more manufacturing is an urgent necessity to give the people what they really want, which is not, as in the days of ancient Rome, more costly games like the World Football cup matches in 2018. NATO and the West, for their part, should not make provocative moves on Russia's borders and the EU and global lenders of last resort should realize the economic lessons from the 1930s. When economies are placed under extreme pressure through sanctions and other circumstances events like the unrealistic war reparations imposed by the victors of Versailles on Germany, leading to the collapse of the Wiemar Republic and its hellish aftermath, could resurface in another devilish form.

The Western democracies have long cherished their desire to see democracy planted in Russia, just as at one time Russia tried to export its political ideologies to the World, almost to the point of sparking World War 3. Russia has given up on that path and the West should follow suite. Democracy will come to Russia as sure as day follows night but it must never be by outside interference.

Saturday, 22 November 2014

World's first "truly green" forklift unveiled

A collaboration between Honda and Briggs Equipment, Britain's largest forklift dealer, with Government financial backing, has produced the world's first "truly green" engine emissions that will not only save lives and misery from pulmonary and other killer diseases caused by NOx and other toxins but help the world to achieve its targets on global warming. The motive power project is unique for two reasons; a converted Yale forklift uses lithium-ion battery technology (80v) charged by a hydrogen fuel cell and secondly it uses hydrogen generated from solar power via an on site electrolyser rather than a conventional natural gas process. The project, developed at Honda's UK Swindon plant, is also innovative in that all this technology fits in a standard DIN size battery compartment.

Hydrogen fuel cells have been powering forklifts for a few years now and are especially finding favour among American big forklift fleet users. Their key advantage over lead-acid batteries is the longevity of the fuel cell, typically 10 years, their quick charging over a few minutes, compared with eight hours or more for lead-acid, the abolition of costly batteries and storage/changeover facilities in multi-shift operations, and no drop off with truck performance towards the end of shift as there is no voltage droop. Maintenance is also 1.5 times lower and the performance more or less on a par with other motive power fuels. One big drawback, however, was the pollution aspect, because while clean at the point of use it was not clean at the point of hydrogen production owing to the use of fossil fuels to make the hydrogen.

A Briggs spokesperson confirmed to this writer that this remarkable project is aimed at replacing lead-acid batteries, though diesel engines can be converted but the technology is only suitable for delivery vans owing to space constraints. Richard Close, Briggs Equipment CEO, said: "The project has proved what can be achieved. The challenge is now to extend this as widely as possible."

Although rightly hailed as a breakthrough as a proving ground for future development in emission-free forklift technology it is recognized that in its current form this process would not be viable for small fleets and would need the benefit of scale and further efficiencies to make it universally realistic. So what size forklift fleet is required to make this technology viable, this writer asked Briggs. The response was non committal on size but a spokesperson said: "If high purity hydrogen is available then all that is required is a suitable compressor to make the gas available for the fuel cell. We think that the first large scale commercial use will be at a big distribution centre, probably with some government grant assistance to get the project going." Nevertheless, said Briggs, "cost reduction will come with volume and that is linked to the availability of fuel."

This development may not be confined to industrial trucks. So far the project consortium has focused on creating a whole system from solar as its source to hydrogen as the output fuel to run vehicles -- converted vans running normal duty patterns -- as well as forklifts operating on site. The consortium intends to investigate hydrogen as a means to provide power to Honda's manufacturing plant in the future. If that process were extended to factories world-wide it would be one giant step for mankind in the struggle to clean up the planet. Meanwhile, Honda, Briggs and the British Government have earned a small but well-deserved bow.

Monday, 3 November 2014

Europe pays price for Ukraine's lousy governance

Getting others to pay for one's own sins has long and commonly been part of human nature but succeeding in palming off the sinful bill at national level is much more difficult and rarer. The latest example of a successful master stroke in financial chutzpah is the Ukraine's long-running refusal to pay Russia for gas that goes back over 18 months. It now owes Russia about $3 billion for unpaid gas that it says it has no money to pay owing to the money spent on the war against secessionists in the south-east. It may not have the money but the country owed $1.5 billion up to March this year before any hostilities broke out and so one must look for the real reasons for such insouciance. As explained in my blog, How to Contain Crimea's logistics threats, the Ukraine's economy is an unholy mess deeply mired in corruption and largely in the thrall of plutocratic oligarchs.That is the real reason for non payment and unless the Ukraine takes good governance to heart at all levels the canker within its society will continue to fester.

Russia, to its credit, has offered a new gas deal by cutting the gas price by $100 per thousand cubic metres to $378 by the end of this year and $365 in the first quarter of 2015, provided the $3 billion has been paid off first and that there should be an element of future payments in advance. The $100 price cut is according to a formula contained in the gas supply agreement dating back several years. The Ukraine reportedly said that at first it could not pay and would, if necessary, steal the gas from the pipeline that runs through its territory on its way to Europe. The Russian response, understandably, was a threat to cut off all supplies. Given that such action would seriously affect European consumers of Russian gas, sending prices soaring at a time when Europe is flirting with deflation, the EU felt over a barrel and so has now agreed to pay for the Ukraine's financial delinquency with some help from the IMF. The crisis has been averted, the Ukrainians will no longer risk death from the cold and in the circumstances Russia's deal has been generous and shown much forbearance towards a serious debt welcher.

But what are the bail out figures and implications for the rest of the EU struggling with sputtering economies burdened with dangerously high youth unemployment and a banking system under great strain? The EU will act as guarantor for Ukraine's gas purchases and helping to meet outstanding debts. The total package is worth $4.6 billion, with money coming from both the EU and the IMF. "Unprecedented levels of EU aid will be disbursed in a timely manner and the IMF has reassured the Ukraine that it can use all their financial means at its disposal to pay for gas," the European Commission said. The EU is also considering a further loan of 2 billion Euro. Doubtless much more will be needed to pay for the huge war damage costs.

The trouble with blackmail is that the blackmailer often comes back for more but if the victim (Europe) can reverse the role by resorting to its own threats then the unpleasantness is likely to come to an abrupt end. The EU should now impose its own conditions by pledging not to allow any moves to advance the Ukraine's interests in closer union with Europe until after the Ukraine has drastically overhauled its economy primarily through dint of good governance in politics and economics, and paid off any debts it may owe.

Much of the tragic trouble the Ukraine now faces in its south-eastern provinces, where there has been an overwhelming vote in favour of independence at local referendums in May, could have been avoided if there had been good governance in politics and economics that benefited all. It is to be hoped that the Ukraine will remain one united country rather than lose a region said to be worth one third of the country's GDP. Together they would be stronger and more prosperous. The Ukraine should also seek to improve trade relations with Russia. Trade, after all, is the handmaiden of prosperity and prosperity is the surest guarantor of peace.    

Thursday, 16 October 2014

Is outsourcing logistics worth it?

Time was when outsourcing one's logistics operations to a third party logistics (3PL) contractor was thought to be more costly than an efficiently run in-house operation. After all, there is the contractor's profit margin to add to all the usual running costs which did not exist before outsourcing. So why, then, did outsourcing catch on or was even tried in the fist place? In Britain, one key driver was the turbulent record in transport labour relations which left companies a hostage to fortune and so they were only too willing to break that mould by outsourcing. It worked in the sense that labour relations became much calmer. It caught on because most companies using their own in-house logistics solutions were not particularly super efficient in that function partly, perhaps, because they saw it as a side show distraction from their main function of manufacturing products.

Most 3PL contracts are for a minimum of five years and it is possible that costs within the first year could be higher than when the operation was run in-house. But as when choosing or renting new forklifts, the focus of attention should be on the life cycle costs over the five years, not the initial cost, but how does one know what those costs may be four or five years hence and how flexible will the 3PL be to meet wide fluctuations in demand for the clients' products?

The problems of costs and uncertain product demands can be eased at the contract negotiating stage, which admittedly is a highly complex business that demands great care. A key element in success is the degree of trust -- in the form of confidential information -- that customers must extend towards the contractor, which is immense. Without that gesture the contractor will not be able to provide an effective service. Secondly, the partnership should involve pro-active suggestions, agreeing and implementing efficiency savings which are tracked throughout the contract's life and the monetary benefits shared with the client on a fair basis. This is where probing of potential 3PL contractors is critically important. The winner of the contract should have a long-term track record of not only reliability but also be able to prove how good they are at making big savings for their existing clients. It would also be comforting to the client to know if the 3PL has a wide spread of warehouses strategically located nationwide as this would enhance the flexibility it could offer, partly through shared user facilities, which is so important to cope with seasonal fluctuations in demand or long-term changes caused by adverse moves in the economy.

A third caution which every outsourcer must never neglect is the financial stability of the potential 3PL contractor. Size is no guarantee of solidity. Back in the 1980s, the high-flying logistics operator, Rockwood Distribution, collapsed, leaving its clients with embarrassingly empty shop shelves and frantically having to find alternatives. Financial investigations into prospective 3PLs should never be left to just bankers' references. There are various formulae which can predict bankruptcy up to two years ahead, one of which, the Lis formula, named after its creator, Roman Lis of the Manchester Business School, is said to be 90% accurate, and that is close enough for Government work. It takes four key ratios from a company's annual accounts, each of which is multiplied by a certain coefficient and the sum of their products is then compared with a cut off point of 0.037. The more a company's result is above that cut-off point the sounder it is. Below, the amber lights start flashing.

If the choice of 3PL has been wise just what benefits can be expected? A good example among many is how the 60-year old British, family-owned business of Howard Tenens (HT) transformed the logistics of Costa Proud, which supplies its entire ingredients supply chain. During the initial 12 months of a five-year contract HT achieved a smooth implementation of both a new IT system and 3PL provider with no loss of service. Stock was centralised from nine locations to one. Stock availability reached 99.9% and there was a 50% cut in stock holding at partner sites. Delivery refusals fell by half and annual logistics costs by 30%. There were also considerable CO2 savings which is a key attraction to blue chip clients keen to establish their 'green' credentials. HT, in fact, leads the 3PL industry in having 88% of its heavy goods fleet over 18 tonnes with dual fuel capacity. It has invested in re-fuelling stations for both CNG and biomethane which are all open to third parties.

So, to the question is outsourcing worth it? the answer is a resounding yes, provided the partnership is truly pro-active and the choice has not been made on price alone as the dominant factor in an industry where competition has always been intense and so likely to see a 3PL's margins under extreme pressure.

Monday, 13 October 2014

Britain's food supply chains face grim times over price wars

Missing a favourite food item from one's usual UK supermarket is now more likely than ever to leave shoppers victims of an even harsher squeeze on food suppliers brought on by the intensifying price war between the food discounters and the four dominant supermarket chains. Losing market share to discount arrivistes like Aldi and Lidl, Tesco, with around 28% of the UK food market, are fighting back by squeezing suppliers not only on prices but also by numerous charges, including even for barcode changes and prominent display of products, along with the odious favourite of deliberate late payments that could easily bankrupt small supplier companies. Reportedly, there are almost 60 ways that supermarkets extract money from suppliers.

It has been a bullying practice long exercised by the big retailers and is symptomatic of a laissez-faire attitude of the Competition and Marketing Authority which took over responsibility from the Monopolies and Mergers Commission. In the past, any merger that would have meant control of 25% or more of the market would trigger a referral to competition authorities, yet Tesco currently has around 28% of the UK market, admittedly acquired through organic growth rather than by takeovers, but it nevertheless shows the unhealthy status quo where just four market leaders, Tesco, Asda, Sainsbury and Morrison control 76% of the British market. Such dominant control by a few retailers is also typical in mainland Europe.

For far too long the big four have exercised unhealthy control over Britain's food basket, leading to lack of competition and what at times must have seemed like a cosy cartel where price differences for identical products were derisory and special offers limited to only a handful of products for a very short period. Treating their customers as though they were addle-headed, supermarkets would uniformly push through steep price rises by significantly cutting the product weight but still maintaining the previous prices and the packaging size so as to disguise any real price rises.

In the past, the big four have sometimes acted in the shoppers' interests by resisting suppliers' price increases, ostensibly caused by commodity price rises, a practice that might have encouraged suppliers to introduce efficiencies. But it is clear that only if larger suppliers routinely stand against retailer demands for price cuts and charges will they succeed (albeit at the expense of smaller suppliers too weak to stand up for themselves) but at a risk of losing business through product delisting. Premier Foods reportedly lost £10 million in three months when Tesco delisted its Hovis, Mr Kipling and Oxo products three years ago. Tesco also, reported the Sunday Times, suspended 75 Princes' products, including baked beans and Cross & Blackwell soups. In denying their customers their favourite foods Tesco is insouciantly breaking the first law of marketing -- give the consumers what the consumers wants and not what Tesco thinks is best for them.

This is where consumer power, helped by social networks, can change the unhealthy status quo between oppressed food suppliers and the big four retailers. When shoppers cannot find their favourite foods at their usual supermarket they should put them under notice that they risk irretrievably losing their business to competitors. Better still, if they have not already done so, they should switch to the discounters like Aldi and Lidl who have no pressing interest in squeezing their suppliers and where prices are permanently lower than the big four by around 30%. This is important in one other sense. The big four will fight back and the only way to do so in a shopping environment that has seen a paradigm shift where price is king is by sharp, prolonged price cuts. That could hurt the discounters but they have one impressive weapon in their armoury that their rivals lack -- a smart logistics/business model. This model took Jack Cohen's (Tesco's founder) slogan of 'Pile them high and sell them cheap' one step further -- and sell them fast. The discounters' no frills shop displays and small car parks not only mean lower start up costs but crucially their limited 1,600 or so SKUs (stock keeping units) compared with the big four's 40,000 SKUs, are concentrated heavily on fast movers whereas much of the big four's stocks are slow movers, and money tied up in stock puts money to sleep, to the extent it could dwarf all other warehouse costs combined. It is a model that the big four may have to emulate to survive in reasonable shape and already there are signs of such a move. Sainsbury, for example, are joining forces with the Danish discounter, Netto, the first of the Continental discounters to set up in Britain some 20 or so years ago. Others are looking to cut back on their big store developments and concentrate instead on much smaller convenience stores.

The old Chinese curse of "May you live through interesting times" is about to fall on Britain's food retailing, but the risk is collateral damage to food supply chains, where pressures may lead to worse scandals over false food labelling, less consumer choice, and even human trafficking, oppression and slavery in the supply chains.

Thursday, 18 September 2014

Forklift training could save billions of pounds

It is well known that adequate forklift training brings quick returns through lower accident and damage costs to racking, trucks, stored goods and less business disruption/losses but how many operators know that good training can prevent sting-in-the-tail cost shocks when long-term contract hire agreements end? In Britain the issue is particularly important because contract hire accounts for about 65-70% of all trucks supplied.

The disturbing fact remains that despite stringent safety legislation and all efforts by truck makers to improve their truck safety and ergonomics, accidents remain woefully high along with ignorance among supervisors tasked with the job of enforcing best safety practice. According to one of Britain's leading forklift training outfits, Mentor, more than half of managers they meet have never driven a forklift or received any kind of truck training and up to 90% are woefully ignorant of their legal responsibilities for safe truck operation and the consequences of an accident that results in prosecution. Little wonder, then, that there is still much room for safety improvement.

There are, of course, many causes of forklift accidents, which in Britain is the largest, single combined cause of major and over 3-day injuries regarding workplace transport. Disturbingly, many are related to a company's perception of a trade-off between safe practice and the need to meet delivery schedules, compounded by fear-fuelled, staff reluctance over whistle blowing. Even among blue chip companies there is a resignation that accidents are part of doing business. One such British company, for example, routinely forks out £3 million a year for pallet racking damage. Others often tolerate high loading bay door damage caused by truck collisions, typically running in to the high thousands of pounds every year.

A clue to the sting-in-the-tail costs at hire contract expiry is the lax attitude to good housekeeping practices. Poorly maintained and cleaned floors riddled with potholes and crumbling joints raise truck maintenance costs, and in very narrow aisle (VNA) operations even incur racking damage costs, in particular. Poor lighting also features significantly in the accident toll. Such costs are normally budgeted for but the sting-in-the-tail costs are not. When a truck is returned to its supplier at the end of a hire contract a detailed inspection will normally be carried out. Provided a truck needs no more than a lick of paint and a normal service to make it suitable for onward hire there should be no contract termination costs. The one exception could be the exceeding of hours used clause in the hire contract. This issue can be avoided if care is taken to define 'hours of usage' and extra agreed cost for such excess at the beginning of contract negotiations.

It is estimated that these contract expiry costs of this nature are equal to 5% of the total hire cost for a 5-year contract, though not all forklift suppliers levy them. In one sense it is easy to see why. A nick in a driver's seat would mean a new seat costing at least £400. A damaged overhead guard could run into thousands. There is doubtless an element of cost padding in these charges, too, partly because truck suppliers are anxious to encourage customers to renew their hire contracts and for this they will promise to forgo these remedial costs entirely if the client renews the contract. Succumbing to this thinly disguised form of blackmail by renewing on these terms could be a far costlier mistake because it may be possible to get a much better deal with a different truck supplier, especially if switching from counterbalance and reach trucks to articulated forklifts.

A back-of-the-envelope exercise, based on a UK national truck population of 350,000, with 65% under hire, shows if that 5% sting-in-tail cost could be entirely avoided the annual UK savings would run into hundreds of millions of pounds. Add in the many millions more from accidental damage, injuries and business disruption/losses then the need and urgency for a robust truck training regime is blindingly obvious. Perhaps just one example will suffice to convince the doubters and chancers. One UK retail company paid Mentor £50,000 for a training scheme. The result was savings of £130,000 every year. Blindingly obvious or not, there seems to be too many purblind safety enforcers.

Tuesday, 16 September 2014

Can Mediterranean's tragic migrant harvest be stemmed?

Scarcely a day passes in the Mediterranean's calm season without illegal migrants landing on Italy's shores, having trekked from far-flung African countries and, latterly, the Middle East, exacerbated  by the political upheavals in that much vexed region. This human tide has now reached crisis levels on several fronts, including the tragic loss of life at sea and the implications throughout Europe for harmonious development and relations.

The latest migrant tragedy occurred on September 15th when more than 160 African illegal migrants bound for Italy perished when their overloaded vessel capsized off Libya's coast, but details are emerging of a far greater tragedy a few days earlier where the death toll could be 500. According to a few survivors the indications are that it was mass murder at the hands of traffickers who wanted to move some migrants to a smaller boat while at sea. Incensed by the migrants' refusal to comply, the traffickers deliberately rammed and sunk the overcrowded vessel.

                                                 Broken heart

One of the hundreds of migrants who drowned was a young Egyptian boy who had hoped to earn enough money in Europe to pay for his father's heart operation, said one Palestinian survivor, who watched the boy finally slip beneath the waves from a life buoy, overcome by exposure and hypothermia. Now his father will have two broken hearts. If confirmed, this will mean total migrant fatalities at sea will have reached about 3,000 so far this year, up from 1,500 in 2011. The total tally since 1988 is over 20,000 adults and children, according to Fortress Europe, which tracks the Mediterranean fatalities.

In the long march of everyman mass migration has been a recurring theme and, on the whole, a necessary precursor for benign development. European countries, in particular, have benefited enormously over the centuries from immigration waves that enriched the gene pool and hastened economic development but can it be legitimately claimed today, when circumstances are dramatically different, that further substantial waves are in Europe's best long-term interests and if not what, if anything, can be done to deny the Mediterranean its growing graveyard status?

On the remedial front, Italy's foreign minister, Emma Bonino, is not sanguine for a solution. She reportedly said: "There is no miraculous solution to the migrant exodus issue. If there were we would have found it and put it into action." To give Italy its due the country has borne the brunt of the exodus from North Africa, with scant help from elsewhere for what is a Euro-wide problem, and has tried various attempts at repatriation, having saved more than 100,000 boat people since last October when it launched a humanitarian effort called Mare Nostrum to intercept and rescue the migrants trying to reach the islands of Lampedusa and Sicily, the nearest landfall to North Africa. Italy has been criticised by the human rights body, Council for Europe, for being ill-prepared for a new surge of mixed migration on its coasts, claiming that its system for receiving and processing migrants and asylum seekers was not fit for purpose. All would argue, however, that the best place to deal with the problem would be at the migrant's last point of departure, and today that largely means Libya.

                                             Target the traffickers

Between 2008 and 2010 Libya received 60 million Euro for sending over Italian police to Tripoli to link up with their local counterparts, which also included six patrol boats, vehicles and training. This meant that migrants intercepted at sea by Italian and Libyan patrol boats were immediately landed back in Libya but it turned into a public relations disaster as Libyan security forces began beating vociferous migrants and herded them into containers for transport to one of 20 detention centres scattered around the country before being sent back to their original countries. Given that since Gadaffi's overthrow Libya has sunk into lawlessness, any such cooperation would be impossible under current conditions. However, serious consideration should be given to funding covert operations to infiltrate trafficking gangs operating along the entire North African coast and perhaps elsewhere to alert authorities when illegal operations are about to begin. While it is possible that solo migrants could make it to Europe and thus avoid the ruthless gangs, the vast majority of migrants would prefer to spend thousands of pounds with the traffickers. If their operations could be destroyed, with draconian sentences for the guilty, it could go a significant way to stemming the tide. Such a scheme would have to be funded by all EU nations.

Other possible solutions are of a long-term nature. If the EU wants to reduce the migratory pressure it will have to provide more development aid, debt relief and fair trade that would see non European agricultural produce, in particular, less discriminated against. There are signs, at last, that Africa's economic development is gathering pace from a position where it was long considered an economic basket case held back by ubiquitous corruption at all levels of society, not to mention fratricidal tribal hatreds. Such growing GDP, in theory, should relieve the desire to migrate to Europe but is unlikely to have much impact unless effective population control measures are in place. If a a nation's GDP rises by, say, 5% per year while population growth is higher than that then incomes per capita will fall and so the temptation for families to encourage their children to emigrate to Europe will remain as strong as ever.

                                     A distasteful trade off?

There is a body of opinion that suggest Europe should take in far more immigrants than it does presently because indigenous European populations, particularly in France, Italy, Holland and Germany are declining to a level that will see too few working people burdened with supporting an ageing population. According to one estimate, Europe is expected to lose 28% of its population by 2050. Such purblind beliefs, however, betray faulty elements of Malthusian doctrine. Like many economists his analysis was correct but the assumptions on which it was based were flawed. Malthus could not foresee the impact on food production that improving agricultural techniques would have and the opening up of vast agricultural lands in the New World to support a growing European population. Could it not be equally said that the population 'experts' forecasts will prove equally unsound because science does not stand still. Robots and other forms of automation will dramatically raise productivity and release labour for rechannelling into social care occupations to support a growing, ageing population. The next 50 years will also likely see stupendous medical science breakthroughs that through a combination of eliminating debilitating ailments that come with ageing and the arresting of the ageing process itself will allow workers to work much longer.

Distasteful though it may seem to maintain, if not strengthen border controls against illegal immigrants, most of whom are unskilled, economic migrants, it is a question of a trade off between the lower level of misery from migrants still pushing on Europe's doors and the potential for much greater misery within Europe that most assuredly would arise if immigration controls were relaxed substantially. The signs are already blowing in the wind. Country after country within Europe is moving ominously to the right, fuelled largely by people's concerns over immigration issues that are now clearly showing signs of harming social services and raising social costs. Even legal immigrants now settled in Europe and contributing a net benefit to society express fears over the potential of immigration issues to destabilise their countries' social harmony. If that tragic scenario unfolded would it not dwarf qualms over maintaining robust border controls?