Thank you very much. Let me commend the three presenters for the insightful presentation. And listening and also reading the presentation takes me back to the 90s, first year university. The question is growth necessary condition for development. And I realize that we're still going back to development economics. That is the basis that we learned in high school and secondary school. And I think I will take my response from Andes World to New Medals that tries to talk about countries moving from LIC to MIC and putting them into four different groups. And coming from Africa, I think I may want to go a bit back home and then try to dig deep into what those MIC mean to some countries. Of course, growth has been quite strong in all these countries including those in SSA and poverty has also been reduced. So it's quite difficult to disagree with the fact that these countries have moved from LIC to MIC especially when we are using per capita income as the base. However, many of these countries cannot be seen as getting closer to development. We talk about China, we talk about South Korea. You look at their movement, it's not quite different from what OECD countries are having but if you go back to SSA, you realize that these countries are MIC you can call it lower middle income or CEDO MIC, YASIL MIC. However, do they have characteristics that can make them qualify to be countries classified as MIC strictly in that sense. Now, you look at some of these countries and they moved from LIC to MIC overnight. And I will give you Nigeria's example. Nigeria rebased and now it's supposed to be the biggest economy in Africa. And you compare Nigeria, the characteristics of the economy, the features of the labour market and so on, you compare to Africa, you see that they are totally different. So we look at Nigeria as the biggest economy but do we consider Nigeria as MIC in its present? Ghana, the same way, 2006 we rebased and then we moved to MIC and politicians were duplicating. However, we go deep into the citizens and then you see that we are still where we were 30 years back. So we look at how we measure the MIC to be able to know whether we are talking about development. Now, most of these countries too have also transformed in some sense because the backbone of these countries were agriculture but now we've moved to service. And somebody can say, well, we've transformed. However, there's also a missing middle and that must also be looked at as we move on because I always say the service sector is supposed to support the productive sectors. So if these countries are having the service sector being bigger than the productive sector then perhaps these countries are suffering from a disease called elephantiatis where they have parts, maybe the lower part of their leg being bigger than the upper part. Which is a problem which needs to be looked at as we try to look at developing these countries and of course the SDGs as Amelia also talked about. Now, most of these countries have also, the growth have also been driven by minerals. You talk about Zambia, you talk about Ghana, you talk about Nigeria and these countries are able to move faster to cross the thousand dollar per capita because of oil. Of course Ghana was supposed to be one of the fastest growing economies in 2011 of 15% because the oil entered the national account and you can see that well per capita income is very high but it has been driven by this. However, manufacturing which is supposed to create that kind of employment is not there. Manufacturing continues to go down and you can talk about Nigeria, you can talk about Zambia, you can talk about all these countries and we need to interrogate this as well. Indeed poverty has declined and we don't have any problem to doubt that somebody will say well growth is inclusive. However, we have a number of challenges in these countries that are supposed to be SIDU, MIC. Employment is quite vulnerable. Wage employment in manufacturing is going down. We have informality being high. Inequality is something that we are battling with. We're talking about problem with urbanization and housing problem. Many people are having a problem with housing, access to sanitation. We're talking about weak infrastructure as well. So just talking about MIC of these countries we need to go deeper into it. Especially when you graduate from LIC to MIC you have a challenge of getting it and therefore you have to go to the Eurobond market to be able to get some kind of support and I was thinking that is where these countries need some kind of support to be able to improve their infrastructure. In answering Andrew's hypothesis that there's export led growth determining everything and from a minute's conclusion of trade as catalyst to long-term development I would say the answer depends. I would say it depends because some countries are doing well and if I take it from Vladimir's argument that countries are doing well but there are some kind of stress that comes out of mortality through unemployment and so on then we need to look at it as important issues to interrogate. I would say that what are the institutional arrangements that will enforce the laws to be able to make these countries also push? Lessons for development economics. I have just about three or four questions that I'm posing. So are we saying that we are repackaging the old kind of development theory and calling it inclusive growth? So we have to see whether the old thing that we are doing however we are calling it inclusive growth these days. What's the role of institutions? What is the role of culture and religion in our discourse? Because many people are stressed out in terms of inequality and poverty so they resort to religion to be able to get some kind of comfort. So what role does religion and of course culture play in this discourse as well? Governance system. Democracy versus authoritarian system. Economic system too must also be looked at. Conflict or control economic system versus market system. And may I pose this question? That's location matter. If you're talking about those pseudo kind of MICs most of them are in SSE. And if these countries are quite far from the developed world one can say that South Korea, China, they are quite close to Japan and therefore that can also be one of the facts that move them quite faster. Then we need to look at location as well. Thank you. Thank you very much William. Also congratulations for staying on time. We have now time for questions. Please indicate your name and the institutions you are whether you address your question to Amelie, Vladimir and Lee. I think also William because he made also a number of substantive questions. You may want to sit here behind the table because the PowerPoint is finished. So just grab a chair over there and join us at the table. So I look at the room. I see one hand over there. My name is Mansub Moshev. Yes, for the camera. I can't outdo the performances we had. My name is Mansub Moshev from the Institute of Social Studies part of the Erasmus University Rotterdam. I have three sort of many questions to the three presenters. The first one is instead of going back to the future if we went forward to the past, I mean 50 years ago many of these countries which have acquired middle income status have actually gone back to the past because at the time of particularly the countries in transition are either from sub-Saharan Africa or from Asia. And 50 years ago a lot of these sub-Saharan African countries would have been the counterpart of middle income countries. The trouble is in many cases they declined because of 25 years of low or negative growth. So they had made a transition. They had made an earlier downward transition and now they have gone back up. This is not true I think for the South Asian countries in the sample. And to Amelia I just wondered, I always am confused about the least developed country definition but it seems to me a little bit clearer now that it sort of overlaps with the low income countries to a certain extent. So how do we, is it per capita income how do we arrive at that? And for Vladimir could you please just a little bit expand upon the last point you made which was about the institutional differences between Russia and China. And your concluding remark was there's something Latin America about Russian institutions that I was totally confused I would like you to expand on that. Thank you. On the last point I was in the seminary in Russia just after the fall of the building wall and I presented some of the adjustment experiences in Latin America and my counterparts didn't want to listen to me because he said you cannot compare Russia to Latin America it would be much better. So why you come up with all these countries? I wanted to explain what they could have done better taking into account some good questions. You were, yeah? And then the gentleman there. Thank you. Back by? I don't have to stand. I'm at the front, right? Yeah, you can. Well, you can stand. Then that's always a little bit cameraman. Thank you, thank you. Okay, so my name is Alyssa DiCaprio I'm from Asian Development Bank and my question is actually to everybody but it comes from a point that Emilia brought up which is the role of ICT. And so you know this is something that we've been thinking about is the role of e-commerce and ICT infrastructure for pushing development forward in a sort of non-traditional way, right? Because we've always focused on infrastructure but what about information infrastructure? This matters particularly for trade costs in distant countries, small islands, landlocked states. We think it can have a huge impact but I was just wondering what the opinion was with the different panelists. Thank you. I'm Mikko Berger from the University of Tampere, Finland. I address my question to Professor Poppo. It's a quite a broad one. Going back to late 1980s or early 1990s so I want to ask it touches about the institutional differences between Russia and China. Why China? I wonder if you can find some key differences between China and Russia. Why China managed to remain its stability and started to reform its governance and why Russia ended to the shocking collapse of its state capacity? Quite a broad one, but just to touch. I'm Ita Manatoko from Botswana. My question really relates to the fact that a lot of us in Africa are really looking for ideas on how to map things going forward. Mapping the way forward for Africa is of interest to us. There was a relation to trade and aid issues. The playing field has changed with the global crisis. A lot of resources which would have gone to development aid are now financing EU and IMF bailouts. On the trade side, we are now in a scenario where in the West, agricultural subsidies and non-tariff barriers are going up. So where Africa some years back might have thought that a way forward to have equitable growth would be through promoting agriculture, there are now barriers coming up in that arena. Community prices are going down. So it's really a challenging phase going forward. So if there are any ideas, even on how science technology innovations could be used to help Africa find new paths, that would be great. Hi, my name is Kristina Karinlahti. I'm from the Central Bank of Finland. And my question is to all of you on an issue that wasn't mentioned today, which is of interest, is the demographic shifts in the global economy and their effects, especially for Asian countries, European countries, developed countries and then to Africa. If you could please comment on that. Thanks. Thank you. My name is Tru Shedvin. I'm from CEDA, the Swedish International Development Corporation Agency. I just had two questions. One on structural transformation. And I was happy, William, that you brought up the service sector and the increasing service sector and also linking it to the rest of the economy and the patterns that we're seeing. And I hear during these days that we say that there is no structural transformation, but is there no structural transformation? Is it just following another pattern than what it did before and that we need to recognize and that we need to understand better? That was question number one. And then the other one, of course, we are looking at GDP and we are still categorizing countries according to the size of GDP in low income and middle income, et cetera. But given the size of the informal economies in these economies and countries, is this still such a relevant measurement? And how can we capture the informal economy better to understand the actual size of these economies? Thanks. Okay, thank you very much. Given the time I've closed now the questions, we had a number of very relevant and interesting questions, questions relating to the decline rather than some middle income countries, LDC differentiation, difference between Russia and China in institutions, two people asked about technological differentiation and technological progress. Then the question on the global crisis and the trade relates to agricultural subsidies, demographic shifts, and then the important question also, what is actually structural transformation about it? Is it a Lewisian thing, activity going from agriculture to manufacturing to services? Or if the economy shifts to services, could we also label that as structural transformation given that the nature of service is so wide and going from very low quality services to very high-quality service. And then also a question about the GDP and the informal economy, and I know William has done a lot of work with that, so I think this question will not fall flat here. I'm looking at time. Can I ask you to answer the questions very briefly? Two, two and a half minutes maximum. And I think we go in the same order as the presentations. Can I show a slide? Yes, maybe, because... If you have access to it easily, because otherwise... Otherwise I ask maybe Andy already to answer the question and then Poppo first time to find his slide. Lots of good points. The thing I've noticed, as I get older, I seem to read older books, and there seems to be a direct relationship between the more you... But it's not just books, it's papers and you go back into archives and all sorts of things. And actually a lot of the issues we're talking about were the things exactly that Arthur Lewis duddley sears especially, and even Simon Kuznetz and others were talking about, you know, just before, the 10 or 20 years before Wyden was established. So I think, I mean, in terms of these issues, there's a lot to go back to, the difference being for most developing countries, aid is far less important than it was 30 years ago. The countries are at much higher levels of income, which is not a good measure of development, but it does... It is a proxy for... It's some kind of proxy for more domestic resources being available. I think in terms of... I mean, just to respond to some other points, on the issues of the bounce backs, you're entirely right. I mean, a lot of countries don't... You know, growth periods go in spurts.  We certainly can identify after the event things that have happened, but we can also look at countries that weren't expected to grow and then suddenly grow. So, I mean, you're entirely right in one sense that it's not sort of linear, but hopefully, certainly for the big and populous countries, it seems to have been an upward turn. I think there's... I mean, on the ICTs, I think there's an interesting point here that even for the better off developing countries, commercial lending rates on 10-year treasury bonds are still around 10%, whereas the EU or, you know, World Bank can borrow whatever, 0.2% on something. There's a very interesting argument for long-run commercial lending, I think. I mean, you're talking about infrastructure and infrastructure around an ICTs, and it may be quite difficult for even better off developing countries to find the fiscal space when they have a multitude of demands to put money into things that may not seem so urgent, but actually today or even in five years' time will be very urgent. So, I think that the case for more long-run infrastructure type lending is very significant. On the different kinds of structural transformation, again, you know, going back to Sears and the limitations of the special case, the ways we could look at this. I mean, it really comes down to almost, I mean, as Sears said elsewhere, not looking at one indicator, like GDP per capita, but looking at a range of indicators of what's happening to poverty and employment, although, you know, some of those figures can be contentious. I think if anything, something like the proportion of the labour force in agriculture gives you a pretty good sense of what the country, the level of development, or the tax revenues over GDP gives you a sense of the strength of the state. So, it might depend. The kind of indicator you want to look at might depend on what you're looking for. If you're trying to say something about governance, then I'd probably look at tax data because of the relationship between the type of tax base a country has. I think Louis, sorry, I think Dudley Sears made, you know, in the limitations of the special case, there's a whole, there's 15 or 20 things that he suggested around structural change, which obviously, you know, same time that Arthur Lewis was writing. And then I think the only other point I'd probably make is about the world's poorest countries. There are surprising amounts of resources locked up in fossil fuel subsidies. And when I looked, I did the data in a new book, I actually found that even at $2.50, if you reallocated the resources that are currently locked in fossil fuel subsidies into poverty transfers, cash transfers to the poor, you'd actually cover three-quarters of the world's poor. Now obviously for developing countries the reallocation of a subsidy benefit that benefits car drivers and the urban elites towards the rural poor is really tough. So there's an interesting argument there about how you help governments reallocate resources. We included in the calculation actually a complete compensation for the poor because the poor benefit from kerosene subsidies. So we actually, it's largely based on petroleum, take a country like Sudan, 80% of Sudan's poverty, 80% of Sudan's poverty at $2.50 is technically coverable in Sudan's fossil fuel subsidies. And that probably brings you back to issues around governance and democracy. Okay, thank you for cutting your short, but there are other people later in the day. Vladimir, you slide it up, so thank you so much. Yes, I put the slide on the screen because I'm afraid I won't be able to make all the arguments so maybe it will be helpful to follow. Now answering Mansrub's question, the reason, if you take developing countries today, there are two groups of developing countries looking at indicators of the state institutional capacity such as murder rate, shadow economy, and you know there are indices of institutional capacity by the World Bank, there are six of them, I can go deeper into it, but basically they show you the same picture. The picture is this one, there is Latin America, Sub-Saharan Africa, and former Soviet Union, at least part of the former Soviet Union, Ukraine, Russia, Baltic states, Kazakhstan. Then you have murder rates of 10, 20, 30, per 100,000 of inhabitants, like in Latin America, like in Sub-Saharan Africa. You take South Asia, Southeast Asia, South Asia, and many countries, Middle East and North Africa, one, two, three, it's not, you know, 10% difference, it's times, order, the order of magnitude, one, two, three murders per 100,000 of inhabitants, right? Why it is the case? The institutional routes are different, since the 16th century. The 16th century, the West starts to get rich, gets out of the Malthusian trap. Developing countries imitate some of them, imitate the development of the West, Latin America, Russia, westernization, either conscious westernization, or because of colonialism, forced colonization, right? When they imitate the exit from the Malthusian trap, the inequality increases, right? They get all the results of the enclosure policy with the vagabonds and the, you know, poverty and mass, deprivation of the masses, but the savings rate rises and they start to develop faster. Latin America develops, MENA and East Asia and South Asia are at the same level, $500 per capita, right? They did this level until 1950, right? Now, in 1950, there are small changes in productivity going on and savings rate gradually increases. Once they start to increase, they have low inequality and with low inequality, they don't undermine institutions. They retain collectivist institutions, which prohibit the increase, high increasing in quality. So the institutions, judging by the indicators like moderate and shadow economy, remain pretty strong and they have the advantage and that's why they take off. They were behind Latin America and behind Russia, but now they take off and get caught. So this is a general scheme, yes, that why you compare Russia with Latin America? Well, what else? It's very close comparison, very close, yes? I think Latin America and Russia are very close together. GDP per capita is the same. High income inequality, if you look at Russia before revolution and today after the revolution, the inequalities are pretty much comparable. Russia has a genie of over 40 and it doesn't take into account all the inequality because if you look at the billionaires, there is a chart on the billionaires. Can I show you? I'll say it in words. The billionaire intensity of the Russian GDP, the oligarch intensity as we call it, the wealth of the billionaires divided by GDP is the highest in the world, right? If you count the billionaires from the Forbes list, China is below the regression line. Russia is way higher than the regression line. And if I can briefly answer the question from the gentleman from the University of Helsinki, there are three reasons, I would say, China and Russia. The first one is that centrally planned economy works worse than the market economy, but it works for 25 years. Why for 25 years? I'll explain it in a moment if I'll have time. The second reason, I don't explain it, I don't explain it, I go to the second reason. I do it, because you told me. The second reason is that it was a choice of policy. Gorbachev tried to do gradual reforms, he had. So China started transition after 25 years of centrally planned economy. Russia should have started transition in 1960 during crucial. And if Russia would make this transition, the highest point of Russian GDP to western GDP was 1965. Since Russia was catching up, catching up, the first countries were catching up together with Japan. Then there were other countries, but first it was Russia, right? And after that, it stopped catching up, it started to get behind. The second reason was the pace of transition, gradualism is better, and the third reason, ability to retain the strong state institutions. Okay, thank you. Amelia? I'll get the mic. That's a good question, Manso, because we get it all the time. It's not evident how this criteria is determined. Basically, it's a mix of three criteria. One is the income, it's gross national income. So the number for inclusion is $1,035. That's the same as the drink mic line. Exactly. So it overlaps with basically the income criteria. Then comes the human asset criteria and the economic vulnerability index. So the Committee for Development Policy of the Economic and Social Council of the UN is informed based on this composite index mixing these three categories. What happens in the long medium term is that some countries achieved, for example, the threshold to exit the category, you have Angola. Angola didn't want to graduate from the LDC category, but we are talking about $5,000 per capita income. But based on other issues, they claimed that they were not ready to graduate. But there are thresholds to graduate from the category, and it's a political process because you have to ensure a smooth transition out of the category into middle income status. So it's a composite index, but having said that, it's very heterogeneous. And when you think about policy formulation, it's very difficult to put all these countries, they're all producers in one box, with Bangladesh exporting textile and with the small islands. We have no base for diversification. We have countries like Kirivas with 1,000 people population. So to design a policy mix for these countries is very challenging. And that takes me to the point of Alisa about ICT. You have not only small islands that are LDCs, but you have landlocked countries that are LDCs. And at the same time, they are transit countries for other developing countries and lead developed countries. So when you think about infrastructure, you cannot think about only the bridge, the roads and the traditional development banks type of infrastructure, but the role that the new technologies in ICT can bring about to these countries, especially in services. And finally, about trade finance, there is a lot of discussion about this 8-4 trade, whether it's repackaging or not. It's a repackaging of official development assistance with a new name managed in Geneva. And it's based in the intersection between the trade regime because it's hosted at the WTO and the development agenda. So I think that has to be challenged and also the way, and again, Alisa is here, citing an article that she just published, the way that trade economies think about trade finance in a traditional way, linked only with ODA. But also we have to think about other commercial sources of how to fund exports in these developed countries and developing countries in general. Thank you very much. So I give you the floor. Yes, thank you. Well, I think the question about whether I move from agriculture to service is transformation. You can define transformation the way you want. But what do you want to achieve? If you are talking about transformation, that will improve livelihood of the people. Then you have to know where the livelihood improvement will come from. So if you look at most of these countries where service is now the leading, which area of service are we talking about? We're talking about telecommunication. We are talking about trade, which just create employment for the external countries. And we are talking about finance. And what kind of financial services are we talking about? Giving some kind of credit to trade and so on. So if you do this, then you neglect the productive sectors, which is manufacturing and agriculture, which is supposed to create employment for majority of the people to be able to improve their livelihood. Then your transformation will not benefit the people. So that, for me, my understanding is that to be able to... for transformation to benefit the people, it must move into areas that will give them sustainable kind of income. That is why moving from agriculture to manufacturing before you move to service is the way to go. And of course, classifying economies by per capita income. I intend to agree with people who conclude that we cannot just use the per capita income as a way of telling the country that they are MIC or LIC. For instance, you come to Africa, economic activity, the underground economic activity, which we may call the informal, is quite strong. Many people engaged in economic activity don't actually come to the market. For instance, we have a farmer who goes to the farm and gets everything and just consumes. So it's not be captured. So in that instant, you may underestimate the GDP. Apart from that, you also look at GDP coming from other areas. In Ghana, we have the oil that pushed GDP. But the benefit to the country was just about 3% or 5%. And are you saying that we are MIC and therefore it is going to benefit the people? So that is something that we need to look at. How do we measure these indicators? Even if you talk about joblessness and unemployment, you go to these countries, unemployment is sometimes about 5%. It is because of the way the concept is generated. And I think it is important that we look at some of these indicators and contextualize it within the countries. Okay. Thank you very much. Thank all the speakers, public. We stayed more or less on time. So thank you very much.


Good afternoon Howard Whig, Code Green, Think Tech, Hawaii. Do we have a spectacular program this afternoon? Intelligent plug loads. What could be more scintillating? And to lead us in this discussion is Kevin Howes, the COO, or COO, that's not a bird, of, wait a minute, bird ibis, okay. Ibis networks of Hawaii. And just very briefly, in my layman's terms, before you get delused by Kevin, if you looked at the energy use profile of a commercial building, say just 20 years ago, it would be dominated by lighting and air conditioning. If you had an energy use pie, those would be two huge slices. And then everything other would be this small slice. Well, that pie is looking very, very different today because you've heard me talk about LEDs. The LEDs are shrinking, that lighting load down, down, down, down, down, while delivering better lighting. And air conditioning is becoming much more efficient. So that part of the pie is shrinking also. But guess what's becoming bigger and bigger and bigger? Plugloads go into any typical office and look in the back of desks and you think that it's a bird's nest constructed by a huge bird. All these wires just tangled up all over the place. And each one of them is attached to some kind of electronic device and every one of those devices consumes energy. Put that all together, it's called plug load and it's a big, big, big slice of the pie. So let's move right on to Kevin. Good afternoon, Kevin. And thanks so much for being here. My first and most relevant question is the name of your company is Ibis Networks. Now I associate the Ibis bird with something I see on Egyptian, what do you call it? Hiroboros. Hiroboros, yes. So we're in a world that Ibis come from. Actually, and the logo isn't an Ibis bird, but the origin of the name is actually from an acronym that we came up with early on, which is Information Based Savings, or IBS. We then kind of turn that into Ibis, which actually works out pretty well because there are a lot of connotations that come along with the Ibis bird in ancient Egypt as well as even since then. But really kind of the more meaningful part of that is that it's not just about being able to control the power on and off, it's also about getting a true understanding of what's happening with all that plug load. So you understand which devices are drawing the most and when, and then be able to take action based on that knowledge. Yeah, that brings to mind a phrase that we in the energy business use frequently. If you can't measure it, you can't control it. And I think that's exactly what you're all about. That's exactly right. Yeah, yeah, yeah. So let me, before we launch and do the specifics, say that I'm the, or not the, one of the energy efficiency guys for the state of Hawaii. And the reason, one huge reason I love efficiency is we all, you're a very intelligent audience out there. You all know all about the Hawaiian electric demand curve at six in the morning, demand is very low. It rises, rises, rises, rises up until around 10, 10, 30 kind of levels off. And then these days, suddenly it begins to dip, dip, dip, dip down in the middle of the day, what in the world is happening? We've got 72,000 PV systems, photovoltaic systems out there statewide and the sun is going strong. They're feeding electricity back into the grid and it's carving this great big chunk out of the middle of the load. And that's creating some headaches to put it mildly for Hawaiian electric. But then Hawaii's peak use is between 5 p.m. and 9 p.m. Why is that? Everybody's coming home from school and work and all systems in each home, hundreds of thousands of homes are going full blast. And here's the kicker.  All the tourists are coming in from the beach, from shopping, whatever. They're taking showers, turning on the TV and then they're going to all the restaurants and bars and they're all going full blast. So there's our evening peak. Now to get back to energy efficiency, what I like about energy efficiency is it shaves the load evenly. Whatever the efficient product is, it follows the existing demand profile including that evening peak. So the more efficient equipment you have out there, the lower that peak is going to go. And as soon as we can really, what's called, shave that peak, we can begin to talk about shutting down some more of Hawaiian electric power plants. So because there's, well, I won't go into the details of that. So anyway, why don't we go to the next slide and look at plug load challenge. Well, actually I covered some of this, but go ahead. Yeah, sure. And as you mentioned, lights and air conditioning, HVAC is more commonly known, do still account for about two thirds of a building's energy use. But what a lot of people realize is that all of that accumulated, aggregated plug load basically can account for up to 40% of the rest of that. So very, very significant. And while to your point, there's been a lot of work in optimizing HVAC. There's been a lot of ongoing work with LEDs and other mechanisms to help with lighting. Firstly, nothing has been done with plug load. For most building engineers and owners, it's just a black hole. They know it's a huge part of their energy use, but don't know anything more about it. And so that's where we come into play. We have tools that bring the internet of things principles to energy management. And we've shown that we can save up to 40% or even some cases above 40% of the electricity usage on managed devices in commercial buildings.  Are you maybe one of the few people in the universe who can clearly describe what the internet of things is? Well, without trying to make it too broad, essentially what that means is that all of these various sensors that, for example, ours put around and sit between the devices and the wall, all of those sensors have real-time data and communicate using internet protocols up to, in our case, a cloud-based system. And so I can go in from any browser on my phone or tablet or computer from anywhere in the world and be able to see real-time data of what's happening in my system as well as then-exert control, turn things on and off or set algorithms or schedules to manage it. But the key point there is that because we're using internet principles, essentially all of these little devices almost are like little computers all communicating to each other and to the internet and to the cloud. So that's the internet of things. It brings to mind a kind of humorous story. We were having a presentation by a national fellow in a similar business and he said, he was trying to explain this and he said, for instance, I think he was from Seattle. He said, let's see what my dog is doing. And he pushed a couple buttons and there was a camera in his home, not there, and then there's a living room and bad doggy, you're on the couch. Yeah, sometimes you're not sure, but you wanna run that demo live, but that's exactly right though. And so we're applying it in a slightly different way. The other thing that you hear a lot about with internet of things lately is about some of the security risks as a lot of these kind of sensors and networks are fairly open and or easily hacked. And so that's one of the key differentiating points that we bring with our system is security. This was developed originally for military applications. And so we apply proprietary algorithms and encryption to avoid some of those issues such, you're probably not too worried about somebody being able to log in and see what's going on with your dog, but you'd be very worried about people being able to somehow hack in and turn things on and off. Or you have secure proprietary information in there. It's unique to your own company. Yeah, exactly, exactly. And so I think that that's one of the areas in internet of things that's going to continue to be a focus area for companies is ensuring that level of security and being able to address that as well as scale, which is the other big issue. It's one thing to be able to look at one camera or turn on and off one device in your house or maybe even two or three. But what we've tried to do is approach it as a commercial building and say, what if I've got tens of thousands of these devices, monitors, printers, copiers? How can I manage that in a way that makes sense? Yeah, it's mind-boggling to a non-techie such as myself. Exactly, so that's a big part of our system is addressing just that. Yeah, so we're on the next slide. Now, plug load opportunity. Yeah, and I think a lot of people may or may not realize most office buildings are actually empty two thirds of the time with nights and weekends. And yet a lot of these devices stay running either in full power mode or often in sleep mode. Sometimes it's called vampire or phantom load as these devices continue to use a little bit of power. Copiers, for example, or printers will stay on in somewhat warm even in sleep mode or water coolers that keep the water hot and cold 24 seven, whether anyone's around or not. So by just by turning these devices off when nobody is in the office, then turning them back on before the first person comes back in, you can save significant amounts of money just based on that. And then we can apply other types of strategies too to the point about having real-time data. And you said if you can't measure it, you can't manage it. Well, that's exactly right. But once I have real-time data, I can understand which devices are more or less efficient, which devices are becoming less and less efficient over time so I know when it's time to repair or replace them. And I can enforce user behavior policies. So if I tell people to turn things off at the end of the day, I can go in and check and see if they've actually turned them off or not. And all of those strategies taken together, we can accomplish significant savings. So when it comes to not just that peak shaving but also if you think about overall state goals for moving towards renewable energy, it's not just about generation. It's also about cutting consumption. So we can go a long way towards cutting that. So when you mentioned everybody goes home at five, six o'clock, well, if I can cut a lot of the power in the commercial buildings, I can offset what they're turning on at home. And then let's say I think we're in a building that's 32 stories high here and a whole lot of people go home at 435, 530, but some people are still staying. So how can you, how do you manage, you manage floor by floor, office by office. We actually can manage all the way down to the individual device. So depending on your office, your company, your department, your individual person, I can adjust those schedules to meet their work hours. And as well, we also have an override so that if you need to stay late, you come in on the weekends, God forbid. It's very easy to restore power to anything you need. And so we make sure that we can accommodate the actual real world situations of offices. And I would point out that every one of these devices, no matter how slow, are producing some kind of heat. The more you have them on, the less heat produced, the less your AC load. And if you go into an office on the weekend, there's no way to see, you're more comfortable because the temperature is lower, because there's not all of these devices all over the place that producing heat. That's absolutely right, yeah. Okay, well on that very, very cheery note, we already have to take a break. Think Tech Hawaii, Code Green, back in a minute. Hi, I'm Donna Blanchard. I'm the host of Center Stage, which is on Wednesdays at two o'clock here on Think Tech. On Center Stage, I talk with artists about not only what they do and how they do it, but the meat of the conversation for me is why they do it, why we go through this. A lot of us are not making our livings doing this, and a lot of us would do this with our last dying breath if we had that choice. And that's what I love to talk to people about. I hope you enjoy watching it, and I hope you get inspired because there's an artist inside G2. Join us on Center Stage at two o'clock on Wednesdays. Bye. Hey, Style Energy Man here. Make sure you tune in on my lunch hour every Friday from noon until 12.30, at least. Maybe I'll go a little long if you've got good stuff to share with you. But we'll talk about energy, all kinds of energy. My favorite is hydrogen, and my favorite, other favorites, transportation and hydrogen. But we'll talk about all kinds of energy. Be with us every Friday at noon, Style Energy Man, aloha. Good afternoon again. How are we, Code Green, Think Tech Hawaii? My guest, Kevin Howes, of IBIS Networks, we're just beginning to get into the nitty gritty of how you control that big, big, big segment of energy use in a commercial building. So if we could bring up the next slide, how it works, system overview. So I want you to take it away, Kevin. Sure, and I mentioned before that we've got these sensors or what we call, kind of, telesockets that we plug in all around an office. Actually, I've got a couple of samples here on the desk. They're very small and we have, we accomplished so various kind of sizes. So for various voltages and amperages, we can accommodate them. These happen to be our two kind of low power, 110 volt kind of devices for your basic office equipment. And we plug these devices in. They communicate kind of with each other and pass real-time data through a proprietary kind of firmware over ZigBee, which is kind of the radio frequency we use so it doesn't impact your Wi-Fi networks, and then through a small, essentially, router up to the cloud. And I can log in from any browser-based system and understand, see what's going on in real-time, run reports, run analytics, set schedules and manage not just the devices, but also the power to the devices, essentially turning things on and off when they're not used and, or being able to run analytics, as I mentioned, so that if devices are starting to become less efficient or look like they're behaving erratically, I can send somebody to check on them. So that helps extend device health and life so I can get much more of the equipment I have. Now, say this building hired you to control energy in all 32 floors or whatever, how would you do that? Would you start on floor two and wander around and look at all the devices and then go up to floor three and then up to floor four? How does that work in here? Yeah, we would work with the, this is a multi-tenant building, so we would work with the different tenants to understand the equipment that they have, which equipment is more or less likely to be candidates for a device like this. There's really not much benefit to putting this on a pencil sharpener or something that's very, very low power, so we would go through, understand the kinds of equipment that is either mission critical that they really want to be watching and or that we could effect either by understanding the data or through schedules and then the voltages and amperages that we would need then come back to install it, very, very easy install, plug it in and then we'd establish a baseline, see what the energy use is happening in real time and then work with the tenant, work with the building owners to establish whether it be schedules or other tools to optimize the energy so they can get more out of the equipment while still saving energy. And if I were a smart building manager, I would get every tenant to cooperate with this by saying you are individually metered. Well, no, individual, it varies, doesn't it? It varies a lot by building. In a multi-tenant building, the electricity is typically included as part of the lease so it's a set amount. So we're still working with building owners and managers to figure out what types of incentive programs can be put into place. As a great example, there's buildings even in downtown Honolulu where you've got a law office which maybe two or three guys in their laptops not using very much energy at all and another floor you may have a laboratory or something with a lot of heavy equipment or a printer that's using a lot of energy. So working with the building owners and the tenants to find ways to better incentivize and reward tenants that are more energy efficient. Yeah, I'm the energy codes guy and I put into the new codes the fact that all tenants over 1,000 square feet, including living units, shall be individually metered and that metering data shall be accessible by the individual tenant. And we have actually found that user behavior can change significantly just by exposing that information to the users. Before you even like go and market or tell them or create policies around it just by letting them know how much energy that refrigerator or that space heater or whatever is using, you can impact their behavior just because nobody wants to be wasteful that most cases are just not aware of how much energy these things actually use. Okay, well, we don't have all that much time. What do we have for another slide here? Well, I think what would be useful, yeah, is very quickly we can talk about where we are. We are Honolulu based, we're a spin out of a local engineering company called Oceanette and we have actually advanced the technology we're in our third generation of the hardware and the software. Because it's important for commercial buildings, we integrate with building management systems over something called back net, which is just a industry term.  We're on a couple of military bases with pilots. We've been doing a lot of work with schools, including the UH system and the Department of Education. We're in a number of public schools here, which we're very excited about and of course commercial buildings. And with that, I don't know if it's the next slide, but I thought what would be fun is to show just a little bit of data from one of our installations at the University of Hawaii. And I'm not sure how well you're able to see this, but essentially UH has a very significant energy usage profile and roughly about $40 million or so of energy use here. Can you tell us what the peaks and the valleys are because we can't read the boundary? Absolutely, so the graph in the middle is essentially a typical week of UH Minoa. And you see the peaks there are your weekdays. You see a couple of days there and then weekends where it's not quite as high. But I think what I like to point out about this slide is that those valleys, the overnight, middle of the night when you think the energy use would be at its lowest, it is, but it's still literally 50% of the peak. Yeah, the bottom part, that solid is called the base load and that is one heck of a base load. Exactly, and that also represents a lot of opportunity for savings. And that's where being able to apply some of these strategies we talked about can make a huge difference. And as I mentioned, we've been able to show by applying various strategies, we can save over 40% of energy use on managed devices which equates, if you look at the entire electricity bill to about 10%. So very significant, especially if you've got a $40 million bill. Wow. And is that 40 million just for Manoa campus or is that the entire university system? I believe that's the Manoa campus. And do you incorporate, can you incorporate AC, HVAC into this or that's a totally separate issue? That's really a separate issue. Most large buildings have central air conditioning which is managed through different types of systems. But where we can apply this is for smaller window air conditioners or in some cases, split systems. So for example, with the heat abatement program that the DOE is putting into place, a lot of that's gonna be portable and window air conditioners, some of which are gonna be PVAC, portable tech but still have a plug load component for cloudy days. And so we can still provide a lot of benefit in those types of systems. And we're really excited to work with the DOE to help them understand kind of real world use what these air conditions are actually going to be using and then help optimize that.  But if all of those thousands of classrooms were air conditioned, there was no way on God's green earth that DOE could be the electricity bill. So you in working with them are hopefully gonna be able to offset. We can offset a big part of that and we can make sure as an example that they get turned off. Despite best intentions, a lot of times air conditioners or space heaters would not get left on at the end of the day. But if they run overnight or over a weekend, it can add up very quickly and across 12,000 classrooms in the state, it adds up. So we can absolutely make sure that they're turned off as well as provide real world data which brands of the air conditioners are more or less efficient. And what's the actual energy load that it's putting on the school so that the school and HECO can appropriately provision the school to make sure that their airsees are running but not over provisioning and wasting money in that regard as well. Yeah, that's gonna be so important and I'm so glad you're working with them and with the University of Hawaii, their AC bill is... It's significant as well, absolutely. And I know we're a little bit short on time but we can also do some other really interesting things such as HECO's moving towards a demand response program. I have a demand response right on my notes here. Oh, there you go. Good, good, yeah. Well, we found we did actually a pilot program with hotels and hotels typically don't like to do demand response because they need to be on 24 seven to service the guests. But if you go in and you can selectively choose devices such as the ice machines or some of the vending machines to participate, then it's fine, not a problem. And if you think about all the ice machines and all the floors and all the hotels in Waikiki, by turning them off when you hit that 5 p.m. peak, you can make a very significant difference. So from a grid perspective, it's a really interesting proposition. You might clarify for our guests what in the heck is demand response. And I might say that Hawaiian Electric is looking really, really closely at demand response. And in my humble opinion, it's gonna be one of the major ways that they're gonna be able to reduce energy. So what is demand response? So demand response is essentially if you think about electricity provisioning, you've got the generation and the supply side, then you've got the demand side as well. And so it's always difficult to balance those and make sure that they're essentially about equal.  So there's a technology that's in place and there are a few different approaches to it that essentially can dynamically go in since that imbalance is happening and selectively turn off certain demand side appliances. So we mentioned icemakers and things with hotels, but generally speaking, it tends to be more like commercial businesses that have industrial lines that they can bring down on a fast response for 15, 20 minutes until the supply can catch up. And I should mention that the Hawaiian Electric just doesn't go in and intrude, they enter into agreement with these clients. Yes, these clients are due by in, and in fact, Hawaiian Electric, our most utilities actually pay them to be part of this program. So there is a reward for them to participate. Yeah, yeah. And any wrap up notions here? I think we ran out of our slides. Oh, okay, here's how it works. Well, we've kind of already visited that. I think that if there's a takeaway is that, really when it comes down to thinking about, why is goals and what we're trying to achieve from energy dependence, demand side and what's going on with the conservation and energy efficiency needs to be absolutely a part of that discussion. And it's not just around HVAC and lighting. Now we've got new tools such as ours that can go in and help address even some of the other devices that are around the office. Absolutely, this would have been inconceivable 20 years ago, maybe even 10 years ago. There were energy management systems, but they were complex and the operator had to know how to do it and... And they still are. There's still a lot of those systems, but we're trying to simplify that as much as possible. But you're absolutely right. Even five or 10 years ago, this would have been just a matter of concept. But now we can see it applied in real world and we're actually seeing the results. And my mandate is HCEI, Hawaii Clean Energy Initiative, 100% Clean Energy Electricity by 2045. This is gonna be a major contributor to that. And on that cherry note, we have to close Kevin Howe's IBIS networks. Thank you very much. Thank you, Howard. Enjoy being here. Thank you.


The Athletics Federation of Nigeria has blamed Nigeria's Sports Minister Sonday Dari for determination of the $2.7 million sponsorship deal with PUMA. The Federation claims the German kit company sent Olympic kits to Tokyo for the athletes, but the minister intervened through the Nigerian Embassy in Japan, stopping them from sending the kits to the athletes. The Federation signed a four-year contract with PUMA in 2019 and was due to expire in 2022. Part of the contract is that PUMA will supply Aparallel of all age categories to Nigeria's athletics team for four years at no cost. Also, gold medalists at the Olympic Games will earn $15,000. Silver medalists will get $5,000, while a bronze medal will fetch athletes wearing the PUMA Aparallel at the Games, $3,000. But reports have it that Minister Sonday Dari had vowed that Nigerian athletes to the Games would not wear PUMA because of a leadership toss-up between him and the previous leadership team.


So, I have started to work for PDF. Whether to realize that sometimes that you can in bacteria do queries to look for what you are looking for. Mutta sitten siksi on vain mahdollisimman, että löydät esiintyksiä, joilla käytännössä voidaan tehdä. Siinä on muutoksia muutoksia, jotka voidaan tehdä, mutta sitten ei ole mahdollisimman. Tämä ei ole mahdollisimman kokeilla, koska se on kokeilla, joten se on kokeilla, että se on kokeilla, että se on kokeilla, että se on kokeilla. Tämä on seuraavaa puolesta, joka on koko ajan. Nyt on seuraavaa, että on seuraavaa, että on seuraavaa, joka on koko ajan. Yksi kenttä maailma on se, että se on vähän, joka on hänenaikoista. Kaikki jälkeen on se, joka on hänenaikoista. Yksi kenttä maailma on se, joka on hänenaikoista. 1,000 uses. So that where this chart gives us an idea of the volume of marks reported in Mozilla, where the number of marks that you have to deal with. So the same four elements are also 4,000 uses that changes done in Mozilla. Let's say you changed one bar from that, that changed. So you have more than 3,000 new uses. So yeah, the question, we should have a loop of uses, that means more than past uses, keyway uses and then just normal uses. Well, I think you get it. So my answer would be like, no we want the freedom, but normal uses in Mozilla, we just, the only thing that you can change is the priority and security, is the resolution. And then from Mozilla, I put it in a case on document. So then we did a script, I thought okay, use that data. To fix automatically. So first thing I need to do is, we do report, normally it's in Mozilla. So that is when it's a script, into my, their ISR report. So the original possible console using the website, it's where normally, when we have old house, we ask the reporters and the users in that pack to retest it again. So normally, when there is one error in activity, we just send this email, this comment, we write it's still reproducible. Normally, when we ping this box, normally we get around 20% of the box fixed as, for me, so normally, yeah, when we do this class then it's in the latest version, to see if it's still reproducible. So the problem here is, well, we have this thing, which is measured and we just say, well, we just want to know the error, retest in the latest version, what they do and check these other things. So now, change the version when it was run, the script's ending up, because that's when changing it to a new version, it's not the correct way of, yeah, it's incorrect. Working a pack that you intend to, you intend to work on that and fix it, then, okay, go for it, assign it to yourself and that's it. Or to new, because we don't want it to be any kind of error, because it's three hours from the pack. So just, let's see a user, just reports a pack, put it new, check that pack. So then, check which packs are auto-confirmed. So when I do this, when I do confirm, then I just, okay, three hours, or I just put it back or I confirm, waiting for someone to three hours. So users, they report a pack, and then, some time later, fix it. Or, you know, like, they test it with a newer version, a new version of the fix in the version. But then, solve fix, which is, solve fix, it means there is a comment for that, fix it, developer fix it. So this thing, by the way, is the test. It's reproducible in a release range. So, if possible, not the worst, but if possible, try to record it. The signature is pointing to this. Well, we see contributors, well, new contributors, that they just submit the packs to Maxilla, and normally they use the packs, well, there's a packs keyword. So in that case, instead, submit the packs where people are used to later checking that pack. So, see if it's indeed a progressive model, fix it, this is a reminder. It's in this big dimensions, well, this is common. I just move back in time, and I see the problem first, and then I just send it to Maxilla, in this case. In order to get newcomers involved in the project, involved in QA. So now, it's not changing the version, so it's just checking it with the latest version. Then, I see if it can work, it's indeed a creation, so I just check it with the latest version. So, it's still open. So, yeah, you should then, well, this now should be closed if there is some similar case in Maxilla, and what they have done, where those approach, say, personal use of pointers, yeah, in general, it's quite positive, because they are really interested in Maxilla, and so on. So, they are like, whatever it is to say, which was the last action of person in Maxilla, and if that person was involved or was changing, like, more than with the packs, and I suppose that, occasions of that, then I just send them out, we receive an email, say, well, we did great, you did great in the past, yeah, we would like to know about it. Yeah, it is actually, yeah, it works sometimes. I answer back, yeah, you know right now, but maybe in the future and so on. So, I will try to give those to those people. So, that is it.


Ukrainian defenders liberated 18 more square kilometers. Ukraine's Deputy Defense Minister Hannah Malia has reported that the Ukrainian forces liberated almost 18 square kilometers of territory in the countries east and south in a counter-offensive over the past week. Malia wrote this on Telegram. Over the past week, the offensive actions resulted in the liberation of a total of almost 18 square kilometers of Ukrainian territories in the countries east and south. The area liberated during the offensive totaled 210.5 square kilometers. She wrote, During the same period, Ukrainian forces have advanced more than one kilometer toward Russian-occupied Militopol and Burdiansk in Zaporizia Oblast, said the General Staff's spokesman Andrey Kovalev. The enemy resists, moves units and troops, and actively uses its reserves. Heavy fighting is happening in the Bakhmut area, said Kovalev. Hannah Malia said Ukrainian forces managed to capture key heights over Bakhmut, putting their artillery in range of Russian positions in the city itself. Our defenders have been keeping the entrances, exits and movements of the enemy through the city under fire control for several days, she said. At present, the active offensive actions of Ukrainian forces on the Militopol and Burdiansk axis are ongoing. Since the beginning of the summer counter-offensive, Ukrainian troops reportedly advanced 8.6 kilometers in the Militopol and Burdiansk directions and regained 169 square kilometers of land there.


In continuation, our discussion on exploiting the debt holders while taking the advantage of leverage, let's see how debt overhang problem can be estimated and what are the leverage-raget effect. How much leverage must a firm have is a significant debt overhang problem. There is an approximation rule to measure this problem of debt overhang. This rule says that the equity holder will benefit from the new investment opportunities only. If the project's profitability index is exceeding the relative riskiness of the firm's debt times its debt-equity ratio and for a firm who has zero debt or a risk-free debt, the net present value will be greater than zero. And for the risky debt in that particular firm, the required cut-off is positive at it will be increased with the increasing level of leverage. We have an example to compute debt overhang. We have two companies here and we have their respective values of their equity betas, debt betas and debt-equity ratios. Requirement is there to determine minimum NPV such that new $100,000 investment will benefit shareholders and which firm has the more severe debt overhang problem. And for this, we need to determine the cut-off level of profitability index and that comes to 0.0375 which means that there should be at least NPV of $3750 that can benefit shareholders. And so far as the cut-off level of profitability index of tax is concerned, it is 0.1675 so there is a severe debt overhang problem because its shareholders will reject all the projects that have even positive NPVs up to this higher cut-off rate. The shareholders can benefit only if this firm cashed out by liquidating its assets up to $116,750 in order to pay an additional amount of $100,000 in dividend to its stock holders. So how agency cost can affect the value of leverage? We see that owners and managers may be induced to increase leverage even the firm's value is declined. Similarly, the equity holders benefit at the expense of the debt holders in that particular case. With financial distress cost, we see that shareholders finally bear these agency costs because the debt holders recognizing this particular problem pay less amount initially to the firm when the firm is going to issue debt. So this reduces the distribution available to the shareholders in the form of dividend. The net effect of this issue is that the reduced initial share price of the firm net reduction is in fact in line with the decisions of the negative NPV of the project. So we can say that at the initial stage, the price of the shares reduces in line with the negative NPV of the firm's decision. The likelihood of the firm's default and losses on its debt holders create these cost of agencies or agency cost of debt. The riskiness of the firm's debt level rises with the magnitude of the agency cost. Agency cost represents this particular agency cost represents an other cost of increasing the firm leverage that will affect the firm's optimal capital structure choice. Another example that would the agency cost arise if the firm owed 0.4 million rather than 1 million to its debt holders. We have an option where there is no investment decision, then the firm's assets would worth 900,000, the debt value is 400,000 and the remaining $500,000 will accrue to the equity holders and if the firm takes a risky strategy, then the assets will worth 1.3 million or 0.3 million and with the payment of 400,000 debt out of these assets, the equity will worth 0.9 million or 0.0 million dollars. So the expected payoff to the equity holders would be 0.45 million. The equity holders will reject this risky strategy and it will be reducing the expected payoff to them. So what about an under investment issue? We see that in that particular case, the new equity issue will be 0.1 million. The firm assets value is 0.9 million. The value enhancement is 0.15 million while deducting the debt value of 0.4 million from these amounts. We have a net gain of 0.15 million for the equity holders. So equity holders are paying off of 0.15 million for an investment of 0.1 million. This means that equity holders will be accepting this new investment strategy as they are here better off in this particular case. What is leverage-ratchet effects? You see that this effect captures two observations like the existing debt holders induces a firm to increase leverage despite of the fact that it will be decreasing the firm's value. And other observation is that the shareholders will not have an incentive to decrease the leverage by buying back the debt even this decision will increase the value of the firm. This ratchet effect is an important additional agency cost of leverage affecting the firm's future growth and its other financing decision. This effect in fact induces the firms to borrow initially lesser amount in order to avoid these costs. But over time this effect may lead to higher leverage as the owner prefer to use more debt in the firm. How debt maturity can be related with the certain covenants? See that there are several ways to mitigate the firm's agency cost of debt. The first way is to use of short term debt instead of long term debt. But this reliance on short term debt will obligate the firm to repay or refinance its debt quite frequently. And also the firm's risk of financial distress will increase the cost of financial distress to an unexpected level. And the second way is that the debt covenants may be there, these debt covenants may limit the firm's ability to pay a larger amount of dividends or it may restrict the firm's investment decisions. It may also limit to acquire new debt by the firm. And it may limit the management's flexibility because this covenants decision may get in the way of the positive NPV projects and in this way these covenants can have their own cost for the firm.