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WORLD
FALL 2011
THINKING POOR OR
POOR THINKING?
RETHINKING
AFRICAN
DEVELOPMENT
10 SOLUTIONS
TO POVERTY
SINGAPORE:
A REFORM
SUCCESS STORY
e National Finance Students Association
is a non-prot, student-run initiative, which
aims to increase the competitiveness of our
members in the job market. We achieve this
goal by creating networking opportunities,
oering support, and providing resources
that can be used to better equip oneself for a
transition from university to the workplace.
We are committed to creating a nationwide
network by bringing nance professionals,
students, and educators together
through our seminars, conferences, and
competitions. We are focused on fostering
personal development and growth among
our members, while accumulating tacit
knowledge and experience which can
be leveraged to gain a real competitive
advantage while seeking employment.
We invite you to explore your potential.
nfsa.ca
The National Finance Students Association
is a non-prot, student-run initiative, which
aims to increase the competitiveness of our
members in the job market.
We achieve this goal by creating
networking opportunities, offering support,
and providing resources that can be used to
better equip oneself for a transition from
university to the workplace.
We are committed to creating a nationwide
network by bringing nance professionals,
students, and educators together through our
seminars, conferences, and competitions.
We are focused on fostering personal
development and growth among our
members, while accumulating tacit
knowledge and experience which can be
leveraged to gain a real competitive advantage
while seeking employment.
We invite you to explore your potential.
nfsa.ca
careers. education. ideas. all of it.
!
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editors note
To the Arbitrage Community,
As you trade in summer vacation for a return to books and lecture halls, let the
ARB help you regain your academic groove with some BITE through the release
of our eighth issue.
|o |||t o eceot stao aoo .|t|o oo||c c|aoes a|eo at steot|eo|o oo
standing as North Americas largest, student driven business news magazine, I
would like to personally commend the hard work and dedication of our ever-
growing staff and contributors, and encourage our broad readership to challenge
us to be better. I welcome everyone to join us on this journey as we continue to
grow as a legitimate business magazine, extending our news reach and relevance
to new heights.
Co o.t| |s eeo||eo |o oo |atest |ssoe, .||c| .e a|| aee |s oo best et.
We have been passionate about featuring poverty as a theme for the magazine,
and we felt this was the ideal time to do so!
Poverty has consistently proven to be a prominent issue we face as a global
community, but it has been emphatically heightened in light of the persistent
economic hardships we cannot seem to escape.
From rethinking African development to embracing the remarkable progress
o S|oaooe, t||s |ssoe oes beooo a sooec|a| ac'oo.|eoeeot t|at oovet
is a real issue, and tackles head on what we can really do to combat it. Are short
term loans and donations really the solution to ending poverty in Africa, or must
.e o| oeeoe` Taooeo |o a oo||t|ca| batt|ee|o, |as eoo|o oovet s|o| becoe
rhetoric? Read on, open your mind, and make your own personal conclusions on
this contentious topic.
Naturally, the ARB always stays true to its strong student readership. Budding
Investors introduces investment opportunities for students; Apple Nation
acknowledges youths fascination with Apple Inc; B-schools: Which ones for you
helps guide business graduate hopefuls to their dream schools; and Entrepreneur
Watch: Dan Tanenbaum gives some sound advice about entrepreneurship from
the ground up.
Take a seat, buckle up, and prepare yourself to be enlightened by our latest
installment: Ending Poverty.
Andi Kusuri
Editor-in-Chief
Arbitrage Magazine
Founder & CEO
Board of Directors
David Alexander
Samita Vasudeva
Garin Kilpatrick
Michael Manirakiza
Rabeea Wajeeha
Editor-in-Chef
Magazine Production Team
Andi Kusuri
Managing Editor
Shindusan Parameswaran
Co-Senior Online Editor
Teng (Tony) Ge
Online Editors
Katherine Nader
Amna Siddiqui
Elizabeth Varvaro
Liana Crocco
Kelly Townsend
Sectior Editors
Abinash Murali Narayanan
Anna Marszalek
Hailey Dale
Natashalee Reid
Staff Writers
Jennifer Jang
Liam Scott
Zack Larmand
Exequiel Octavio Bertaina
Maymuna Abdi
Chet F. Chung
Aditi Sethi
Prachi Kamble
Corinne Ton That
Arina Kharlamova
Betty Yan
Kenyo Smalling
Khristopher Reardon
Devin P.L. Edwards
Siavosh Moshiri
Amanda Childs
Samadrita Guin
Herbert Lui
Ellie Chan
Amanda Justina Thomas
Herbert Lui
Ellie Chan
Amanda Justina Thomas
Roxanne De Souza
Amarpreet Atwal
Megan Harris
Eric Blix
Meagan Yockey
Monica Cheng
Amanda Thomas
Michael Miles
Priya Gandhi
Shruti Desai
Christina Headrick
Christopher M. Robb
Katherine Thorsteinson
Andrea Normadeau
Kirk A. Devezin II
Contributing Writers
Sean Karmali
Ryan McLaughlin
Troy Redick
Alfred Yim
Magdalene Arthur
%JPMEXI&PSKKIV
Alex Vo
Partner Blogger
Peter Demain
Art Director
`ess ^(
Assistant Art Directors
Lily Li
Nahad Imarinad
*Cover Credits:
Davidlohr Bueso
tt,//...(:':c/,ctcs/oo.e.!,8
Staff Designers
Jennifer Lee
Laura Gonsalves
Angela Song
Christine Sherry
Monserrat Rivera
Joseph Kong
Richard Pereira
Richard Bramer
Andrew West
Tim Walker
Corinne Chesher
Nadine Kim
Eman Faiz
Laura Prosser
Eleanor Ma
Christopher Eric Olson
Selina McGinnis
In Young Lee
Ryan James Terry
Jae Lee (Keming)
Christina Lee
Azin Dilmaghani
Julaluck Kit Powsong
Clairel Lvesque
Adam Oliver
Summer Zhang
Arbitrage Support Staff
Marketing Director
Shelley Cao
Sales Manager
Jaspreet Singh
Communications Reps
Catherine Chen
Drew Tamakuwala
Marcia Rivera Navarrete
Alexandra Connerty
Ryan Hamilton
Assistant HR Director
Asad Niyaz
HR Coordinators
Sonia Choi
Mellisa Tan
09
Thinking Poor or Poor Thinking?
features
19
Rethinking African Development
23
Ten Solutions to Poverty
25
Singapore Blossoms
Into World Class Example
Ten Solutions to Poverty
25
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29
31
32
33
The Confounding Clich of Economics History
Child Poverty and Canadian Economy Prosperity
Budding Investors
Wall Street Destroying Weak Regulation by Purchasing the House of Representatives
\nemnk^
Livable Cities = Sustainable Cities
Womens Human Capital
Loaded on Pills: How North America is Losing its War against Depression
Apple Nation: Follow the Leader
37
40
41
45
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49
50
The Curious Case of the Disappearing International Students
UN Declares Famine in Southern Somalia
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53
55
57
59
Role of Cell Phones in Developing Countries
The ISP War on Piracy
iPhone Killers
Norway Retailers Pull Violent Games Off Shelves after Massacre
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63
69
Lntrepreneur Wotch: 8ump S0:S0s Mog|c Mon, uon 7onen5oum, u|g|t|ses the ofe
Owning a Franchise - A Feasible Option for Graduates
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73
75
77
Dinner with Herman Alves
Auto-Insurance Debunked: Toppling the Mighty Dictator
B-Schools: Which Ones For You?
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Fundamentally, poverty is a denial of choices and opportunities, a violation
society. It means not having enough to feed and clothe a family [] a job to
earn ones living, or not having access to credit. It means insecurity,
powerlessness and exclusion of individuals, households and communities. It
means susceptibility to violence, and it often implies living in marginal or
fragile environments, without access to clean water or sanitation.1 - UN
Industrial Revolution. Information Age. Economic Globalization. History is
marked by key events that highlight the continuous progression of human-
kind. Yet, history is also marked by events which have impeded our
and World War II, and the very recent global economic recession. Couple
modern market mechanism, and increased radicalism; and weve come full
circle.
As a global community, weve achieved a lot to combat poverty. Yet, were
far from ending it. Regardless of where you might be in the world, poverty
crosses all borders. Whether its corruption and famine in Africa; political
instability, powerlessness and exclusion across the Middle East; or even
growing frustration and unemployment in the worlds leading economies,
existing mental models, and take steps to identify solutions to combat it.
TRENDS
Thinking Poor or Poor Thinking?
Rethinking African Development
Resolving internal issues vs short term loans to African countries.
Ten Solutions to Poverty
Solutions to Poverty.
Singapore Blossoms into World Class Example
Development of Singapore (historical perspective)
01
02
03
04
1
http://www.un.org/esa/socdev/unyin/documents/ydiDavidGordon_poverty.pdf
Trends
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ArbitrageMagazine.ca Fall 2011 09
Trends
OUR POOR THINKING
Thinking about poverty usually swells
most of our hearts. Regardless of
personal political stances, our feelings
toward it dont differ very much: we
abhor it and if we could wed throw
the damn thing against the wall and
spit on it. We are all privy to the
devastating effects it has on those
unfortunate enough to cross its path,
and its agreed that this cancer must
be eradicatedSo why is most of the
world still gripped so tightly by it?
It is short-sighted to objectively claim
to have the solution to this problem
the reason why the Left and Right
continuously and vigorously battle it
out in the political arena. And it is that
debilitating political clash that in large
part maintains 80% of the world living
on $10 a day despite the economic
prosperity the 21st century can boast
on a global scale.
Sometimes people, too, can run into
this wall head-on and knock themselves
out. In fact, little progress has been
made in regards to poverty precisely
because of political prejudicesHell,
remember the frigidity of the post-WWII
period?
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POOR
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What are the causes of Poverty?
Fall 2011 ArbitrageMagazine.ca 10
Trends
!"#$%&'#()*+,+-.#/*0)1#2+3&+)#4-&5.*
This young woman
helps her self-group in
Kilimambogo farm a
small plot of vegetables,
working hard to increase
their meagre incomes.
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A COLD PAST
As the Capitalist System evolved
through the 19th Century and raised
the living standards of the succeeding
generations, more and more people
were pushed to the fringes of society
while a gradually decreasing number
of people owned larger portions of the
economic pie, a context in which the
middle class emerged.
The systems jaw-dropping economic
prowess and swift rate of growth
prompted most of the world to adopt
one form of it or another and the system
in its totality went unchallenged for a
long time.
Though the Bolsheviks had taken
over what would become the USSR,
the glorious 20s reminded people in
the West of the wonderful life that that
the power of unfettered Capitalism,
I ndustr y and I nvestment made
possible. Fascism arose for a while as
a viable alternative, particularly as the
economy in the 1930s was decimated,
and then the Second World War broke
out. We all know the ending to that
But the Union of Soviet Satellite
Republics (USSR) had consolidated
its power since the October Revolution
of 1917 and for just as long had brought
onto the international arena the reality
of a Socialist Agenda in regards to
economics, politics and culture. They
purported to reverse the poverty that
they claimed the Capitalist Bloc had
created. Lamentably, by the 1950s,
the USSR under Joseph Stalin had
deteriorated into a totalitarian regime,
leaving no room for individual freedom
and a looming bureaucratic menace
ripped right out of Orwells 1984 as its
legacy.
The end of the Cold War, amongst
other things, convinced the world to
denounce the idea that Socialism
could solve the problem of poverty.
And understandably so, because its
ambassador ended up creating more
poverty, inequality and state corruption
than before.
Victorious Western Capitalism is
today exported practically worldwide.
Its thought that the fantastic wave of
neo-liberalism will lift the Third World
out from the bottom of the sea. But
a venomous concoction of hyped-up
political antagonisms and unfettered
neo-liberalism has caused adverse
effects.
HYPED-UP GROWTH & CONCEALED
WOES
When that fantastic wave of economic
growth came, the Third World seems
to have been sucked down by the
undertow rather than being lifted.
Floating comfortably above sea level,
our analytical and critical perspectives
have been blindsided by staggering
economic growth. Today, we believe
the neo-liberal theory of trickle down
economics so deeply that we often fail
to internalize clear signs of its potential
to create dependency and poverty.
In Ecuador a small Third World
Andean country in South America
33.1% of people live below the poverty
line, according to the CIA Factbook.
ArbitrageMagazine.ca Fall 2011 11
Trends
Claiming that the dollarization (U.S.)
of the national currency has helped
revitalize the investment climate,
reassured potential investors and
potentially increased the capacity of
the economy to create employment and
reduce poverty, the UNs Report on
the Assessment of Poverty in Ecuador
and other promoters of neo-liberalism
stand by this decision with their lives.
However, the same Report also
explains that despite further subduing
hyperinfation at home, families' lifetime
savings were often swept away, and
the miniscule reduction in cost of the
average consumption basket ended
up helping mostly only the non-poor,
considering the particular consumption
patterns of the poor.
Right here in Industrialized Canada,
Prime Minister Harpers personal
ideas have been that the best long-
term strategy to combat poverty is
sustained employment of Canadians
a noble idea to espouse would the
unemployment rate not be about 3%
higher than that of Ecuadors. But it
isnt only that a country with a $1+
trillion GDP still fnds 8% of people
jobless; there are also 3+ million
Canadians who are poor, of which
610,000 are children, as reported by
an article in The Economist.
And Canada seems to have a poor
record when it comes to children. As an
article from Street Level Consulting Ltd.
reports a counseling and consulting
company set in Calgary, Alberta:
Despite a period of unparalleled
economic expansion in the mid
1990s, this decade was one of failed
expectations and broken promises
for children and their families[A]t a
time when governments had a growing
capacity to invest in a long-term vision
for children as they had promised to
do they chose instead to cut taxes
and dismantle much of the social
system that protected families.
According to an activist group called
Campaign 2000, in 2010 the rate of
child poverty was as bad as two
decades ago.
Public spending cuts have also been
criticized by various circles. In Canada,
part of the reason why child poverty
was high through the 80s and 90s and
why it remains there today, is because
massive public spending cuts was
the prescribed medicine for a sickly
economy, which was being challenged
in those decades by recessions.
The 1980s blow was mildly softened
by government spending still covering
some areas, but the 90s cuts went
blood-deep: federal and provincial cuts
to employment insurance and social
assistance gutted the social safety
net and it infated the magnitude and
duration of poverty. Today, after the
brutal 2008 2010 recession, around
48% of the jobless continue to cope
without jobless benefts.
The nature of the Canadian Social
Welfare System also seems to be
like a boulder weighing down people
trying to come up for air. Apart from
public spending cuts, 90s policy
also required individuals to renounce
most of their personal assets in order
to qualify for welfare. Though the idea
was to make the program available only
for the most destitute, an article by
the Ottawa Sun reports that generally
people looking for welfare have to
spend their retirement savings before
they qualify, with small details varying
from province to province.
In the same article, John Rook,
Chairperson of the National Council
of Welfare, argues that with low asset
limits, low-earning exemptions and low
welfare rates people become trapped
and doomed to precarious fnancial
situations, especiallysingle people.
Adopting a program like Manitobas,
where families can keep up to $16,000
in savings, is something Rook has
recommended to other provinces.
Poverty, like religion, is usually
discussed very superficially, lest
peoples politics get in the way and
cause fall-outs. Though we recognize
it is a cancer, the boulder is often left
unturned in a casual setting due to
our political ambivalence. Summoned
in a formal manner, such as by an
Economist or a Politician, the topic
usually gets muddled in a political
swamp.
Take Ecuador once again. Former
President Osvaldo Hurtado, of the
political right, undermines 64% of
the electorate that by all accounts
legitimately approved a 2008 referendum
calling for a Constitutional Amendment
by incumbent President Rafael Correa,
a left-leaning politician, when he
unfoundedly asserts that the election
was won through control of advertising
and propaganda, manipulation of
voters, and sophisticated election
frauds.
He also insists that President Correa
is attempting to create a Dictatorship
like Chavezs, he says despite the
fact that since his coming to power
$15+ billion have been reinvested in
public works, helping reduce poverty
by almost 6% from 2009 to 2011, as
reported by Prensa Latina.
This political division has capped
much of the progress the world could
have experienced otherwise. Precisely
because Economic Liberalization has
reached such staggering heights
and complexity, writes J.W. Smith,
an independent Economist, few of
todays powerful are aware of the
waste and destruction created by the
continuation of this neo-mercantilist
struggle for markets.
And its not just the powerful. Our
personal economic advancement has
conditioned us to subconsciously
defend this way of life (part of the
reason why, like poverty, we abhor
socialism) and in the process to
continue reproducing the conditions
for global poverty.
The framework within which we
work and look for answers to the
problem of poverty is designed to
alleviate the problem - not to fx it -
and hope to get better.
But this is just a bandage over a
gashwhat happens when the gash
deepens and the outpouring blood
overtakes the bandage?
LIBERALIZING POVERTY
Like a powerful avalanche,
globalization grows massively as it goes
and its force is like a stream overtaking
us all. We cant help but giggle with
excitement at the idea of connecting
with virtually everyone around the world
through our keyboards. The economic
impact its had on our lives practically
tickles us silly. But the avalanche has
also trapped many under the rubble.
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Fall 2011 ArbitrageMagazine.ca 12
Trends
While its advantages are magnifed,
the repercussions of Free-er Trade
amongst countries are vaguely pointed
out as sad but inevitable. Though
consumers save money as rabid
competition between Canadian and
foreign companies ensues, we often
ignore that people will inevitably be let
go as companies close and outsource
to Third World nations, where workers
can be paid a fraction of Canadian
laborers wages for the exact same
work.
In Ecuador President Correa has
put forth an initiative to leave 846
million barrels of petroleum ($7 billion
worth) untapped in the Yasun National
Park, the most bio-diverse swathe of
rainforest on earth. This would avoid
407 million tones of CO2 emissions
and help raise life-expectancy levels.
However, ravaged by absolute hunger
and poverty, locals from bordering
towns often have confused feelings
about it as many feel that any income
supersedes no income, a National
Park, or the environment.
A destitute and uneducated people,
these locals fail to understand neo-
liberal economics as the root of their
poverty. Coca, for instance, one of the
destitute towns bordering the Yasun
National Park, has demonstrated
impressive economic growth since the
1960s, when Texaco struck oil there.
In true capitalist spirit, the government
of the time took a hands-off approach,
boasting a growing employment rate
thanks to the private companys
interest in the land. The result, as
reported by Enrique Morales, Director
of Environment for the local provincial
government, has been an over-
dependent population on companies
causing the very deforestation,
contamination, and uncontrolled
immigration that maintains locals poor
and unhealthy.
The contaminated areas and the
excess waste were left to be attended
as a paying job, thank god by the
locals. Cleaning contaminated oil spills
(as much as 3,000 cubic meters a year),
digging trenches, and clearings roads
have become their life-savers.
It has also been widely recognized
by many circles in the world that neo-
liberal economic policies pushed on
the world by the IMF and the World
Bank, like for example the Washington
Consensus and the Structural
Adjustment Programs (SAPs), have
reproduced the conditions necessary
for poverty to take root and perpetuated
economic crises around the world.
To receive loans from these
institutions, countries have given up
tremendous amounts of sovereignty
and autonomy. Just like Canada was
pushed to make public spending cuts in
the 80s and 90s by the IMF to make the
country more business-attractive, poor
countries have historically agreed to
cut public spending on social programs
and give tax-cuts to wealthy individuals
to foment foreign investment, which has
caused local businesses to compete
with multinational corporations and
come out on the losing end.0
If globalization is indeed like an
avalanche engulfng us all, the worse
ones off have got to be the ones at the
bottom the Third World which will
most likely be saved last.
THE TOP, THE BOTTOM, THE
POWERFUL
Though the USSRs socio-cultural
experiment may have had its roots in
a Marxist notion of universal equality,
the beast grew so out of control that
it eventually confused equality with
uniformity. Because it sought to brutally
quell any sense of personal, creative
expression or dissidence, USSR
Socialism came to be internationally
recognized as a system of mind control
directed by oppressive dictators.
Today, our recognition that we are
all born with different mental and
physical capabilities, different interests
and, perhaps most importantly,
into different socio-economic and
political backgrounds, has allowed the
entrepreneurial spirit to soar and to
cause huge socio-economic progress.
And the Capitalist Economic System
thrives on this.
But what happens when this spirit
soars too high? What happens when,
in our consumerist society, individual
interests of those at the top trump
the individual needs of those at the
bottom?
Despite a global economic upsurge
in the last two centuries, the gap
between the rich and the poor
has paradoxically grown larger. It
seems the entrepreneurial spirit has
had a runaway effect, allowing few
individuals to consume, own and
control an increasingly larger share
of the economic pie than the majority
of the world does.
The World Bank Global Poverty
Estimate puts around 80% of the world
under $10-a-day living standards,
which includes much of the First World.
To put this in perspective: 76.6% of the
worlds goods are consumed by the
Top 20%, while the Bottom 80% shares
a dismal 14% of the world. In the U.S.
alone, the top 1% earns more than
the bottom 40%, part of why in 2009
almost 44 million Americans (nearly
15%) lived in poverty.
Inequality and polarization help
reproduce poverty. As the world
continues to adopt unfettered neo-
liberalism, a larger section of it fnds
itself in its throes. Indeed, a UN
Habitats State of the Worlds Cities
in 2008-2009 report found that India,
as many other Third World countries,
is becoming more unequal as a direct
result of economic liberalization and
globalization.
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School classroom in Haiti.
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ArbitrageMagazine.ca Fall 2011 13
Trends
The same report also found that
economic growth exacerbates poverty
in more unequal places rather than
reduce it. For example, in the U.S.
where its been proven that some
cities are as unequal as African and
Latin American cities social upward
mobility is damn near impossible.In
a study done by The Equality Trust in
2009, the U.S. was at the low end of
the spectrum for social mobility when
compared with 40 other rich countries.
In Scandinavian countries, according
to the GINI index, which measures
the equality of income distribution in
a nation from 0 to 1, the equality rates
are around the 0.23 mark, placing them
near the top of the same graph.
In todays unequal societies, the
higher echelons have created their
own communities, their own schools,
their own health centers, their own
shopping malls, all in an attempt to
maintain separated from those of the
lower classes, whom the former fear
may at any moment harm or rob them.
This has vital psychological effects.
The lower classes may foster feelings
of resentment, of inferiority and even
of antagonism, which as many studies
have proved can and does lead to
higher rates of poverty and crime.
The answer is not in gating ourselves
off. As Michael Camdessus, the
former head of the IMF and a hard-line
conservative suggested, the widening
gaps between rich and poor is morally
outrageous, economically wasteful and
potentially socially explosive.
Particularly explosive is the effect
that inequality has on access to life-
opportunities. Despite the fact that we
are all humans with the same rights,
concentration of wealth and inequality
drives a wedge between the elite and
the layman, and it gives the former
more access to life opportunities than
the latter.
Though various sources have
undisputedly proved that education
and health are imperative to socio-
economic progress, access to these
two continues to be the hardest thing
for poor people to have. A Business
Week Magazine article reported in
2002 that the U.S. ranked 10th out of 17
industrialized countries in literacy rates,
part of why there is so much inequality.
The same article reported that the
largest chunk of those people who
had no access to education or to very
poor education were visible minorities
and new immigrants precisely two of
the poorest groups in that country.
In another article in the Street Level
Consulting Ltd. website, a study from
Kevin Lee, from the Canadian Council
on Social Development, is cited,
concluding that persons with less
than high school education were more
likely to be poor than those with a post-
secondary level [of] education.
The blow is 100-fold in the Third World
because as a Rural Poverty Report
2011 states, although urbanization has
historically been on the rise, poverty
remains largely a rural problem, and a
majority of the worlds poor will live in
rural areas for many decades to come.
This is the case in Ecuador, where
the largest segment of the countrys
population includes peasants and
subsistence farmers, informal sector
vendors and agribusiness employees.
President Correas administration is
fghting to bring education and health
centers to these historically ignored
areas as well as the favoritism shown
to urban schools over vocational and
manual skills schools when it comes
to public funding.
Because where Economic Power is
concentrated so is Political Power, and
against a global background of political
bickering, those with economic power
seem to have the greatest leverage.
As such, the privatization of most
services and programs has been on
the rise, including education and, in
a tentative move not yet solidifed in
Canada, health, too.
The access to education in
industrialized nations is getting ever
more diffcult. ln Canada, a four year
university degree in say, Political
Science, will cost around $25,000
$30,000; depending on the program
and the institution, the cost can go
up to $80,000 $100,000. In London
and other parts of Europe massive
and often violent protests have broken
out because of austerity measures
implemented to alleviate the economic
blows theyve suffered measures that
ultimately affected students, amongst
other parts of society.
If indeed the knowledge economy
is on the rise and in effect generating
higher paying jobs requiring more
acute levels of knowledge and skills,
the number of people that are able
to access these jobs is decreasing,
and most of those who can access
them must indebt themselves and
their families for the better part of their
life.
Against this background it is hard
to envision any progress in the feld of
education and health - specifcally, in
making them more accessible to people
so that they may pull themselves out
of poverty until a radical approach
to it is taken.
In the spirit of true cooperation
political, economic and social it would
bode well for the Western Capitalist
World to observe and pick some of the
best aspects from their lifelong sworn
enemies, and for the re-emerging 21st
Century Socialist Bloc to return the
favor.
!"#$%&'#()*+,+-.#/*0)1#2+3&+)#4-&5.*
Fall 2011 ArbitrageMagazine.ca 14
Very High (Developed Countries)
High (Developing Countries)
Medium (Developing Countries)
Low (Developing Countries)
Data Unavailable
Trends
!"#$%&'#()*+,+-.#/*0)1#2+3&+)#4-&5.*
Human Development
Index Category of
Countries in 2010
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LEARNING TO DANCE
TOGETHER:
DRAWING LESSONS AND
CONCLUSIONS
REAL PROGRESS IN THE LEFT
In the 21st century, the Latin
American continent has fnally begun
to work together after centuries of
regional conficts stemming from racial
and political prejudices. Yet, sadly,
because of that political separatism,
clear and evident advances made in
that part of the world are obscured,
undermined and, in the most extreme
cases, outright denied.
As we saw above, despite the gradual
progress that Ecuador has been
making in terms of reducing poverty
and providing more social security to
the most vulnerable groups of society,
fgureheads like ex-presidents continue
to undermine the progress, calling
the president a cunning liar and in the
process bashing Venezuelas progress,
as well.
But claims that there is no democracy
in Venezuela have been continuously
debunked under overwhelming evidence
of the contrary. After 12 elections
since 1998 (including referendums
and presidential elections) that have
all echoed the peoples wishes in the
returning/continuation of President
Hugo Chavez, the claim is simply a
bad joke. In an article written in Foreign
Affairs Magazine, a report is cited
from the United Nations Economic
Commission for Latin America and
the Caribbean, where it is stated that
between 2002 and 2006 Venezuela
decreased poverty by 18.4 percent
and extreme poverty by 12.3 percent.
The fact is that the 44% fgure of
government spending in 2007, coupled
with massive contributions that the
state-owned oil company, PDVSA, has
committed to the country, including
$1.7 billion in 2007 for social programs,
have propelled the nation forward.
(And if were talking reinvestment
into the country, Canadas very own
Newfoundland has helped to cut its
poverty levels by half (to 6.5%) precisely
with royalties from oil and mining
companies.)
Similarly, the claims that Ecuador is a
dictatorship also crumble in front of the
evidence. As mentioned above, since
President Correas administration took
power, $15+ billion have been reinvested
in the country, reducing poverty slowly
though gradually. Also, in 2011 just
over 15% of the nations GDP rather
than half goes towards paying a foreign
debt it claims has amassed through
SAPs and adherence to the Washington
Consensus; the rest is reinvested into
the country. Unemployment rates
have dropped and currently reside at
5%. And with the state funding post-
secondary education, the literacy rate
is now at an impressive 91% of the
population.
The Cuban Socialist Model has also
made great strides forward. Rather
than focusing on economic growth
alone as a determinant of social
progress, the government has stressed
the importance of social development
policies and the Central Role of the
State in implementing and enforcing
them. Though the Cuban government
has been widely criticized around the
world and denounced by many as a
dictatorship, the country has made
impressive steps forward in terms of
reducing absolute poverty, providing
social security and, most importantly,
creating a society where all individuals
share an aspiration to equal outcomes
despite their income levels, precisely
because of the level of access to all of
societys services, such as education
and health, and the ability to voice their
opinions at local committees.
Under the Human Development Index,
Cuba has gradually been climbing since
1998 and is currently 50th, meaning it is
among highly developed nations. In the
Human Development and Equity Index,
Cuba is among the top fve countries
in Latin America and the Caribbean.
In the 1990s, as the USSR and most
of the Socialist Bloc lost momentum,
Cuba went through what is now
known as the special period an
era of tremendous economic hardships
that saw the re-emergence of relative
poverty, something that since the
Revolutions triumph in 59 had been
practically eradicated.
ArbitrageMagazine.ca Fall 2011 15
Trends
UNDP
Human
Poverty Index
!"#$%&'#()*+,+-.#/*0)1#2+3&+)#4-&5.*
The volatility of the next years,
coupled with the illegal economic and
commercial embargo that the United
States has sanctioned on Cuba since
practically the outset of the Revolution,
exacerbated the problem. People
nevertheless had access to doctors,
particularly the rural areas where after
the revolution a medical center had been
built in practically every sector of the
country, even in the remote mountains;
they still had access to free education;
and food was provided to a certain
extent by the State. Things were tough,
defnitely, but manageable because
of the social spending that provided
safety nets for people displaced or
simply not able to fnd work. According
to the UNDP Human Poverty Index, in
2007 the people below the poverty line
were at 4.7%, down from 5.1% in 1997.
Unemployment was at an impressive
(and continues to be below) 1.9%, down
from 7.1% in 1997.
The government had also pledged
to reduce the rate of hunger by half
between 1990 and 2015, and followed
through by increasing the food
availability between 1999 and 2003,
from an average of 3007 kilocalories
to 3165 per capita per day, effectively
bringing the malnutrition rate down to
2% of the population. By 2007, the
food levels had increased by 37% and
the protein levels were increased by
25% thanks to government farming
programs.
Social programs also see to it
that the most vulnerable groups of
society children, women, elderly
and the disabled never go without
food. Indeed, through the entire
country not a single person lives on
the street or goes hungry any night.
Cuba has perhaps the best health
record in the world, and some of the
best professionals come out of their
free education system which allows
anyone who wants to enter and who
has high enough grades to do so.
The government increased the
number of Municipal Universities during
this period by 700. For those who dont
get into universities, the government
has built vocational and trade schools
all over the country, particularly in
remote, rural areas. For instance,
a new program called Superacin
Integral (Integral Advancement) has
been implemented around the country
so that anyone from 18 to 29 years of
age that is not working or attending
school can learn computer or other
vocational skills.
Income redistribution has also played
a key role in Cuban society. Apparent
in the GINI Index is the fact that equality
among people has risen, being at 0.56
in 1953 and 0.22 in 1986; the special
periods economic reforms caused the
fgure to rise to 0.33 in '98. Factors
like the declining purchasing power
of salaries due to price hikes, the
introduction of the double currency, and
the dual market system with different
prices, currencies and qualities of
product, amongst others, contributed to
the rising inequality in the country. Also,
income sources became diversifed
and salary scale gradually separated
from work effort. Inequality in terms
of material well-being had begun
surfacing.
Fall 2011 ArbitrageMagazine.ca 16
Trends
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Cuban
children
in Cuatro
Caminos.
SHORTCOMINGS ON THE LEFT AND
COACHING FROM THE RIGHT
In a study cited in the Journal of the
Research Group on Socialism and
Democracy, a sociologist Mayra Espina
found that:
Without producing a mechanism for
restoring the relations of exploitation
or of private property on a large
scale, the Cuban [90s] reforms
|ed to |e-st|at|hcat|on, o|ov|d|ng t|e
context for the growth of poverty as a
social problem, the expansion of the
at-risk segments of the population,
and a general trend of widening
socioeconomic inequalities.
Economist Viviana Togores is also
cited, who found that about 49% of
the Cuban population fell under the
category of income-poverty when
measured under a Baskets of Goods
approach. Unemployment is at a mere
1% as of 2008, so this has nothing to do
with it. Nominal wages have not kept
up with increases in consumer prices
this is the main reason. Coupled with
other hardships, such as having too
many dependents and on the levels of
inequality that lamentably still exist in
the country also add to the fre.
The University of Havana has found
that there are inter and intra regional
inequalities, like for example the quality
of housing, access to consumer goods
and some social services, and in
respect to the level of socio-economic
development provided to some
regions over others. It further states
that a large part of these problems
are caused by spatial inequalities
inherited from before the Revolution
and because of controversial and
faulty economic reforms taken in the
1990s. ln any case Togores' study fnds
that the redistributive effect of social
expenditures in education, health,
social assistance, etc. while it does not
compensate for the loss of purchasing
power, does have a favorable effect on
the population, especially those in more
needy sectors.
And that is perhaps Cubas main
lesson to export a commitment to work
from the ground up, to help develop the
poorest individuals frst. The safety net
provided for workers and their families
and for people whose needs arent
being met because of health reasons,
has grown stronger over the decades
and has helped to sustain a healthy and
educated society, albeit taking small
economic strides forward.
In 2007, for instance, out of 11+ million
Cubans, social security benefciaries
were 1,571,924, and the number of
people receiving social assistance was
at 595,181. Contrary to what most of
us believe in the West, this does not
create lazy people asking for hand-outs
from the government. Some Cubans
who receive assistance still work, but
need the assistance in the face of the
economic hardships. Others cannot
work due to health circumstances.
Under the administration of Raul
Castro new steps have been taken to
open up the markets a bit more. A
reform to allow the setting up of small
businesses which do have to pay
a tax and which looks to reduce
unnecessary bureaucratic power in
the country has recently been passed.
The main objective is to reduce
the governments roles in areas of
agriculture, retail and construction.
The buying and selling of automobiles
and homes is also being discussed.
The vision is to allow small, private
businesses to step in and inject a
much needed jolt into a stagnating
economy. In an attempt to reverse the
separation of salary-scale from work-
effort, farmers no longer receive equal
pay from the government, but rather
moral incentives have given way to
productivity-related pay, according
to a BBC article. Over 8,000 plots of
unproductive state-owned land are
now being leased to individual farmers.
The important thing is that the steps
being taken to open up the economy
maintain Human Development at their
core. The notion of Moral Obligation
over Individual Enrichment has been
fundamental in the educational system
of Cuba. Concerns from all sides of
the political spectrum often warn of
the potential for the inequality and
concentration of power of which weve
spoken to arise because of these
reforms; but as I spoke with many
Cubans, the general feeling was one of
visible confdence in the sustainability
of the values and social development
that the Revolution has made possible.

ArbitrageMagazine.ca Fall 2011 17
Trends
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There are other parts of the world that
have also shown impressive Human
Development records and that have
reduced the level of inequality and
of poverty to record-low levels. The
Scandinavian countries, for instance,
have been historically revered for not
only their neutrality but also for their
commitment to social programs and for
the high standard of living that practically
everyone enjoys. Redistribution of
income levels are in big part to thank
for this.
Income equali ty across the
Scandinavian countries has, in average,
brought everyone to the same level-
playing feld, therefore giving them all
access to the same opportunities. China
also has strong social institutions that
offer the most vulnerable sectors safety
nets to keep from falling into absolute
poverty. Of course, the democratic
record in the country is questionable,
but the fact that people in China do have
access to more social assistance than
we do here is undeniable.
Given the magnitude of the economic
growth the last couple of centuries
have been endowed with, the global
poverty that continues to exist is
appalling. In this new age and in
these dire circumstances it is time
for us to divorce ourselves from political
prejudices and past antagonisms
that hinder any compromise and any
progress.
Currently, the United States is a prime
example of what happens when two
opposing political ideologies solidify a
concrete wall between them and neither
side can get through. As things stand,
it seems the President has fully caved
in to the Republicans as the so-called
balanced approach seems to only cut
nearly $3 trillion in social programs while
refusing to raise any revenue by taxing
the richest individuals in the country. If
working together is what is prescribed
for the world to reduce poverty, looking
at current U.S. politics may be the most
venomous drink we can take.

Some poets believe that only through
constant personal turmoil and emotional
agony can their creative-self emerge.
The world is reaching such poetic levels
of poverty and insecurity that time has
come for its inhabitants to work together.
Long has it been since we realized the
Economic Prowess that Capitalism
boasts; long has it also been since we
witnessed the Juggernaut that Soviet
Socialism was. But in this new century
of hope and progress, it is due time
for us to realize that where the former
fails in social development, the latter
compliments it; and likewise, where
Socialism impedes economic prosperity
and individual growth, Capitalism picks
up the tab.
!"#$%&'#()*+,+-.#/*0)1#2+3&+)#4-&5.*
Fall 2011 ArbitrageMagazine.ca 18
Trends
!"#$%&'(()#*%(#*+,-.#/-,00#1&'-)&
Resolving internal issues and private sector
assistance may be the key answers to African growth
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Rethinking
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ArbitrageMagazine.ca Fall 2011 19
Trends
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*
oday, Africa represents one
of the most economically and
politically underdeveloped
regions of the world. The
continent's sluggish
development pace can be attributed to
its dark legacy of post-colonial conficts.
In the past, the independence of
many African countries brought about
weak and failed states with dysfunctional
economies compounded by bad
governance, poor political leadership,
and governmental corruption.
Approximately 40 percent of
its population today is considered
extremely poor, with individuals living
on less than US$1 a day. The number
of people living in extreme poverty has
almost doubled from 1981 to 313 million
in 2001.
It can also be safely concluded
that countries that experience low
economic growth and high levels of
inequality are more likely to witness
violent conficts. One doesn't have to
look further than the besieged nation
of Somalia to understand the pressing
need for development on the continent,
with development being the key to
overcoming violence, while ensuring
peace and security throughout Africa.
But in what ways will Africa develop?
More specifcally, in what ways can it
successfully develop given the myriad
of strategies out there?
One of the most popular and traditional
methods of addressing development in
Africa has been offcial development
assistance (ODAj, which consists of
fnancial loans from international donors.
ODA has undoubtedly bailed African
countries in times of crises and has
assumed importance within the UN
MDG Programme as well as during the
G8 Gleneagles Summit in 2005.
However, according to certain
academics, such as John Kirton,
head of the University of Toronto's G8
research group, aid and debt relief do
not necessarily deliver development.
lnstead, ODA may pose the problem
of rendering countries dependent on
international fnancial loans. For states,
such as Mozambique and Uganda, ODA
comprises of up to 40 to 50 percent of
the national budget.
When bad governance and
corruption two issues that plague
many African states are taken into
consideration, the benefts of ODA
seem even slimmer. Weighed down
by institutional weaknesses, limited
technical staff, accountability issues,
and transportation issues, many African
countries encounter several diffculties
in using ODA in a benefcial way.
So why is there an emphasis on
ODA, given its mixed track record?
According to Zaria Shaw, researcher for
the G8 research group, it's a question
of distance of geography. We are less
placed in Africa.We don't actually have
people on the ground to do the types of
projects, like the microfnance project in
Bangladesh. We're much more involved
physically in Asia and it's not so far
from us.
The Grameem Bank, or 'village
bank' in the Bengali language, to which
Shaw is referring to, is a microfnance
organization and social business that
essentially lends money to the poor, with
an easy way for the poor to repay their
loans. The Grameem Bank currently
provides 81,371 villages with fnancial
services all over Bangladesh.
For more than 33 years now, the
Grameem Bank has shown how credit-
worthy borrowers the poor are, which
makes it obvious that it has become
important to include them fnancially.
Such daring and creative social
businesses as the Grameem Bank
prove that businesses can be used to
solve problems rather than simply act
as proft-maximizing entities.
lnnovative fnancing methods would
undeniably beneft Africa's development.
Yet Shaw points to the post-colonial
backlash that has made it harder for
developed nations to work on a level
playing feld with African countries,
than with Asian countries, where the
post-colonial pressure was felt to a
lesser extent.
But Shaw believes that the shape of the
development model has changed, with
ODA taking a backseat to innovative
fnancing strategies. Development
strategies have changed not so much
because of a catalyst, but because
we've tried everything and certain things
don't work", states Shaw.
So where do we go from here?
According to Shaw, the private sector
will become increasingly involved
in aspects of Africa's development.
Similarly to the Grameem Bank,
pioneering companies around the world
are beginning to include the poor as
full economic partners.
ln Africa, one of the largest soft-drink
bottlers, Coca-Cola SABCO, is working
carefully to bring its products to markets
all over the continent. In many countries
of East Africa, the company has adopted
a distribution model that involves
working with independently owned,
small-scale distribution companies,
which employ bicycles and push-carts
to transport its products to areas that
are not accessible by truck.
The advantages of this system
can be seen through the
creation of more than 12,000
jobs in East Africa, taking in
$500 million in annual revenue.
Considering that social businesses
and private companies are able to
beneft the livelihoods of countless
individuals, the international community
should now make it a priority to build
upon these pioneering efforts.
Another way to achieve greater
development in Africa is through trade.
According to Shaw, trade has always
been our vehicle of choice for peace and
prosperity. Yet Africa currently faces
certain roadblocks and barriers to EU
and American markets. As it currently
stands, African nations are incapable
of competing in world markets, or
of moving their products effectively
in order to take advantage of these
markets.
While opening up markets will surely
bring about advantages to African
countries, freer trade must be backed
by appropriate governance polices, and
issues of corruption must be addressed.
Change must therefore come within
African countries as well. As Shaw so
ardently put it, African countries must
frst and foremost root out the endemic
corruption. They must also build on
rudimentary infrastructure in order to
be a competitive trading partner. It can
simply be a matter of logistics they
can't get their products to market".
After all, some of the major areas of
concern for Africa are the very basics
Resolving internal issues and private sector
assistance may be the key answers to African growth
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Fall 2011 ArbitrageMagazine.ca 20
Trends
every country must address in order
to successfully develop. These include
inadequate infrastructure, poor and
corrupt governance systems, weak
health services, and unemployment,
to name a few.
By addressing the fundamentals
of state development, with the
simultaneous help of the private sector,
the continent of Africa may have the
chance to tackle more root problems
than it would be able to, were it to
depend strictly on offcial development
assistance and short-term loans.
Bibliography:
Adefuye, Ade. 2007. Africa and the G8:
political aspects." Pp. 143-51 in Financing
development: G8 and UN contributions.
Aldershot: Ashgate.
Charnoz, Olivier and Pierre Jacquet.
2007. What does international aid mean
to the G8?" Pp. 185-200 in Financing
development: G8 and UN contributions.
Aldershot: Ashgate.
Kirton, John. 2007. Energising sustainable
development: the G8's Gleneagles
performance." Pp. 53-78 in Financing
development: G8 and UN contributions.
Aldershot: Ashgate.
Lyman, Princeton N. 2007. The G8 Africa
Action Plan: how much of a partnership?"
Pp. 121-32 in Financing development:
G8 and UN contributions. Aldershot:
Ashgate. Yunus, Muhammad. Financial
Inclusion through Social Busineses, G20
The Seoul Summit (2010j: 128.
Thunell, Lars H. The Private Sector and
Inclusive Business Models, G8 G20 the
2010 Canadian Summits (2010j: 102.
Kaberuka, Donald. Reforming Financial
Systms and Insitutions: Modernizing the
African Devleopment Bank," G8 G20 the
2010 Canadian Summits (2010j: 110.

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Fall 2011 ArbitrageMagazine.ca 67
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Trends
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Somalias famine brings issues of global
poverty to the forefront
The recent famine in Somalia brought
the fate of eighty percent of the
worlds population to the spotlight.
With catastrophic events such as
this famine, poverty resurfaces yet
again in the global consciousness.
A consciousness that is mostly
preoccupied with the rapid advances
of its more exciting urban economies.
Questions are then raised on the
prevalent quality of poverty and the
horrors of its consequences. The
causes of poverty are manifold. War,
disease, famine and unemployment
being the big players. What steps can
then be taken towards addressing
the massive social issue of global
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ArbitrageMagazine.ca Fall 2011 23
Trends
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EMPLOYMENT GENERATION
Carefully and extensively planned employment programs
funded by the government can spur growth in jobs. Industries
requiring substantial labour forces can also be given
signifcantly larger aid from the government. Focus should
be placed on developing companies that offer sustainable
and long-term jobs to the community. Companies should
also budget suffciently for employee training and related
community programs, so that employees and prospective
employees can keep their skills relevant and up-to-date.
DRAWING ON VARIOUS SOCIAL INSTITUTIONS
TO FUND POVERTY FIGHTING PROGRAMS E.G.
CHARITIES, RESEARCH INSTITUTIONS, U.N. , NON-
PROFIT ORGANIZATIONS, UNIVERSITIES.
Money funnelled from every organization available adds
up to powerful sums that can produce tangible change.
When organizations develop an interest, albeit vested,
they tend to be more strongly motivated. Organizations
that have a concrete goal to achieve with strict project
plans are able to effciently concentrate their efforts into
producing change. For this reason charities with numerous
middlemen organizations should be discouraged to ensure
money reaches those in need. Importance should be given
to organizations that follow the teach a man to fsh ideology
rather than the give the man a fsh one, unless in extremely
dire emergency circumstances.
TRANSPARENCY IN GOVERNMENT SPENDING
Where and how a government chooses to spend taxpayers
money and its own revenue should be visible to the
media and the common man. This makes governments
accountable for their actions and inaction becomes easier
to pinpoint and address. It also discourages corruption in
government systems. For example, transparency will be
especially benefcial to civilians whose government might
be allotting money to its nuclear weapons program instead
of to its poverty programs.
CANCELLING IMPOSSIBLE TO REPAY WORLD DEBTS
Many developing countries are trapped in the cycle of
constantly repaying debts that are impossible to pay off.
This ensures that they never get a chance to develop and
become self-suffcient. The priorities of these countries are
therefore unnecessarily skewed and the citizens of these
debt-ridden nations are devoid of any hope for a better
future.
PRIORITISING PROGRAMS THAT TARGET
FUNDAMENTAL HUMAN RIGHTS
Every individual should have access to housing, food, clean
water, healthcare and electricity. Technically governments
should only move on to other projects after they have made
sure that programs that provide these basic amenities to
their people are up and running. This might prove to be the
hardest step yet.
TAXING THE RICH MORE AND THE POOR LESS
Redistribution of wealth will be an imperative step in
eradicating poverty. The rich get richer while the poor
get poorer. Taxing methods need to be tailored to an
individual's fnancial bracket to ensure that upward social
mobility becomes an absolute possibility.
BUILDING SELF-SUFFICIENT ECONOMIES
Creating reduced dependence on oil, external fnancial
aid and imports will help to ensure that alleviation of
poverty remains on an upward but permanent curve,
as opposed to a temporary revivalist injection in a dying
economy. Steps in this area include investment in local
infrastructure, transportation and schools that keep the ball
of development rolling. Projects to launch new industries
and businesses will also need monetary encouragement.
EDUCATION
As much as poverty is a social condition it is also a mental
and psychological cage. With education, impoverished
populations are able to visualise their way out of poverty
and are able to work towards it in an organised and
reliable manner. Education provides training to tomorrows
workforce and thus fortifes the economy against poverty.
Education in rich populations about poverty invokes
sentiments of compassion and a sense of responsibility
to the misfortunes of the rest of the world. Education also
has the power to bring about social changes such as fghts
against racism and sexism - both conditions that happen
to be linked intrinsically with poverty.
INVOLVEMENT OF THE MEDIA
The media has the power to draw the eye of the global
conscience to issues of poverty. It becomes too easy
to forget the state of the less fortunate when the world
is advancing at lightning speed. With effective media
coverage of poverty-related catastrophes, the demand for
social change rises collectively all over the world.
MICROFINANCING
Microfnancing makes fnancial services like insurance,
savings and loans available to individuals in developing
nations who wish to run their own small businesses.
These individuals, suffering from lack of employment
opportunities and fnancial backing from governments or
banks, are able to create a proftable means of survival
through microfnancing. Flourishing small businesses, in
turn, create jobs, provide much needed services to their
communities and help stimulate the economy for the long
run.
The path to fghting poverty is long and chock full of
hurdles. There is a lot of work to be done and not a single
second to waste.
Fall 2011 ArbitrageMagazine.ca 24
Biz Start Up Trends
By Exequiel Bertaina, Staff Writer
On August 5th 1965, after enduring
two years of intense friction with
the Malayan central government in
Kuala Lumpur, Singapore declared
its independence and became the
Republic of Singapore. Singapore
chose to maintain a certain social and
cultural distance from their neighbouring
countries by deliberately developing
a new and distinctive 'Singaporean'
culture and social identity. By late 1989,
though they had a small population,
Singapore established itself as an
economic giant. At present, it is a
multicultural, modernized and orderly
country, with its major cities being
populated by a mosaic of individuals
hailing from Chinese, Arab, Malaya,
ndian and English backgrounds.
Economic Reform:
The components that propelled
Singapore's success were comprised
of major reforms in every aspect of
the country. The central government
was aware of the need to develop
policies that would enable Singapore
to attract investors and business, so it
instated policies that would promote
international trading and ensure
economic development.
Education Reform:
n 1979, the educational system was
overhauled, with one of the primary
goals being to decrease the dropout
rate and to help those with low academic
performances leave school with some
marketable skills. The schools now
operate on a modified British-style system
in which the main qualifications are
equivalent to the Cambridge University
General Common Entrance Examination
levels. The primary language of instruction
in schools is English, while varieties of
distinctive dialects (of Chinese, ndian
and Malaysian background) hold primacy
at home, where traditional practices and
language customs are still prominent.
n 1987, Singapore's school system
saw further reform when 4 percent of
the gross domestic product (GDP)
was devoted to education, but the
government's goal for the 1990s was
to increase spending to 6 percent of
their GDP, which would match the levels
of Japan and the United States. While
education was not obligatory in Singapore,
records suggest that attendance is nearly
universal. Primary education is free and
citizens receive free education until they
reach university. There were special
funds available to ensure that no student
dropped out because of financial need
and they even created a system of loans,
bursaries and scholarships for superior
academic performance.
ndustrial Legacy:
When Singapore separated from
Malaysia, the Singaporean industrial
sector was miniscule. n 1960, it was
a mere 11.4 percent of the GDP and
commerce was by far the largest sector,
which accounted for 32 percent of the
GDP. n the late 1950s and early 1960s,
the country began implementing new
policies to promote industrialization.
Singapore adopted several new import/
export policies, including the 1967
"Proclamation of the Export Expansion
ncentives Act and the 1968 "Employment
Act. These policies ensured that direct
foreign investment was viable, allowing
Singapore to become a serious contender
on the international market. Throughout
the 1970s, various programs were
implemented in order to encourage
the growing industrial structure and to
accelerate the country towards higher
skilled, more technology-driven and
higher valued economic activities.
Technological Development:
With government support in the
1970s, Singapore's technological
industry began a calculated transition
away from labour-intensive products
and towards the development of more
technologically advanced production
facilities. The National Computer Board
was created in 1981 to help establish
Singapore as an international center
for computer services. n addition,
it reduced the shortage of trained
computer professionals and assured
that high-tech professionals trained
in Singapore had skills that were
competitive on the international job
market.
n order to ensure the continued
health of the technological sector, the
Singapore parliament passed its first
copyright law in 1986, to restrict the
manufacturing and selling of black
market goods. Laws, such as these,
were important in order to avoid trade
sanctions by the western markets. Such
measures also ensured that international
computer and software companies
would continue to do business with
companies based in Singapore.
Manufacturing:
By 1988, the Singapore manufacturing
sector was producing more economic
returns than both the financial and
business sectors. A large component
of the success of the manufacturing
sector lies in Singapore's success
endeavour to encourage foreign and
international investment in Singapore-
based companies. The manufacturing
industry was increasingly in the forefront
of technological innovation because of
the Economic Development Board's
promotion of computer-controlled
production, industrial robots and flexible
manufacturing systems.
Singapore: A Future Economic Powerhouse?
How Singapore blossomed into a world-class economic example
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ArbitrageMagazine.ca Fall 2011 25
Biz Start Up Trends
By Exequiel Bertaina, Staff Writer
To a lesser degree, domestic
enterprises also played a role in the
continued industrial growth of Singapore.
As the Singapore government believed
that an emphasis on large international
companies would effectively increase
productivity and long-range economic
development, major government-
sponsored promotional efforts were
put into practice, with a focus on higher
productivity projects.
The Petroleum Factor:
Petroleum and petrochemicals are
among Singapore's main industrial and
economic sources of wealth. In the late
1980s, Singapore was the worlds third
largest oil-trading center and the center
for refning petroleum. Additionally, it
was the second largest builder of drilling
rigs. Their facilities for repairing and
maintaining existing rigs and tankers
were among the most competitive in
Asia. In 1981, when oil prices began
to fall, Singapore felt both negative and
positive consequences.
The collapse of oil prices dealt a
severe blow to oil exploration. The
impact was felt widely and immediately
in everything from reduced orders for
rig construction to lowered occupancy
of luxury apartments as foreign
petroleum workers returned home. Their
vulnerability was based on their heavy
dependence towards outside markets. It
led to the leaders of Singapore in fnding
a way to buffer their countrys response
to perturbations in the world markets
and to take advantage of their country's
ability to respond to changing economic
conditions. Unable to control so much
that affected their nation's prosperity,
they concentrated on those domestic
institutions that could be controlled.
The consequence was an economy
characterized by a seemingly paradoxical
adherence to free trade and free
markets, in combination with a dominant
government role in macroeconomic
management and government control
of major production enterprises.
One other beneft from the fall in oil
prices included the availability of cheaper
energy. Similarly, refneries were able
to invest in equipment and technology
necessary to enable them to refne a wide
variety of crude oils to obtain a greater
proportion of high valued products from
the refning process. Petroleum refning
alone made up 28 percent of Singapore's
manufacturing output in 1985, although
by 1988, it had dropped by half because
of a decline in petroleum production and
growth in other industries. Singapore
also benefted indirectly when large oil
importers, such as Japan and the United
States, obtained higher real incomes
from lower oil prices, enabling them to
increase their imports from Singapore
and other countries.
Likewise, the extraordinarily high
domestic savings rate provided fnancial
reserves, which enabled Singapore to
weather economic storms, such as trade
recessions, and generated a pool of
domestically controlled capital to serve
the long-term interests of Singapore.
However, since the high savings rate
was a result of carefully formulated
government programs, this included
a compulsory contribution of up to 25
percent of all salaries to a government-
controlled pension fund.
The government also operated a set of
government-owned enterprises and held
stock in additional domestic and foreign
frms. Government leaders, deeply aware
of Singapore's need to sell its services
in a competitive international market,
continually stressed the necessity for
the citizens to master high levels of skills
and to lower their personal wishes for the
good of the community. The combination
of devotion to free-market principles, the
need for internal control and discipline in
order to adapt to the demands of markets
ensured they would continue to progress
in the international markets.
Legacy:
Developing countries should take
notice that it takes time, patience,
perseverance and determination to
become a more important player in
the global markets. Singapore clearly
demonstrated this by gradually instating
well thought reforms. Another key aspect
of Singapores transformation was
government intervention and regulation
of the market and production sectors.
The government clearly had a long-term
objective, but adjusted its policies based
on current realities. During the oil price
collapse, the Singapore government
quickly realized that they needed to
be less vulnerable to market shocks.
Therefore, they reacted appropriately
by instating reforms aiming towards
the high-end manufacturing sector and
higher-skilled labour markets. While
the political atmosphere in Singapore
has been criticised for its laissez-faire
approach to democracy, its political
environment was a primary force in
helping to stabilize the economy.
What other countries should also learn
from Singapore is that political stability,
high level of education, open-market
policies, modernized infrastructures,
attracting foreign investor policies
and sustainable long-term economic
objectives are key elements to ensure a
countrys success in todays competitive
markets.
!
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Illustrations by
Fall 2011 ArbitrageMagazine.ca 26
FINANCE & ECONOMICS
Confounding Clich of Economic History
Role of Protectionism and Government in the US Economy (vs. the claim of free market economics)

Child Poverty & Canadian Economic Prosperity
Child Poverty in Canada, and how to reduce it.
Budding Investors
Introduction to Investment Opportunities for Students (TFSA).
Wall Street Destroying Weak Regulation by Purchasing House of Representatives
Donations by Wall Street hault all government legislations which call for economic reforms.
01
02
03
With another global economic recession looming, eyes have turned
we need to be educated on the relevant topics of today and what
burdens we can expect to shoulder. In this issue, we confront the
for students, and stay true to our theme by touching on the link
between child poverty Canadian economic prosperity.
04
FINANCE & ECONOMICS
onfounding Clich of Economic History
Role of Protectionism and Government in the US Economy (vs. the claim of free market economics)
Child Poverty & Canadian Economic Prosperity
Child Poverty in Canada, and how to reduce it.
Budding Investors
Introduction to Investment Opportunities for Students (TFSA).
Wall Street Destroying Weak Regulation by Purchasing House of Representatives
Donations by Wall Street hault all government legislations which call for economic reforms.
02
03
With another global economic recession looming, eyes have turned
we need to be educated on the relevant topics of today and what
burdens we can expect to shoulder. In this issue, we confront the
for students, and stay true to our theme by touching on the link
between child poverty Canadian economic prosperity.
04
f Economic History
nd Government in the US Econo
& Cana
n Canad



01
Co
Ro



02
FINANCE & ECONOMICS
Confounding Clich of Economic History
Role of Protectionism and Government in the US Economy (vs. the claim of free market economics)

Child Poverty & Canadian Economic Prosperity
Child Poverty in Canada, and how to reduce it.
Budding Investors
Introduction to Investment Opportunities for Students (TFSA).
Wall Street Destroying Weak Regulation by Purchasing House of Representatives
Donations by Wall Street hault all government legislations which call for economic reforms.
01
02
03
With another global economic recession looming, eyes have turned
we need to be educated on the relevant topics of today and what
burdens we can expect to shoulder. In this issue, we confront the
for students, and stay true to our theme by touching on the link
between child poverty Canadian economic prosperity.
04
FINANCE & ECONOMICS
onfounding Clich of Economic History
Role of Protectionism and Government in the US Economy (vs. the claim of free market economics)
Child Poverty & Canadian Economic Prosperity
Child Poverty in Canada, and how to reduce it.
Budding Investors
Introduction to Investment Opportunities for Students (TFSA).
Wall Street Destroying Weak Regulation by Purchasing House of Representatives
Donations by Wall Street hault all government legislations which call for economic reforms.
02
03
With another global economic recession looming, eyes have turned
we need to be educated on the relevant topics of today and what
burdens we can expect to shoulder. In this issue, we confront the
for students, and stay true to our theme by touching on the link
between child poverty Canadian economic prosperity.
04
f Economic History
nd Government in the US Econo
& Cana
n Canad



01
Co
Ro



02
Finance & Economics
By William Shaub, Online Editor
!
n d e r s t a n d i n g
economic theory, in
law and in principle,
requires a certain
. d l r o w e h t f o n o i t p e c r e p
One perception requires a thorough
understanding of the world as one would
like it to be. The other, which is perhaps
more in touch with reality, requires an
acceptance of the world as it actually is,
and for that, one must look to cases and
examples in history.
the realities of economic history in the
United States and elsewhere requires
major adjustments to what is called free
lead to what should be called really
existing free market theory, and this
is the economic theory that is actually
applied in practice.
For this, we can take a look at a rather
perplexing example a country that
supposedly developed based on
market principles and free
enterprise namely the
United States. In the
mid-18th century, the U.S
was one of the
ri chest
societies (in terms of resources) in the
world, yet it was pre-industrial.
Adam Smith, the supposed father
of modern economics, had advice for
the 13 colonies. Smith requested
precisely what todays economists
recommend to the third world,
essentially advocating that the U.S
keep to its comparative advantages and
. g n i c u d o r p t a t s e b s t i t a h w e c u d o r p
At the time, the U.S was most capable
then exporting it to England, all while
importing superior British manufactured
goods.
Perhaps unpredictably in the eyes of
Smith, the U.S gained its independence
from Britain, and proceeded to
completely ignore Smiths free market
advice. Under Alexander Hamilton, the
liberated colonies immediately set up
high protective barriers (such as tariffs)
to try to bar superior British textiles,
then later, British steel. This allowed
the new country to construct its own
manufacturing base under specialized
protective barriers and by other forms of
incredible state intervention.
A staple in American
manufacturing in the
19th century
was cotton,
which is
o f t e n
referred to as the fuel of American
industrialization. The U.S produced
cotton and became the worlds leading
cotton exporter following its elimination
of a massive indigenous population,
which according to Howard Zinn,
could have totalled thousands upon
thousands of Indians.
The conquering of almost half of
Mexico and annexation of Texas was
also in order, which was land needed
to monopolize cotton and bring
England to [their] knees, to quote the
Jacksoni an Democrats. The U.S.
then ramped up production of this 19th
century fuel through its development
of a slave society, which was followed
by the criminalization of black life for the
purpose of exploiting their labor.
Thus far, American society clearly
i ndustri al i zed i n opposi ti on, not
supposed adherence, to market
principles. Rather, by radical violation
of free enterprise undertaken to develop
(change) its comparative advantages.
A brief look at the 20th century also
reveals exactly this revelation, or the
concept that the U.S. did not develop
and modernize because of a devout
faithfulness to market principles.
Ronald Reagan is now considered
a champion of free markets, and the
1980 s a decade in U.S. history in which
According to a comprehensive review
of the Reagan era in Foreign Affairs
by Clyde Sanger, a Senior Fellow for
International Finance at the Council on
Foreign Relations, The postwar chief
executive with the most passionate
love of laissez faire, presided over the
greatest swing toward protectionism
since the 1930s.
Sanger noted some thematic irony,
namely that advocation of market
discipline is a tool used by those with
power, who manage to avoid the
ravages of the market as a result of
astonishing state intervention. Those
without power are then exposed to the
THE CONFOUNDING CLICH OF ECONOMIC HISTORY
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ArbitrageMagazine.ca Fall 2011 29
Finance & Economics
free market discipline, and are therefore
left with little, if any, protection from the
subsidized structures of power. This
theme is indeed quite dominant in
the economic history of the past three
centuries.
The Reagan administration was
following a common course of action
that has been in practice in the U.S.
. e c n e t s i x e e r i t n e s t i r o f ) e r e h w e s l e d n a (
However, modern neo-liberals have
shed new light on the free market theory
charade. In 1995, Newt Gingrich extolled
the victories of the free market and
methodically issued tough lectures about
the immoral culture of dependence of the
American poor and working people. He
did this while boasting rather proudly to
the business community (the Chamber
of Commerce) that Reagan had granted
more import relief to U.S. industry than
any of his predecessors in more than half
a century. In a scholarly review by Patrick
Low, a GATT secretariat economist,
he estimates that the restrictive effects
of Reagans policies measured at
approximately three times those of other
leading industrial countries.
A major piece of Americas dedication
to free market principles includes the
transfers of taxpayer funds to private
corporations, generally hidden under
. y t i r u c e s r o e s n e f e d f o s k s a m e h t
However, pretending that these
(purposefully) initiated transfers by the
Pentagon to private industry werent
economically effective isnt, in fact,
realistic. The U.S automotive, steel,
industries would never have been able
to survive international competition,
innovate or develop through research
without these fundamental violations
in market principles.
Whether this radical protectionism in
a state-guided mercantilist system is a
position worth advocating is perhaps
a worthy subject for debate, but its
usage is unquestionably in substantial
market theory in principle. Since our
analytical focus is centered on the world
as it is, our attention should be focused
on really existing free market theory,
or the economic theory that is actually
applied.
President Barack Obama, unlike his
predecessor, hasnt shied away from the
belief and acceptance that protectionism
. ) d e s i u g s i d y l d n u o f o r p d n a ( e v i t c e f f e s i
Of course, when his administrations
market interventions saved thousands
of General Motors and Chrysler in 2009,
American media commentators eagerly
termed them free market infringements
and giveaways to undeserving
corporations and the unions. However,
when President Reagan subsidized
an enormous amount of GMs capital
costs in the 1980 s to save the
companys management from a
massive restructuring bankruptcy, that
was simply necessary in the countrys
effort to save American industry.
In 2011, President Obama handily
announced a new federal project
free market policy has always been:
a joint effort by industry, universities
and the federal government to help
reposition the United States as
a leader In desperate need of
economic growth before his re-
election bid thats just one year and
half away, the U.S President turned to
the application of what existing free
market economic theory has always
been: an incredibly confounding
clich.
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By William Shaub, Online Editor
April 2011 ArbitrageMagazine.ca 30
Biz Start Up Finance & Economics
!"#$%&'()%*#+,*-.#/'*00#1)%'2)
+
urrently, almost half of
the worlds population
lives on less than $2 a
day, while approximately
14 million children under
the age of fve will die from malnutrition
in 2011.
When most individuals in North
America think of child poverty, they
conjure the televised images of children
in far away countries, standing with
bloated bellies and empty eyes. While
this image is certainly one of the many
faces of child poverty, the majority of
Canadians are unaware that child poverty
exists, and is indeed prevalent in Canada.
Despite the relative economic and
fnancial security enjoyed throughout
Canada, over 15% of Canadian children
live below the poverty line. The standard
criterion that determines the severity of
child poverty focuses on a number of
factors: a lack of access to education,
inadequate access to nutritional food
and a shortage of available health
care. No matter how much those in the
developed world would like to be able
to turn off the television to avoid the
issue, its time to step up to the plate and
encourage government representatives
to strengthen focus on issues that
address child poverty in Canada.
In addition to there being a social
obligation to help end child poverty
in Canada, there are also economic
and fnancial benefts to reducing the
number of children who lack basic
resources (food, education, health
care). The Organization for Economic
Co-operation and Development (OECD)
reports that failure to tackle the poverty
and exclusion facing millions of families
and their children is not only socially
reprehensible, but it will also weigh
heavily on [a] countrys capacity to
sustain economic growth in years to
come.
For Grant Wilson, President of
Canadian Childrens Rights Council,
its a matter of political will or a lack
thereof, when it comes to the question
of ending child poverty. Despite ratifying
the UNCRC (United Nations Convention
on the Rights of the Child) two decades
ago, Canada has actually experienced an
increase in the child poverty rate between
the mid 1990s and 2005. Wilson notes,
For many families, it's very diffcult to
get out of poverty. There isnt enough
money to feed the children, clothe them
properly, or even enough money to pay
bus fare or look for a job.
Potential measures that may help
to alleviate the issue include the
implementation of offcial government
policies that address funding for on-job
training, the provision of low-cost or free
child-care and the introduction of tax
incentives for minimum-wage workers
For further inspiration on how to
alleviate the issue of child poverty,
Canada (and other countries) need only
look to a particular cluster of nations in
Northern Europe. The Nordic countries -
consisting of Denmark, Finland, Norway
and Sweden - have rated amongst the
top fve countries with the lowest child
poverty rate (under 5%) for the past
several decades. A primary reason
for this low rate relates to the effective
implementation of governmental policies
that seek to elevate children and their
families out of poverty. These policies
include generous time allocations for
maternity and paternity leave, job security
for families, and universal day care.
The goal of ending child poverty in
Canada is both strategically possible
and economically benefcial. More than
being a problem of moral signifcance, it
is also a matter of protecting the future
economic prosperity of Canada. By
helping the current generation of
children, we help to ensure the well-
being of future generations of children,
both in Canada and worldwide.
CHILD POVERTY AND
CANADIAN ECONOMIC PROSPERITY
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ArbitrageMagazine.ca Fall 2011 31
Biz Start Up Finance & Economics
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Biz Start Up Finance & Economics
By Betty Yan, Sta Writer
S
tudents often neglect to
invest because many of us
have a tight budget paying
for tuition, housing, food,
and so many other expenses.
Shouldnt investments be made when
we are able to set aside the necessary
funds? In reality, waiting to acquire
wealth and then invest is not the right
strategy. Being poor now is all the more
reason to begin saving for the future.
Even though most students do
not have the income to nance long-
term investment, there are still options
available. Putting your money in a
savings account is a start, but with
interest rates of less than 1% per year at
banks, this isnt the way to make your
money grow. A better alternative is the
Tax-Free Savings Account (TFSA), which
allows Canadians 18 years and older to
save up to $5000 annually and pay no
tax on investment income.
No tax on earnings generated from
the TFSA means you can build savings
faster. Unused TFSA contribution room
carries over to future years. So if you only
save $1000 this year you can save $9000
the subsequent year. You are also able
to make tax-free withdrawals and re-
contribute the amount you withdraw in
the following years.
The TFSA oers higher interest
rates than many savings accounts and
includes various investment options,
such as mutual funds, Guaranteed
Investment Certicates (GICs), stocks,
and bonds. These investments dier in
risk and prot, and it is a good idea to
have a mixture of dierent investments
to protect your savings.
A mutual fund pools money from
numerous people and invests it
according to the funds objectives.
Professional money managers make
decisions to buy and sell investments,
such as bonds and stocks. You purchase
units in the fund, and your shares rise or
fall with the value of the investments.
Mutual funds are not risk-free and
cannot guarantee returns.
Traditional GICs provide a secure in-
vestment that guarantees your principal
with a stated interest rate. You do not
need to worry about market uctua-
tions, making GICs more suited to short-
term investment.
When you buy a bond, you are lend-
ing money to a company so that it can
expand. The company in return promis-
es to pay you interest when your money
is returned. When you buy a stock, you
own a share in a company and the value
of your share depends on how well the
company does. Bonds tend to be less
risky than stocks because bondholders
know they can at least get their principal
investment back so long as the company
does not go bankrupt.
The investment market does
not have to be an intimidating place for
students. To open a TFSA, you can contact
your nancial institution, credit union, or
insurance company and provide them
with your social insurance number and
date of birth. Any amount of money you
are able to put away now will acquire
compound interest and make a positive
dierence for your future wealth, so get
started!
BUDDING INVE5TOR5
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Introduction to investment opportunities for students
Fall 2011 ArbitrageMagazine.ca
32 Fall 2011 ArbitrageMagazine.ca 32
Finance & Economics
ArbitrageMagazine.ca Fall 2011
33
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By William Shaub, Online Editor
Finance & Economics
Fall 2011 ArbitrageMagazine.ca
34
By William Shaub, Online Editor
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Wall Street Destroying Weak Regulation by
Purchasing the House of Representatives
Wall Street heavily donates to House Speaker John Boehner in an effort to destroy even the weakest regulations.
N
o serious person concerned
with banking regulation was
pleased with the end result of
the House Democrats 2010
legislative response to 2008's fnancial
crisis. Critics like Matt Taibbi werent
even remotely satisfed, describing the
Dodd-Frank Wall Street Reform and
Consumer Protection Act as a cop-
out, a Band-Aid on a severed artery...
representing the end of the best
opportunity we had to do something
real about the criminal hijacking of
America's fnancial-services industry.
The corporate legion on Wall
Street, however, severely disagrees
with Taibbi and the assertions of other
critics. Wall Street is quite concerned
about the reforms that Dodd-Frank
introduced, and its proving its point
by shifting resources from supporting
the old majority faction of the United
States one party system to the new
one: the House Republican caucus.
Specifically, New York hedge
fund, Paulson & Co., has contributed
$61,050 to House Speaker John
Boehners campaign since January.
Moore Capital Management LLP
employees proffered $53,000, and
Cantor Fitzgerald LP donated $45,000.
According to the business press
(Bloomberg News) not a single one of
these frms contributed to Boehner's
2010 election bid. Why donate to the
most powerful member of the House
now?
January happened to be the month
that the GOP controlled House voted
along party lines to cut the budget of
the Commodity Futures Trading
Commission, a bureau writing most
of the new derivative-trading rules.
The House Appropriations Committee,
led by Rep. Paul Ryan, voted to
limit funding for the new consumer
protection bureau. The consumer
protection bureau is also absent
a leader, courtesy of Republican
opposition to Elizabeth Warren and
now Richard Cordray.
In fact, financial firms are so
concerned about Warren, that theyve
picked up on rumors that she might
run against Sen. Scott Brown in
Massachusetts. Their response to the
rumors wasn't slight; the Huffngton
Posts Amanda Terkel pointed out that
they donated 16% of Browns total
campaign contributions for the second
quarter of 2011, which amounts to
about $320,000 in funds.
The author of what Taibbi perhaps
correctly deemed a cop out, Rep.
Barney Frank (D-MA), told the liberal
press that the opposition partys
refusal to fund the fnancial regulators
who are supposed to implement
Dodd-Frank is effectively destroying
the legislation. They cant do the new
duties. They cant even carry out some
of the old ones, he insisted.
Wall Streets extensive lobbying
against Dodd-Frank is strikingly
unprecedented. Former labor
secretary Robert Reich writes that
the six largest banks spent $29.4
million on lobbying last year, according
to frm disclosures - record spending
for the group. The Center for Public
Integrity has reported that the
Street and other fnancial institutions
engaged about 3,000 lobbyists to fght
Dodd-Frank - more than fve lobbyists
for every member of Congress and
have hired almost the same number
to delay, weaken, or otherwise prevent
its implementation.
Is taking the money out of politics
the way to limit Wall Streets control
of the government? Our problems run
deeper than that, although it would
certainly help. Campaign funding
totals are a remarkable indicator
of elections and policy, evidenced
by the intense lobbying that turned
Dodd- Frank from what the Wall Street
Journal originally called sweeping
regulation into a cop out.
The real answer remains clear:
break up the big banks through
democrati zi ng pol i ci es and
nationalize them to a local level by
giving stakeholders (employees) and
communities a role to play when major
decision-making must take place.
In essence, the market power of
economic giants must be reduced.
Without dismantling the concentrated
authority that allows them to
undermine democratic functions,
their political and fnancial power
will continue to subordinate John
Boehner, the Republican caucus, and
the rest of the U.S government. For
all that Dodd-Frank and its reforms
werent, they were something. Weve
gotten to the point where anything is
too much, yet the economic stakes
are atmospherically high, and future
stability for main street is in the
balance.
CULTURE
Livable Cities = Sustainable Cities
Sustainability a growing factor in a City's Livability Ranking.
Women's Human Capital
Loaded on Pills: How North America is Losing its War Against Depression
Over-dependence on drugs not the solution; leads to further depression.
Apple Nation: Follow the Leader
Apple's Genius Marketing and Impact on Consumer Culture.
Norway Retailers Pull Violent Games Off Shelves after Massacre
real life violence
01
02
03
20
20 20
we measure livability to exploring our social fascination with
society is today, even compared to a not-so-distant past.
CULTURE
Livable Cities = Sustainable Cities
Sustainability a growing factor in a City's Livability Ranking.
Women's Human Capital
Loaded on Pills: How North America is Losing its War Against Depression
Over-dependence on drugs not the solution; leads to further depression.
Apple Nation: Follow the Leader
Apple's Genius Marketing and Impact on Consumer Culture.
Norway Retailers Pull Violent Games Off Shelves after Massacre
real life violence
01
02
03
20
20 20
we measure livability to exploring our social fascination with
society is today, even compared to a not-so-distant past.
CULTURE
Livable Cities = Sustainable Cities
Sustainability a growing factor in a City's Livability Ranking.
Women's Human Capital
Loaded on Pills: How North America is Losing its War Against Depression
Over-dependence on drugs not the solution; leads to further depression.
Apple Nation: Follow the Leader
Apple's Genius Marketing and Impact on Consumer Culture.
Norway Retailers Pull Violent Games Off Shelves after Massacre
real life violence
01
02
03
20
20 20
we measure livability to exploring our social fascination with
society is today, even compared to a not-so-distant past.
CULTURE
Livable Cities = Sustainable Cities
Sustainability a growing factor in a City's Livability Ranking.
Women's Human Capital
Loaded on Pills: How North America is Losing its War Against Depression
Over-dependence on drugs not the solution; leads to further depression.
Apple Nation: Follow the Leader
Apple's Genius Marketing and Impact on Consumer Culture.
Norway Retailers Pull Violent Games Off Shelves after Massacre
real life violence
01
02
03
20
20 20
we measure livability to exploring our social fascination with
society is today, even compared to a not-so-distant past.
Biz Start Up Culture
!"#$%&'#())*+',-#(.'//#0+%.1+
Livable Cities = Sustainable Cities
ArbitrageMagazine.ca Fall 2011 37
Biz Start Up Culture
!"#$%&'#())*+',-#(.'//#0+%.1+
2
here are several surveys
conducted each year that
rank the livability of cities
worldwide. Companies
use these surveys to
determine how much they must pay
employees who are relocated to cities
with unfavourable living conditions.
Livability scores are based on numerous
categories, (such as unemployment
rates, housing prices, crime, healthcare
and culture) each of which are weighted
differently and receive a certain number
of points.
In the Economist Intelligence
Units 2010 Global Livability survey,
Vancouver was number one in part
due to hosting the 2010 winter Olympics
and Paralympics, which boosted the
citys scores for infrastructure, culture
and environment. Toronto came in
at fourth, and Calgary landed ffth
amongst other top-ten cities in Finland,
Austria and Australia. In Mercers North
America rankings, vancouver was frst,
Ottawa 14 th, Toronto 16 th, Montreal
21st and Calgary 28th, while worldwide
Vancouver was third and Toronto was
8th.
DEFINITION OF SUSTAINABILITY
A new defnition of what makes a
city most livable is now emerging:
sustainability. This was marked by
Mercers establishment of a new
category this year - best Eco-city -
based on water quality, waste removal,
quality of sewage systems, air pollution
and traffc congestion.
PUBLIC TRANSPORTATION FOR
HIGHER SUSTAINABILITY
In this category Calgary was 1st,
with Ottawa at 3rd, Montreal and
Vancouver at 13th and Toronto at 39th.
For high and low-ranking cities alike,
there remains room for development
in terms of the percent of employees
who use public transit and bike/walk
to work, and air quality ratings.
Some cities are setting notable
examples of how to tackle these issues.
The STM in Montreal recently won
the American Public Transportation
Associations award for Outstanding
Public Transportation System in North
America between 2007-2009. Since
2006, the STM gained 19.5 million
more rides. The STM, who are currently
manufacturing new metro cars in
Montreal, remains a good role model,
minimizing their carbon footprint with
a 60 % Canadian content requirement.
Another notable accomplishment in
the public transportation feld is BMW's
Inspiro subway for Poland - an energy-
effcient aluminum train that is 97.5%
recyclable. Such technologies are more
pertinent than ever with rapid climate
change and our current economy.
A recent Texas Transportation
Institute study at Texas A&M University
determined that in 2009 American
commuters spent 4.8 billion hours
of travel time and 3.9 billion gallons
of fuel, costing $115 billion. Another
study showed that New Yorkers save
$19 billion a year using sustainable
transport.
Most commuters who cycle to work
in North America are males under 25
years of age who dont abide by rules
for pedestrians or motorists (resulting in
accidents and deaths). Most American
cyclists over 25 fear being in a serious
accident. In Europe, equal numbers
of men and women, most of whom
are middle-aged, bike to work. These
bikers abide by rules of the road and
tend to bike slower.
Infrastructure in Europe has
increased the percentage of workers
biking to work. The Dutch have
invested in bike lanes with special
safety features, including separate
traffc lights for cyclists. The roads
are divided into 4 areas, including a
bike lane protected with its own curb.
The more safe biking conditions are,
the more appealing to potential users.
Proof of this lies in Montreal, where
a clearly designated bike lane (buffered
by a raised median) has turned the
province into the cycling capital of
Canada. The successful Bixi public
bicycle sharing system launched in
2009 and had its millionth ride less
than 6 months later. Now the system
has popped up in Ottawa, Minneapolis,
Melbourne, London and Toronto.
Fall 2011 ArbitrageMagazine.ca 38
Biz Start Up Culture
NEW CONCEPTS FOR GREEN
While policies are key to reducing
our carbon footprint, the best way to
get business owners on board is by
having incentives to test new concepts
for sustainable living. As a part of
Torontos Climate Change Action
Plan, which aims to reduce Torontos
greenhouse gas emissions by 80% by
2050, the city has implemented the
Eco-Roof Incentive Program.
The City won the Federation of
Canadian Municipalities FCM-CH2M
Hill Sustainable Community Award for
being the frst City in North America to
have a bylaw which requires green roofs
on new development, and provides
funding to developers. An Eco-roof
is one of two thingsa green roof
that supports vegetation or a cool
roof" that refects the sun's thermal
energy. Eco-roofs help reduce urban
heat, manage stormwater, enhance
biodiversity and improve air quality
and energy effciency.
NEW FUTURE FOR SUSTAINABILITIES
CITIES
Americans have adopted some
exemplary practices as well. California
has established a law which requires
building owners to disclose their
buildings energy ratings to potential
buyers and renters. The city hopes that
by having to disclose this information,
building owners will upgrade
their buildings energy systems to
raise marketability. California also
encourages cities to plan development
near public transit or with other existing
buildings in order to receive a portion of
the states $6 billion transport funding.
All new online energy in Austin, Texas
must be carbon-emission free, and
the city has developed a car sharing
program for workers who commute by
public transit or bike, but still need a
car on occasion.
Seattle has created a sustainable
on-site sewage treatment plant for a
residential project that cost less than
a traditional system. The sewer water
maintains a particular temperature in
order to create a thermal loop heat
exchange system that heats the entire
project.
To fare well in future livable-city
surveys, leaders will have to rely
on FIT (fully integrated thinking)
to develop the best strategies to
improve their communities. Local
and Federal governments will need to
be adaptable, creative and willing to
take risks to upgrade parks and water
quality, improve recycling programs
and research natural gas and other
green technologies. Some of these
changes are costly, but are crucial to
long-term stability. Plus, if changes
are left unmade too long, costs will
only increase.

!"#$%&'#())*+',-#(.'//#0+%.1+
ArbitrageMagazine.ca Fall 2011 39
Biz Start Up Culture
Fall 2011 ArbitrageMagazine.ca 40
Culture
!"#$%&'(#)*(%+(,-.(/#01(22#3%&14%
Give a man a fsh and you feed him
for a day. Teach a man to fsh and
you feed him for a lifetime. Chinese
Proverb.

5
his ironically accurate
proverb is proving to be
consistent within research
about the empowerment
of poverty-stricken women
through business, considering that
China is one of the countries taking
great pains to educate its female
population. Since microfnance (MFlj was
originally established to ensure that 175
million of the worlds poorest families,
especially women, receive credit for
self-employment and other fnancial
and business services,
1
it is heartening
to confrm that the various programs
are exceeding expectations. Studies
show that 84% of the 113.3 million
people receiving microloans in 2005
were women.
A woman that is disenfranchised,
homebound, and uneducated cannot
start a business, advise a policy,
or support her family. That woman
will not gain skills, knowledge, or
experience with handouts from non-
government organizations. But a study
published in World Development by Bert
DEspallier and associates states that
micro-fnancial investments in women,
more so than in men, proft from better
repayment performance, lower credit
risk, and a share-the-wealth mentality
that trickles down frst to families,
and fnally to larger communities.
This means that educating women
about business practices will end up
rewarding both investor and investee
more than handing out food or cash will.
In India, when educated, women
are more active and more productive
in the economy of their country.
Mens wage labor supply tends to be
6# #7778,&9%-9%4:&1;<,,&18-%=8
relatively unresponsive to increases in
education, writes Paul Shultz in his
book Investment in Womens Capital,
while women with more education
supply more of their time to market
work.
It has also been shown that countries
with stronger laws of education and less
gender disparity (like China) make the
most economic use of socially mobile
and educated women. No country with
a primary education enrollment level of
less than 10% has been able to improve
its Gross National Product (GNP), but
certain countries that have been able
to boost enrollment to 20-30% were
able to improve their GNPs at least
8% to 16%, writes G. Balatchandirane,
senior lecturer at the University of Delhi.
Investing in women, whether literally
with micro-loans or fundamentally by
providing education, will always pay off.
Teach a woman to read, and you have
a teacher. Give a woman an education,
and you have inspired a community.
Provide her with resources, and you
have enabled a thriving economical
entity.
INVESTING IN WOMENS HUMAN
CAPITAL
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S
miling sparse teeth, he looked
up in victory over the pool
table, with a shaved head,
black framed glasses, silver
earrings, and a tattooed arm
that read
"Product of Inuence."
Thats how Blaze Convict and
I met; I later found out his name is
Blaise Convey. One hot summer
afternoon, we were sucking on
beers. The phone rang. Blaise got
up and answered it; then, silence.
His brother had just jumped off of
the MacDonald bridge in Halifax,
Nova Scotia.
The suicide of Patrick
Convey, a major infuence in his life,
plunged Blaise into a massive wn
as Paxil. Launched in 1992 by the
pharmaceutical company SmithKline
Beecham, now GlaxoSmithKline
(GSK), Paxil is used to treat major
depression, obsessive compulsive
disorder, and anxiety.
On October 16, 2009, The
Globe and Mail reported that the
most popular antidepressants in
Canada are selective reuptake
inhibitors (SSRIs). Best known under
brand names like Paxil, Prozac,
and Zoloft, these drugs excite the
brain by releasing serotonin, a
neurotransmitter that contributes to
feelings of well-being. Paxil is the
most potent of these drugs and has
the shortest half-life of those in the
the SSRIs family.
According to IMS Health
Canada, a private company that
tracks prescription drug sales, 22.6
million prescriptions for SSRIs were
made in 2008, generating a total
of $1.05 billion for pharmaceutical
companies.
Like thousands of other Paxil
users, Blaise reacted terribly to the
effects of the drug. Bringing his
hands to his forehead, he laments, I
can barely remember what was going
through my mind, mostly because I was
completely blank or numb. I wasnt able
to feel a goddamn thing besides fear.
Dr. Srinivasan Pillay is a
world-renowned expert in stress and
anxiety, Clinical Professor of Psychiatry
at Harvard Medical School, and the
award-winning author of
"L|fe Un|ocked: 7 Revo|ut|onary
Lessons to Overcome Fear."
He believes that
"a good phys|c|an |s a|ways
uncomfortab|e when someone
|s under med|cat|on and never
overest|mates how much |s
known about a drug."
Paxil is known to have side effects
including, but not limited to: sexual
dysfunction, insomnia, sedation,
headaches, suicidal thoughts, and an
increase in birth defects. Wait, most
drugs are said to have some side
effects, right? Frighteningly enough,
however, it gets worse - the minute you
decide to stop taking Paxil.
Back in 1999, when the internet
was somewhat primitive, there was
no information available about Paxils
severe withdrawal process. Even within
the medical community, little about this
issue was well known. One man, who
"cou|dn't s|eep anyways",
due to his Paxil withdrawal
symptoms, decided to change that.
Frank Streicher created Quitpaxil.
org, the frst ever website to assist
Paxil users experiencing withdrawal
symptoms. The site gathers all available
information on the subject of Paxil
withdrawal and features an ongoing
blog that discusses users experiences
with the drug.
"I was rea||y qu|te astounded
at how qu|ck|y |t a|| happened,
w|th|n weeks, I was |nundated
w|th hundreds of |etters. At one
po|nt, I was gett|ng a hundred
|etters a day. I mean, |t was
rea||y just |nsane. I had to bu||d
a b|gger webs|te",
Frank recalls. Following the
guidelines of Quitpaxil.org, Blaise
began to carefully reduce his Paxil
dosage. When he fnally stopped taking
it completely, all hell broke loose.
"Phys|ca||y, |t was a|most
equa||y as bad as the
acute a|coho| w|thdrawa| I
exper|enced after my brother's
death. I went through th|ngs
||ke bra|n zaps, pan|c attacks,
and upset stomach. But the
worst part was def|n|te|y
the psycho|og|ca| effects.
I was unsure of my own
ex|stence, everyth|ng |ooked
two d|mens|ona|. It's ca||ed
depersona||zat|on. I had a
constant, |ntense fear that I
cou|d never exp|a|n",
remembers Blaise.
You might be wondering why a
drug like Paxil ever made the market, or
why its still so popular. In 1988, before
Paxil was offcially on the market,
GSK (formerly Smith Kline Beecham)
conducted a clinical Paxil test in
Yugoslavia; however, what happened
in Yugoslavia was never exposed to
the public eye.
The trial consisted of participants
suffering from major depressive
HOW NORTH AMERICA IS LOSING ITS
WAR AGAINST DEPRESSION LOADED ON PILLS
Cu|ture
By Jorge T. Armand, Staff Writer
ArbitrageMagazine.ca Fall 2011 41
disorders. The trial was divided into
two phases: in phase one, all patients
took Paxil. In phase two, patients were
randomized into two groups, one of
which remained on Paxil while the other
was given a placebo.
Following phase two, the
placebo patients began experiencing
massive Paxil withdrawal symptoms.
As a result, these patients entered a
depressive state that was far worse
than their initial one. On August 14,
2011, in The Superior Court of the State
of California case, Lacuzong vs SKB, it
was argued that the Yugoslavia trials
weren't intended to seek withdrawal
symptoms; the patients, rather, were
simply seen as suffering a relapse.
In 1992, Paxil was launched
with no withdrawal warnings. As Dr.
Pillay recalls,
"When we f|rst started
prescr|b|ng these drugs, you
wou|d get a pharmaceut|ca|
representat|ve br|ng|ng you
pens, books, offer|ng t|ckets
to th|ngs."
He also argues that recent
studies show that repeated exposure
to a certain name may cause an
unconscious bias in consumers.
Contrary to Canadian direct-to-
consumer drug advertising restrictions,
media outlets in the US are infested
with prescription medicine ads that
barely slur the side effects of these
drugs.
Dr. David Reiss, who has
performed more than 10,000 psychiatric
evaluations, says he stopped seeing
pharmaceutical representatives twenty
years ago. He asserts,
"Ha|f of what they sa|d, you
cou|dn't have fa|th |n. These
days, I'|| go to presentat|ons
and p|ck up some of the
||terature, but even w|th that,
you have to be carefu|. They
are tra|ned to se||, and I'm not
there to buy."
Further, he alleges that
"There's a |ot of pressure to
bas|ca||y sedate peop|e or get
them drugged to suppress
symptoms and not rea||y dea|
w|th what's go|ng on."
T
hese days, it seems relatively
easy to get a hold of these
drugs, or even to feel like you
might need them. Amanda
Clark, former Paxil user and
certifed Peer Specialist at the Assertive
Community Recovery LLC in Georgia,
says she has been to over nine doctors
in the past year. According to her,

"a |ot of doctors are p|||
pushers."
One of Amandas doctors
prescribed her Paxil after a rapid
consultation. Amanda experienced
vomiting, total loss of hair, night-
sweats, intense nightmares, and
extreme sensitivity to sunlight.
"It took me three months to
fee| norma| aga|n...I wou|d say
|t's up there w|th gett|ng off
ant|-psychot|cs,"
says Amanda. Advertisements
promise you wont mind the extra forty
pounds, that the love of your life wont
mind your sexual shortcomings, and
that you wont kill yourself you might
be too sedated. On top of that, the
average doctor might be ready to spray
his antidepressant candy shotgun all
over the consultation room. Once
youve experienced all this, and when
you no longer feel like walking over to
the pharmacy to get more pills, you
can have it brought right to your door!
In the United States, you can
send your prescription to Medco Health
Solutions, a company that serves the
needs of more than 65 million people,
and have antidepressants delivered.
Medco made more than $59.8 billion in
2009 thats more than three times the
total GDP of Nicaragua. Medco refused
to disclose specifcs about the revenue
made from antidepressant sales.
Dr. David Muzina, National
Practi ce Leader for Medco's
Neuroscience Therapeutic Resource
Center, says Medcos claim records
detect when someone falls off therapy
or compliance with medication. A highly
trained pharmacist may reach out to
the patient and begin a consultation
over the phone.
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Fall 2011 ArbitrageMagazine.ca 42
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By Jorge T. Armand, Staff Writer
D
r. Muzina says antidepressant
medication strategies should
be looked at carefully. The
prescription of a one year
long antidepressant supply is
a common mistake. After one starts
antidepressant therapy, doctors
should schedule about 7 follow-up
appointments with the patient. Dr.
Muzina explains,
"Unfortunate|y, a m|nor|ty of
pat|ents actua||y see the|r
prescr|b|ng phys|c|an at the
requ|red frequency after they
start an ant|depressant, I th|nk
that's a cr|t|ca| m|stake made
by many c||n|c|ans."
Anyone who suffers from
mental illness or from damage caused
by medication should be made aware
by doctors that there are other
approaches to treatment. Dr. Pillay
encourages broader and more fexible
ways of thinking. He wonders,
"Shou|d we not be aware of
not fa|||ng |nto the trap of just
exp|a|n|ng every ||fe event
as a menta| |||ness? I a|ways
d|scourage peop|e from
|ook|ng at themse|ves through
the |ens of the|r d|agnos|s. It's
rea||y |mportant to rea||ze that
the p|cture of yourse|f extends
far beyond your spec|f|c
vu|nerab|||t|es. It |s |mportant
to encourage peop|e to not
||m|t the|r |dent|ty by |ook|ng
at themse|ves through the |ens
of menta| |||ness."
ArbitrageMagazine.ca Fall 2011 43
!"#$%&'()$*+$,'-./01$23.44$5'63)'
Fall 2011 ArbitrageMagazine.ca 67
EMPLOYMENT:
!"#$%&'&(")#*&#+%&#!,-./012#'&+%345(6#78%#(&*##
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Canada's rst, natIonaI, student-run busIness #
:+6+B5(&C##.7#5("&%&'"&9)#$>&+'&#'&(9#+#38D&%#>&""&%)#
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Culture
!
istory has birthed many
e mp i r e s e mp i r e s
of men, nations and
dynasties that led the
direction of the world.
Empires including: Persia, Rome,
Spain, and Britain. These empires
ruled and shaped the thoughts
of the masses in their time. Each
one is different from the last. The
world has come a long way. Fast-
forward to today, and the design of
the empire state is but a footnote.
Enter the master of todays age, in
this, the age of media; here power is
defned through demand. Technology
is atop that list. Stand awe to the
American dreamers, the Silicon
Valley champions, and the nerd
dictators of the tech world: Apple.
Think Different. Today, empires are
corporations, built by marketing.
Apple has redefned branding,
blurring the lines between product
and producer. They now lead the
world in technology marketing and
have managed to infuse their products
into personal consciousness. Im a
Mac, the statement is ubiquitous in
popular culture. The statement means
I am a Mac user. Many consumers
are dedicated to the products and
the culture they represent. They
represent Apple and by extension,
they think different.
With branding, nations have
become essentially irrelevant. The
lines of statehood are simply for show
or otherwise for the conservative
minded. Identity has broken free
from its cultural connotation and now
refers directly to the trends to which
people subscribe. Consumer culture
demands it to be so. Corporations
are very concerned with the buying
power of the middle class and their
complacency in regards to social
status. Apples success is reliant on
those two factors.
Corporate culture requires
consumers to always be ready
for change; disposable is the new
invaluable and upgradeable is the new
irreplaceable. Apple has reframed
what it means to be a good product.
A good product it appears would
mean one that is constantly evolving
for better. Hip hop artist Kanye West
said in a recent press conference,
If Steve Jobs respected
[OL YZ[ JVTW\[LY ZV T\JO
we wouldnt have iPods and
iPhones today.
It is plugs like this that give insight
into the height of Apples success
and its integration into society.
Frankly, no one refers to any other
mp3 devices other than iPods and
no music repository is as successful
as iTunes. iPods and iTunes have
become synonymous words in music
culture.
Apple leads the world in tech-
innovation; and due to their success,
their start-up story is fading in the
wind. In fact, many consumers do
not know much about The Woz
(Steve Wozniak; Apple Co-founder).
They might however remember him
for pioneering Segwey polo and
from the TV show, Dancing With
The Stars. After helping to develop
the brand, Steve number two chose
to disappear from the big chair and
left Steve number one (Steve Jobs)
to steer the ship in his own direction.
That direction and message seem to
be simple: innovation over invention.
The idea has struck gold, or silver, if
you follow market trends.
Innovation in this case would mean
re-articulating products, ideas and
images and re-constructing them
into something entirely new. To be
reasonable, Apple has not necessarily
created wholly new products. Before
iTunes controlled the music service
market, there were many different
online music stores like Rhapsody;
before the iPad revolutionized the
purpose of the tablet computer there
were swanky pen tablets and before
the iPhone revolutionized the mobile
phone well the rest is history. Apple
is successful because they brand
the most expensive and aesthetically
pleasing software and hardware,
and market them towards everyday
people.
;OLSP[[SLTHUMLLSZPTWVY[HU["
OL MLLSZ LSP[L" HUK HIV]L HSS
he feels unique.
Apple branding is years ahead of
companies their senior such as Sony,
"#$%&'#($)*+,,-'./$)0+11$23-0&3
APPLE NATION: FOLLOW THE LEADER
45&$6(7&3$(1$866,&$*+39&0-'.$+':$-0;$-*6+<0$('$<(';=*&3$<=,0=3&>
ArbitrageMagazine.ca Fall 2011 45
Culture
Microsoft, Motorola and even current
competitors RIM and Google. Apple
sells more than technology and even
more than a lifestyle. It is the sense
that youd be crazy not to be amazed
by their products that makes them
such an important presence. Other
companies are stuck playing catch
up and understandably so. Every
new mobile device is asked the same
question, could this be the iPhone
killer or the iPad killer? Whether they
are better or not, the comparison
alone negates their presence in the
tech market. It would seem at this
point that companies can only wait
for Apple to release a product then
try to one-up them for a few months.
Seems low, but you have to play dirty
to beat Apples squeaky-clean image.
There is no other company as
good as Apple when introducing a
new product; they simply cannot be
beat. There is a formula and I think
I may be on to something. Listen
closely: White background, snappy
indie music, impact words and
phrases (revolutionary, intuitive
phenomenal) followed by a close-up
of the product possibly a 360 view.
Important Apple executive wearing
everyday apparel, cool looking regular
people wearing bright colours doing
interesting things. Visual cue, hey
thats me or Id like to do that,
(apparently you can do it if you were
an Apple person). End with the Apple
logo and thats it folks. No clutter, no
noise. Its you without Apple versus
your life with Apple. It is a great
contrast, appealing to your need to
be better. Genius indeed.
!"#$%&"'#()*++,&-.#(/*00#12,/%2
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Fall 2011 ArbitrageMagazine.ca 46
INTERNATIONAL AFFAIRS
01
02
To explore our poverty theme, we take steps to shed some light on
the famine in Southern Somalia and bring attention to womens
human capital.
International Affairs
global fnancial crisis in 2008. The
USA Today also reports that while the
overall number of international stu-
dents has risen in America, the rate at
which they are coming has severely
dropped.
The reason behind these drops
seems twofold. Firstly, the expenses
of living have increased in all coun-
tries that offer upper-class institutions;
the fnancial crisis has caused the
currency in many countries to rise
substantially. In addition to that, gov-
ernments have toughened the qualif-
cations needed for visas; such things
like the English skill level expected
of the applicant have increased.
Governments are also now enforcing
stricter rules regarding employment
for foreign students - severely limiting
work opportunities.
Interestingly, government offcials
argue that such actions are needed to
reinforce the idea of integrity in the
educational system. Certain univer-
sities have been criticized for offer-
ing relatively easy courses such as
hairdressing to entice students from
abroad. However, university offcials
argue that such plans will have both
negative long term and short-term ef-
fects on the economy.
Since fewer students are enroll-
ing, this means that less money will
be coming in. To mitigate costs, many
experts believe that universities will
ultimately cut staff - exacerbating the
already problematic unemployment
rate that many developed countries
face. The problems only get worse in
the long term, since such layoffs will
worsen the quality of teaching; it will
mean fewer teachers for the same
level of students.
Matthew McGowan, National As-
sistant Secretary of the Australian Na-
tional Tertiary Education Union, was
quoted by the BBC as saying: "The
quality of the graduates the universi-
ties are being asked to deliver to the
economy will not be as robust as they
once were." If these predictions turn
out to be true, one could imagine the
governments of the developed world
reversing their plan swiftly, as most
are in no shape to handle such a blow
to the economy.
!"#$%&'()*#+()*%,%-#$.&//#0,%.1,
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he addition of international
students to a university
student body has always
been seen as a great example
of a win/win situation. The
student enrolling in the university
receives a level of education that he/
she would most likely not receive in
his/her own home country. They might
learn a new language (or better their
understanding of a language they
already know). They might also develop
new contacts in another part of the
world, a crucial advantage in an ever-
globalizing community.
The universities, on the other
hand, get to charge higher tuition fees
and therefore make more money. The
universities also build their reputations
in other parts of the globe that may or
may not be familiar with their teaching
abilities.
In spite of this, what always ap-
peared to be a rather healthy relation-
ship has in recent years turned sour
as the number of international stu-
dents in universities has fallen across
the developing world.
In the UK, The Guardian reports
that the number of international stu-
dents are expected to fall by 230 000
in the next fve years. In Australia, the
percentage of foreign students has
fallen to their lowest levels since the
International
Students
The
Dissappearing
of
Pinpointing the Cause of a Decreasing Number of
International Students across the Developing World,
and What It Might Mean for Universities Going
Forward
Curious
Case
ArbitrageMagazine.ca Fall 2011 49
International Affairs
UN DECLARES FAMINE IN SOUTHERN SOMALIA
While millions are affected by famine in the south, hundreds of thousands leave to
neighbouring countries in hopes of escaping famine.
!
or the first time since
1992, the United Nations
has declared famine in
Somalia. According to
the UN, the situation
is deteriorating rapidly in the two
affected regions, southern Bakool
and Lower Shabelle, with 3.7 million
Somalis - nearly half of the population,
predicted to be in a situation of crisis.
An estimated 2.8 million individuals are
located in the south.
The famine has resulted in more
than 160,000 Somalis seeking refuge
in neighboring countries like Ethiopia,
Kenya, and Djibouti. Most of them
arrive in terrible physical conditions
malnourished and exhausted.
*P]PS*VUPJ[
Following the overthrow of Mohamed
Siad Barres regime in 1991, Somalia
has since been struggling with
ineffective governments and civil war.
In place today is a weak and corrupt
transitional government. Although
backed by the United States and its
allies, the Somali government is barely
capable of addressing the famine.
Today, much of the governments
efforts are focused on preventing Al-
Shabaab, an insurgent group linked
to al-Qaeda, from overtaking the
Somali capital of Mogadishu.
The famine was not something to
be unexpected in the Horn of Africa.
For several months, the United Nations
had warned of an impending crisis.
Failed harvests, combined with violent
confict in many areas, gradually gave
rise to food insecurity.
The United Nations
For the frst time in almost two
decades, the United Nations employed
the term famine to describe the
situation in Somalia a word it so
sparingly uses.
In order for a famine to be declared,
specifc measures of malnutrition,
hunger, and mortality must be met.
Amongst other criteria, a famine
can only be declared when more
than 30 percent of the population
is malnourished, and when a state
witnesses large-scale displacement.
Declaring a situation as a famine
does not legally obligate the UN or its
member states to carry out any specifc
actions but it does provide the region
with global attention.
The United Nations World Food
Programme (WFP) said it will begin
providing Somalia with vital supplies
in the next few days. In addition to
airlifting emergency aid, the WFP is
looking to open several new land and
air routes in order to securely access
the millions of Somalis in need.
In 2009, Al-Shabaab had banned
foreign aid agencies to access central
and southern areas of Somalia, but
has recently declared that it would
allow aid into famine-stricken parts
of the country.
B. Lynn Pascoe, UN Under-Secretary-
General for Political Affairs, joined by
Augustine Mahiga, Secretary-Generals
Special Representative for Somalia,
visited Somalias capital in July.
The visit, which consisted of
several meeti ngs wi th Somal i
leaders, included talks on the end
of the transitional period. The visit
also signaled the UNs solidarity with
the Somali population amid times of
suffering.
Mr. Pascoe claimed that the Somali
leadership had made it clear that the
famine would be made a top priority.
Sources Used
UN website: http://www.un.org/apps/news/
story.asp?NewsID=39106&Cr=somali&Cr1=
http://www.un.org/apps/news/story.asp?NewsI
D=39113&Cr=somalia&Cr1=
BBC news: http://www.bbc.co.uk/news/world-
africa-14211905
Washington post: http://www.washingtonpost.
com/world/africa/un-famine-in-somalia-is-killing-
tens-of-thousands/2011/07/20/gIQAbV3iPI_story.
html
!"#$%&'$()*+,-.,&/#0120/&3
43+5(&#00,+6(0+672/8+9/211+:&#/,&
Fall 2011 ArbitrageMagazine.ca 50
SCIENCE & TECHNOLOGY
Role of Cell Phones in Developing Countries
Cell Phones in Developing Countries (health, education, agriculture).
The ISP War on Piracy
iPhone Killers
Alternatives to the iPhone.
Science & Technology is a fascinating section not because of the
help you digest it all by bringing you up to speed with the ISP War
on Privacy, looking at smart phone alternatives for your beloved
iPhone, and seeing the fundamental role cell phones are now
playing in shaping developing countries.
01
02
03
Science & Technology
ArbitrageMagazine.ca Fall 2011 53
S
o
u
r
c
e
:

n
o
b
a
d
t
r
i
p
s
.
c
o
m !"#$%&'#$&($)&*+'#$,"&-#.$+-$
/#0#'&1+-2$3&4-56+#.
T
he popularity of mobile devices
stems largely from their global
reach. An estimated 4 billion
people access a world of
knowledge and information through
the internet in their cell-phones. This
number is four times larger than what
personal computers are able to offer.
Interestingly, two-thirds of these avid
cell-phone users reside in developing
nations; and according to the World
Bank, in Africa the subscription
numbers are growing rapidly, perhaps
because of the technologys ability to
signifcantly impact areas of health,
education, and agriculture in the
developing world.
As the developing world intensely
lacks central infrastructure such as
landlines and internet work-stations,
some would argue that the region has
a distinct need for mobile phones, it is
able to act as a replacement for things
that the frst world takes for granted.
Mobile phones are essential for the
development of the third world.
The New Yorkers Ken Auletta uses
the Sudanese billionaire Mo Ibrahim
as an example.
Ibrahims former company, Celtel,
brought mobile phones to Africa.
Auletta states how invaluable mobile
phones have proven to be in Liberia,
a country entirely without landline
service. In such context, mobile phones
have the ability to provide opportunities
in areas that need it most, and which
were lacking it in the past.
The World Bank equates the
phenomena of mobile banking -- or
m-bankingand its past success
to the new potential mobile devices
have for educating the developing
world. This potential is based purely
on how many people use mobile
devices. For instance, the relatively
new recent ability to do online banking
on cell-phones has proven to be as
successful as it is useful. The World
Bank envisions educational processes
in developing countries rising with the
same success.
An example of the mobile phones
innovative ability to educate is seen
in the Scientifc Animations without
Borders initiative.
By Zack Larmand, Staff Writer
Science & Technology
Fall 2011 ArbitrageMagazine.ca 54
By Zack Larmand, Staff Writer
S
o
u
r
c
e
:

n
o
b
a
d
t
r
i
p
s
.
c
o
m
A team from the University of
Illinois is developing a two-minute
educational animation video viewable
on mobile phones. The project, called
the Sustainable Development Virtual
Knowledge Interface, wants to help
low-literate and low-income learners to
understand basic concepts and have
access to relevant information.
Following the same lines of
m-bankingand now m-education
is the new initiative of m-health,
which is already
making its mark in Africa. The Alternative
Press reports that a lack of landlines
and hospital beds is combated by a
rich mobile phone network. Africas Aid,
MDNet or Mobile Doctors Network, is
comprised of 2200 doctors from Ghana
and all of Liberias 143 doctors. It allows
physicians to text and call each other
for free.
ln Kenya, other benefcial use for
mobile phones has been witnessed.
Isaiah Esipisu, for example, has
encountered a mobile phone application
called M-Farm. The application,
developed by three female students
in Nairobis Strathmore University, is
meant to help combat climate-driven
price uncertainty in agriculture.
Esipisu watches Kenyan farmer
William Muriuki as he uses his phone
to physically identify places with high
demand. He literally texts the word
price followed by cabbage and the
place name, Embu, and sends it to
3535. Almost immediately he receives a
reply stating Cabbage Ext Bag 126Kg
selling at Ksh400 in Embu as of 2011-
04-01. Substituting different locations
and products, the farmer Muriuki is
able to confdently identify optimal
markets for his product.
Health, education, and agriculture
are very important examples of the
needs present in the developing world.
The mobile phone is proving to be an
incredible tool for preparing to meet
the demands of these needs.
As technology progresses and
human networks continue to grow, the
mobile phone will prove to be one of
the most important tools for connecting
the developing world to meaningful
opportunities and privileges.
Science & Technology
!"#$%&'()*+%,&#-,.&/*01#2).33#4&'),&
5
irates beware: the
White House has
conscripted Internet
Service Providers into
becoming Internet
vigilantes to curb stolen intellectual
property through a six strikes plan.
The rag tag group consisting of
ISPs, i ncl udi ng Comcast, AT&T,
Verizon and Time Warner Cable
will try to become more active in
curtailing the wanton downloading
of copyrighted materials by some
of their users.
They wi l l send not i ces t o
subscri ber s whose connecti ons
are allegedly being used for content
theft; this isnt new. Whats new is
if a user receives multiple notices
and doesnt respond the ISP may
take further action. Actions range
from reducing download speeds
to cutting off access altogether.
The Center for Democracy and
Technol ogy (CTD) has al ready
l everaged its concerns about the
new rules, which will be policed by
the Internet providers.
Among our concerns, we are
particularly disappointed that the
agreement lists Internet account
suspensi on among the possi bl e
remedi es. We bel i eve i t woul d
be wrong for any ISP to cut off
subscr i ber s, even t empor ar i l y,
based on allegations that have not
been tested in court, said CTD in
a statement.
ISPs will inform offenders of
copyright laws and even how to
check their computer and network
securi t y. It wi l l even di rect users
to where they can fi nd l egal l y
downloadable content.
The thought is that this will push
Internet users toward using legal
services accessible online, such as
iTunes or Netflix.
According to the release, ISPs
wont gi ve names of off endi ng
users to copyright holders. This will
keep users from being chased by
companies with lawsuits in hand.
Thi s move wi l l prot ect
intellectual properties,
and turn the tide on the
heavy losses [the MPAA]
has experienced through
pirating.
This marks a major victory for
the Recording Industry Association
of America and the Motion Picture
Association of America (MPAA), who
have collectively battled ISPs for years
to take a more active role in assuring
that their users do not illegally pirate
copyright content.
They believe this move will protect
intellectual properties, and turn the tide
on the heavy losses theyve experienced
through pirating.
The MPAA has a large stake in Canada
as well as the parent of the Canadian
Motion Picture Distributors Association.
It convinced Canada to become one of
the few countries in the world to enact
anti-camcording laws back in 2009.
It wouldnt be out of the ordinary if
these heroes come to Canada to exert
a little pressure and see if they can
convince us to give up our evil-
doing ways.
THE ISP WAR ON PIRACY !!!!!!!!!!!!!!!
Internet service providers are taking problems of copyright security into their own hands
6
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ArbitrageMagazine.ca

April 2011
55
EMPLOYMENT:
!"#$%&'&(")#*&#+%&#!,-./012#'&+%345(6#78%#(&*##
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"58('#+(9#'+>&'#'"+77#"8#*8%;#78%#"4&#!?@.-?!A0)#
Canada's rst, natIonaI, student-run busIness #
:+6+B5(&C##.7#5("&%&'"&9)#$>&+'&#'&(9#+#38D&%#>&""&%)#
%E'<:E#F+(9#'+:$>&#87#G8<%#*8%;#57#G8<H%&#+#*%5"&%#
or desIgner) to: hr@arbItragemagazIne.com
SUBMISSIONS:
APITPACE edItors weIcome submIssIons from #
*%5"&%'#+(9#$48"86%+$4&%'C##!';#78%#9&"+5>'I##
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LETTERS TO THE
EDITOR:
J<66&'"58('K##L<98'K##,%5"535':'K##-4&#!?@.-?!A0#
weIcomes Letters To The EdItor. They must be
'56(&9#+(9#5(3><9&#35"G#87#8%565(C###
EmaII: Ietters@arbItragemagazIne.com
INTERVIEW:
If you are a busIness student of merIt, a #
$%87&''8%#8%#5(9<'"%G#$%87&''58(+>)#+(9#G8<#+%&##
wIIIIng to gracIousIy Iend your tIme to be Inter=
D5&*&9#78%#8(&#87#"4&#!?@.-?!A0H'#7<"<%&#38><:(')#
pIease contact: query@arbItragemagazIne.com #
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OTHER QUERIES:
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LEGAL NOTE:
AII Ietters or pIctures submItted may be pubIIshed
by the APITPACE, unIess expressIy forbIdden by
the sender. Names wIII be wIthheId on request.
The APITPACE cannot be heId responsIbIe for
the return of unsoIIcIted materIaI. AII submIssIons
may be edIted for punctuatIon, grammar, styIe and
Iength. Not aII materIaI may be pubIIshed.
Science & Technology
!"#$%&'%&(#)*+,#-(.//#0&+(%&
It seems the iPhone has dominated
the market ever since it touched down
into the mobile phone ecosphere.
Certainly, its appeal is undeniable its
great apps, beautiful user interface,
and screen like no other naturally
makes it stand out from the rest of
the pack.
Many manufacturers have taken an
attempt on its life. Have a look at these
beasts before you put your hard-
earned money into a smart phone.
Here are fve iPhone alternatives that
you might not have known about,
each with its own unique advantage
Samsung Galaxy S II
With a form factor very similar to
the iPhone on the throne right now,
the Samsung Galaxy S II aims to pick
up right where the beloved Samsung
Galaxy S left off.
According to Engadget, the
Samsung Galaxy S IIs screen display
quality is remarkable (800px x 480px),
and competes with the previously
unrivaled iPhone 4. The Galaxy S II
has a strong 8-megapixel camera
and can record 720p video, much like
the iPhone 4.
The Galaxy S II runs on the
Android operating system, which
plays very competitively with the
quality and quantity of apps available
for the iPhone. It runs on a dual-core
processor talk about a smart phone!
BlackBerry Bold 9900
Although the Bold 9900 doesnt
have a camera (5-megapixel) that
stacks up comparably to the Galaxy S
ll, it's defnitely decent enough to take
casual photos with. It also comes
with around 8GB of storage, which
is more than enough for any average
user, and is extendable to 32GB.
Keep in mind that the BlackBerry
Bold also has a touch screen face.
The BlackBerry Bold 9900 will be
running on BlackBerry OS 7, which
you can get a sneak preview of here.
I have a Blackberry Bold 9700 and
love it to death. I think the keyboard
on the Bold is really what sealed
the deal; I can input text faster than
I could on a touch screen and with
more precision.
Motorola Atrix
The Motorola Atrix also has
fngerprint recognition technology
that means only you will be able to
gain access to your phone.
Similar to the Samsung Galaxy S
II and the HTC Sensation, Motorola
is running the Android operating
system and was the frst to have a
great implementation of Flash into
the Firefox browser, whereas neither
Apples iOS or RIMs BlackBerry OS
are compatible with it yet.
As icing on the cake, the folks over
at TechnoBuffalo have qualifed the
Motorola Atrix to be a great iPhone 4
killer.
BlackBerry Torch 9810
Although the BlackBerry Torchs
screen is suffcient (640px x 480pxj,
RIM decided to include a keyboard
on the Torch 9810, which users can
slide out for use.
Although more and more users are
starting to adapt to touch screens,
the good chunk of users that prefer
QWERTY keypads for texting and
e-mails will defnitely want to look into
a BlackBerry Torch 9810.
HTC Sensation
Out of all the iPhone Killers on
the list, the HTC Sensation has the
screen resolution (960px x 540pxj
that comes closest to matching the
iPhone 4 (960px x 640pxj. The HTC
Sensation runs on Android, and
comes equipped with the HTC Sense
UI add-ons.
It also comes with a nice
8-megapixel camera with 1080p
video recording, although I wouldnt
sell the camcorder just yet. That
said, it only has 1GB of internal
storage. Although it is expandable
via microSD, youll have to invest in
a high-capacity MicroSD card if you
want to record those high-defnition
video clips.
iPhone Killers
More than a few new smart phones
are threatening to knock the iPhone
off the number one spot
ArbitrageMagazine.ca Fall 2011 57
Science & Technology
!"#$%&'%&(#)*+,#-(.//#0&+(%&
Your Weapon of Choice?
There are a myriad of great devices
out there that can serve your needs
better than the iPhone 4, if you can
just take some time out and fnd them.
With that said, the iPhone 5 is on its
way outand with the threat of
iMessage looming over BBM, you
might want to take a step back and
wait to see just what happens to the
playing feld in a few months. Rumour
has it that the iPhone 5 might be
coming out near mid-September.
!"#$%#%$&'#%(#)$**#%+'#$,+(-'.
Fall 2011 ArbitrageMagazine.ca 58
NORWAY RETAILERS PULL VIOLENT VIDEO
GAMES OFF SHELVES AFTER MASSACRE
Are violent video games unfairly targeted as the cause of violence?
Science & Technology
!"#$%$&%'&(")
*
orways biggest retailers
are pulling 51 video
games from shelves
following the terrorist
attacks in Oslo that left
over 90 people dead.
Coop Norway and Platekompaniet
pulled numerous titles, which included
Call of Duty, Sniper Ghost Warrior,
Counter Strike and Homefront.
Times Techland blog reported
statements from Coop Norways Retail
Director, Geir Inge Stokke, saying that
the decision was made when they
realized the scope of the attacks.
Others are better suited than us to
point to the negative effects of games
like these, he said to Norways
Rogalands Avis newspaper.
Stokke said it was an appropriate time
to pull the titles.
Its worth noting that many of these
titles are the same ones listed in Anders
Behring Breiviks Knights Templar Log.
He wrote that he thought Call of Duty:
Modern Warfare 2 was a great simulator
to prepare him for the killings.
I just bought Modern Warfare 2, the
game. It is probably the best military
simulator out there and its one of the
hottest games this year, he said in a
post on February 2010.
Even World of Warcraft, a fantasy/
roleplaying title, was pulled from
shelves, in spite of being somewhat
benign. Breivik used Warcraft as a cover
for his activities to explain long periods
when he was absent and unable to pick
up the phone.
Pulling these from shelves has
alarmed some people in the video game
community, who believe that the violent
actions which happened in Oslo are not
the fault of games and that this may
bring on a string of censorship within
the medium.
Video games have often been in the
limelight before when it has come to acts
of violence or juvenile delinquency.
In June, a Supreme Court decision
struck down a law banning violent
video games for sale, saying that
the new regulation prevented free
speech. Justice Antonin Scalia in his
majority opinion said video games
are like books or movies in that they
communicate ideas.
The Justices also added that evidence
regarding the violent effects of video
games was lacking. They stated that
there was little to tie violent behaviour
to violent video games.
So its surprising that two major retailers
in Norway would pull violent video
games while the music that Breivik
listened to or the movies he watched
stay on shelves in spite of being listed
in his log as well.
It should be noted that World of
Warcraft reached 12 million subscribers
in October of last year and Modern
Warfare 2 has sold 22 million units since
its release in 2009.
With no timeline as to when the stores
are bringing these titles back, it looks
like Norwegians are going to have to
look elsewhere for these games.
We have to think very carefully
about when to bring these goods
back. The economy is of no
importance, remarked Stokke.
+,-'./0'&(1%234/&%5-,3(6-,%2&7$-%
89%5:/-;$&<:"/%="3/6&7>%?$3@@%A/-$"/
ArbitrageMagazine.ca Fall 2011 59
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Entrepreneur Watch: Bump 50:50s Magic Man, Dan Tanenbaum, Digitises the Raffle
Interview with Dan Tanenbaum/Look into Entrepreneurship.
Owning a Franchise - A Feasible Option for Graduates
Practicality and feasability of owning a franchise.
01
02
Entrepreneur Watch: Bump 50:50s Magic Man, Dan Tanenbaum, Digitises the Raffle
Interview with Dan Tanenbaum/Look into Entrepreneurship.
Owning a Franchise - A Feasible Option for Graduates
Practicality and feasability of owning a franchise.
01
02
With some direction and words of advice, small business can be a
provide you the tools to get the ball rolling ahead of your future
competitors. On top of categorizing franchises as a viable option
graduates, the issue also features a revealing exclusive interview
with Bump 50:50s Magic Man, Dan Tanenbaum, who has
vulnerable side of Tanenbaum, whose brutal honesty will leave you
wanting more.
BIZ START UP
Entrepreneur Watch: Bump 50:50s Magic Man, Dan Tanenbaum, Digitises the Raffle
Interview with Dan Tanenbaum/Look into Entrepreneurship.
Owning a Franchise - A Feasible Option for Graduates
Practicality and feasability of owning a franchise.
01
02
Entrepreneur Watch: Bump 50:50s Magic Man, Dan Tanenbaum, Digitises the Raffle
Interview with Dan Tanenbaum/Look into Entrepreneurship.
Owning a Franchise - A Feasible Option for Graduates
Practicality and feasability of owning a franchise.
01
02
With some direction and words of advice, small business can be a
provide you the tools to get the ball rolling ahead of your future
competitors. On top of categorizing franchises as a viable option
graduates, the issue also features a revealing exclusive interview
with Bump 50:50s Magic Man, Dan Tanenbaum, who has
vulnerable side of Tanenbaum, whose brutal honesty will leave you
wanting more.
BIZ START UP
Biz Start Up Trends Culture Finance & Economics Science & Technology International Aairs Student Co. Business Entrepreneurship Biz Start Up
!"#$%"&'()&'&*$+(,-& .&//01233
63
By Prachi Kamble, Staff Writer

magine going to a hockey game


and buying raffle tickets to a
draw that builds up during the
event - all in immediate time
and right before your very eyes.
Bigger draws, bigger wins and bigger
cuts to charity is what this means for
major marquee events. Bump 50:50,
a company based out of Toronto,
provides this revolutionary technology.
Sales people roam these large events
with a hand-held device housing
Bump's revolutionary software that
makes this real time raffle draw a
reality.
Dan Tanenbaum is the man behind
the vision. He talked to me about his
experiences in entrepreneurship- the
perks, the battles, the lessons and the
importance of running a business with
heart. Less than two years into Bump
and his company is already on the
way to tasting success as word about
Bump's innovative services filters fast
through the mainstream.
Tanenbaum has many credentials
to his name - advertising person, art
collector, stand-up comic and now
an entrepreneur in the technological
field. His career path is fascinating,
to say the least. To find out how he
sculpted his entrepreneurial spirit,
spoke to Dan about his career and
experiences.
Can you tell us about your
background? Where did you
grow up and where did you go
to school?
For high school, went to Forest Hill
in Toronto and for university, went to
Michigan State University.
What did you take at university?
graduated with a BA in Advertising.
That is very far removed from
business and technology.
t is the furthest thing. Technology was
not even around at the time. t was
just coming to when was in school.
mean computers were out- am not a
hundred years old! But in terms of the
technology that we have as it stands
today, it was not even close.
The computer business was a risky
venture back then. A big risk?
t was not even a business. Michigan
State was a testing ground for many
things. The nternet was test-marketed
at Michigan State. think it was called
Prodigy back then. So had access
to one of the first iterations of the
nternet.
Did that spur your interest in
the area of technology?
have always been interested in new
things and in how the world works,
although technology was not very
robust or meaningful back then. And
it was slow!
Did you know in school that this
was the path you were going to
take?
No. Not in the least. was an art director
for twelve years. Advertising was the
direction wanted to take. come from
a large family of entrepreneurs and
risk takers. t was not something that
wanted to get into immediately.
BUMP 50:50!S MAGIC MAN,
DAN TANENBAUM,
DIGITIZES THE RAFFLE
THE MAN BEHIND THE VISION SHEDS LIGHT ON
THE VALUE OF WORKING HARD,
GOING WITH YOUR GUT AND EMBRACING FAILURE
PRACHI KAMBLE, STAFF WRITER
Biz Start Up Trends Finance & Economics Science & Technology International Aairs Student Co. Business Entrepreneurship Biz Start Up
!"##$%&''$ ()*+,)"-./"-"0+1.23"
64
By Prachi Kamble, Staff Writer
wanted to get into immediately.
Did your arts degree and your
advertising background prepare
you for entrepreneurship?
do not think anything really prepares
you for entrepreneurship. You just
have to trust yourself and have people
around you who back you up and
support you. Advertising just was a
maturing process for me.
When did you reach the point where
you were ready to try something
new? When you felt ready to
leave behind the security of your
advertising career?
There is no security in advertising.
t is very youth oriented. At thirty in
advertising you are an old guy. You
have to consider what you are going
to do for the remainder of your life. My
biggest challenge was transitioning
from a creative person to a business.
t is a difficult leap because there is
not much of a bridge between the
two. was lucky that the first business
opportunity had was a company
called Portfolios.com that was
servicing the ad industry. So, for me, it
was fortunately a natural progression
because it was running a business
that was in an industry had just come
out of. t was the perfect transition into
entrepreneurship.
Did you work at Portfolios.com for
a while?
Portfolios.com was my company.
worked for no one! worked for myself.
How did the idea of Portfolios.com
come to you?
purchased the company. t was a
company that was not being managed
correctly. saw an opportunity to pur-
chase this company for a favourable
price. purchased it, grew it and
sold it. And then was ready for my
next venture.
Was it a very protabIe venture?
t was a great learning experience
(laughs). That is how would rather
talk about it. t was my MBA. did not
take any business at school. was an
art director. knew how to do inter-
esting stuff on Photoshop. Running a
company of twenty people was defi-
nitely an experience, as was manag-
ing and leading people, strategising
and forecasting. PNL was something
that was not in my vocabulary before.
Would you say that school did not
prepare you enough for entrepre-
neurship?
t is awful for me to talk about this be-
cause took no business courses in
college. am sure business courses
are amazing but nothing teaches
you quite like practice. t is like hav-
ing children. The second you have a
child everything you learned in parent-
ing books goes out the window. Every
child is different. n the same way ev-
ery business is different. Every man-
ager is different and every employee is
different. You can learn the basics, the
concepts and the math behind busi-
ness, but no one can teach you how to
run a business. t is instinct, it is trust-
ing yourself and learning through your
gut. t is in doing things and in not con-
templating them for too long. The les-
sons learned running my own busi-
ness were hard-hitting because had
a lot at risk than when learning with the
safety net of someone else's barriers,
mistakes and successes. t is different
when the risks are your own. Making a
decision that could lose you a million
dollars is a lesson you will never for-
get. You get an F for failing that lesson
in school. t is a lot different.
Did you have a good team working
for you at Portfolios.com?
have had good teams and bad. The
thing is you cannot pay someone to
give a shit at the end of the day. Un-
less they have skin in the game or they
are partner. You can get someone to
do good work but once that bell rings
at five o'clock they are not staying up
at night hoping that everything works
out - am. have had good and bad
teams but at the end of the day they
are expendable- they leave you or you
fire them. t is difficult! At Portfolios.
com ended up working with a good
partner. Now at Bump run the show
mostly by myself with a very strong
tech partner whom know very well
and whom trust and believe in.
Biz Start Up Trends Culture Finance & Economics Science & Technology International Aairs Student Co. Business Entrepreneurship Biz Start Up
!"#$%"&'()&'&*$+(,-& .&//01233
65
By Prachi Kamble, Staff Writer
You have to be strong hearted
in business. No hiring friends
and relatives?
To be very frank, would hire a rela-
tive in a heartbeat. Because know
that they are not going to screw me
over. know that they will work their
ass off for me! But will not just hire
relatives for the sake of it. f they have
heart and they want it, they are will-
ing to put in the hours then have no
problem with it. t does not affect me.
Usually creative people are re-
clusive and prefer being by
themselves but in entrepreneur-
ship you need to be a people!s
person, constantly interacting
and communicating with people.
Would you count yourself in that
category of creative people for
whom entrepreneurship is so-
cially challenging?
did stand-up comedy. love a crowd.
am very comfortable in front of people.
That creative recluse is not me! am
a Gemini. am a middle child. There is
nothing like more than an audience.
As an art director, if you have a great
concept, it is not enough unless you
can sell it to a client. That is one of my
superpowers. love presenting and
love being in front of people.
Being outgoing is a crucial qual-
ity to have as a businessperson
then?
t is important to be passionate about
whatever you are doing. There is noth-
ing worse than someone talking about
their business and it sounds like they
hate it. love what do, believe in
what do and know it is going to be
successful. And because of that it will
be successful. You have to have that
fire inside you.
How did the concept for Bump
come to you?
A friend of mine brought the concept
to me. t was the perfect thing to come
across my table because had the
perfect trifecta for this. have strong
connections in the sports and enter-
tainment industry, very strong family
ties in philanthropy and a personal
background in technology from
running Portfolios.com. To be able to
marry these three passions of mine is
Biz Start Up Trends Culture Finance & Economics Science & Technology International Aairs Student Co. Business Entrepreneurship Biz Start Up
!"##$%&''$ ()*+,)"-./"-"0+1.23"
66
S
o
u
r
c
e
:

n
o
b
a
d
t
r
i
p
s
.
c
o
m
a dream come true for me. So when
my friend brought Bump to me
pounced on it and hit the ground
running. Don't forget am only a year
and a half into the company and we
have been working at lightning speed.
Has the company grown
considerably since you started?
We exploded.
Were you pursuing other projects
alongside Bump? Or were you
comfortable putting all your
eggs in one basket?
f you are going to put one foot in it is
not going to work. You have to dive in
completely with your concept or it will
fall into a side project. Others might
do it differently but think the person
who just dabbles in a project or does
something else at the same time ends
up doing nothing - either do one thing,
do it well and do it right, or don't do it
at all!
Has the development process
for Bump been very difcuIt?
Were there many challenges
you faced during the process?
There have been a lot of challenges.
The problem with running a tech
company when you are not a tech guy
is you are a hundred per cent reliant on
people that you are just meeting. You
meet programmers and developers
for an hour or a week and you trust
them with your life. f they mess it up,
you have to start from scratch again.
That happened to me three times.
Were those big mistakes?
Catastrophic. But the good news is
that my first client was St. Louis Blues.
f had any other client for my beta
test would not have this company
today. The gentleman who runs the
foundation at St.Louis Blues, Bruce
Affleck, could have told me to take a
hike when my system blew up in my
face five times in a row and would
not have a business today. nstead,
he said believe in you, believe in
this product, believe in this company,
figure it out, get it right and get it
cooking. He helped me stay motivated
and to not focus on the company.
He helped me move forward as a
company. t would not have been
possible without him. No matter how
big Bump gets, St.Louis Blues will
always be my number one priority.
What are your goals when it
comes to charity as part of
Bump? How important is it to
you and your business?
This company is all about charity.
n fact, this company is only about
charity. Every sports team has a
charity foundation associated with
them and these foundations make
a bulk of their dough through 50-50
raffles but they are still running them
like they did in 1820. To me, there is
no reason to run a 50-50 raffle if you
do not see profits escalating from
3000 to 5000 to 10,000. That is what
generates ticket sales. That is what
generates excitement. There is no
way of doing that when you are doing
it manually. With our system, clients
are able to have updated pot sizes
and we are able to triple their sales
time through a ubiquitous application.
Because of this, foundations are going
to make a lot more money for charity.
Is Bump only limited to sporting
events?
No, but sporting events are my focus
right now. want to pursue this till get
five to ten marquee events and then
will go to the other places that wish.
One of the hurdles in this company
is dealing with gaming laws. t is not
the technology that is difficult- it is
the laws. You have to know what the
government regulations are, who the
people to approach are and how to
get past the regulatory constrictions.
Do you have a marketing plan
for Bump? How are you putting
the word out there and who is
your target audience?
My target audience is made up of
foundations associated with sports
teams. Right now, my focus is on the
NHL, NBA and MLB. There are thirty
teams in each- that means ninety
contact people. t comes down to me
calling these people and getting them
comfortable with using the system. t is
hundred per cent interaction between
me and them. Since my bucket is so
small, want to make sure that am
speaking with them personally.
Do you think this is a promising
time for new businesses? For
Bump?
For Bump, it is. Everyone is ready for
it. They need it! Foundations don't pay
for my system. pay for everything.
get a very small piece of the pie.
t costs foundations nothing and
increases their profits.
Does successful entrepreneurship
come down to having a winning
idea and believing it enough to
make it a reality?
Yes, but it also takes courage. There
are so many people out there with
winning ideas. But ideas are just ideas
unless you are willing to say "you
know what, am going to mortgage
my house and am not going to take
a paycheck for two years. That is
a very difficulty pill to swallow. t is
what separates entrepreneurs from
the crowd. t is what separates real
entrepreneurs from people who
say "Oh 've got an idea and when
someone says "Put in $450,000 of
your own into that and don't take a
paycheck for a year, they realise they
do not want it bad enough. That is a
tough lead to take.
Did you have to make personal
sacrices when putting aII your
time and hard work into Bump?
Well, family is always first for me. Like
said, haven't taken a paycheck in
a year, have a massive mortgage
on my house, no fancy three-week
vacations. There are certainly restless
days and nights for me but family is
never sacrificed. Hard work doesn't
mean you gotta work hard for a year.
t means you have to work hard for five
years. That is where stamina comes
in.
What about the recession? Did
it make running Bump difcuIt?
Did you consider alternatives at
the time?
t is like playing poker, recession or no
recession. There comes a point in the
game where you could either throw in
the towel or throw in more dough or
you win. When you are in so deep at a
certain point, it is very difficult to throw
in the towel. The recession does not
affect Bump. t affects me in my life
and other businesses, but not Bump.
By Prachi Kamble, Staff Writer
Biz Start Up Biz Start Up Trends Trends Culture Culture Finance & Economics Finance & Economics Science & Technology Science & Technology Student Co. Student Co. Business Business Entrepreneurship Entrepreneurship Biz Start Up Biz Start Up

By Prachi Kamble, Staff Writer
For example, Portfolios.com. When I
purchased it, all our revenue was in
USD and at the time of purchase the
dollar was trading at 68 cents. By the
time I sold the company, the dollar
was at par, so I did not have a baked in
30% buffer zone; even if the company
was doing 40% better than when I
bought it, it was actually only doing
10% better because of the exchange
rate. That is an example of economic
times completely out of my control
affecting my business. Entrepreneurs
make mistakes when starting out. You
do not even have to say starting out.
Making mistakes is an ongoing
process then?
As is life. Never think you are done
making mistakes. It is difficult to
warn someone about mistakes. They
are hard to anticipate. It is the little
wake-up calls that make you a better
businessman. Avoiding mistakes does
not make for a strong businessperson.
Is there a mistake you wish you
had avoided?
There are a lot of mistakes I wish I had
avoided but the fact of the matter is if
I had avoided them I would probably
bump into another mistake soon after.
I try not to look back and wish I did
things differently because it does not
accomplish anything.
What do you like about being an
entrepreneur?
What I love about being an
entrepreneur is that at the end of the
day, you can look at what you did and
say I did that. There is a real sense
of accomplishment and pride in it.
What are your future plans for
Bump?
Someone asked me the other day
what!s your exit strategy? That is
a difficult phrase for me to wrap my
head around. It seems like everyone
is thinking about when they will
build the company, when they will
make the dough and when they will
get out of it. I am looking forward to
finishing this Phase 1 at Bump, have
it be implemented in many marquee
stadiums in North America and later
evaluate what my next phase will be
in five years.
What advice would you give to
student entrepreneurs?
I hesitate to tell anyone out of school
to start their own business. I think it
would be a mistake though I am sure
some people are very successful
at it. It is important for someone to
work for someone, to see how other
companies are run and managed, and
learn from that. Sadly, society puts
instantly successful entrepreneurs,
like Mark Zuckerberg, on a pedestal.
But in reality how many Zuckebergs
have emerged in the past ten years? It
is important to get as many life lessons
under your belt before you take a big
leap. If you don!t pay your dues and
make a gazillion dollars overnight, you
won!t know how to handle yourself.
What do you do when you are
not working on Bump?
I am a hundred per cent about family.
My daughter is my grandmother!s
fortieth great-grandchild. That gives
you a sense of how big my family is. I
am an art collector. One of my focuses
is vintage timepieces. I purchased a
rare watch for my son when he was
born to give to him when he turns
twenty-one. It took me a long time to
find it. I traced it down to a gentleman
living in Ontario. He wouldn!t sell it but
I convinced him eventually. I asked
him to write my future-twenty-one
year old son a letter explaining the gift.
He ended up writing a beautiful letter
that has changed my perspective on
life. That!s right. Bring out that box of
Kleenex.
Are you into sports since Bump
is so heavily related to sports?
I love to watch sporting eventsand
collecting! I am a compulsivecollector.
Thank you so much for speaking
with me. What would you like
to leave our readers to think
about?
They should trust their instincts, trust
themselves and not over-think things.
It came to you for a reason so go with
it and back it a hundred per cent.
!"#$%"&'()&'&*$+(,-& .&//01233
67
Finance & Economics Science & Technology International Aairs Student Co. Business Entrepreneurship Biz Start Up
e National Finance Students Association
is a non-prot, student-run initiative, which
aims to increase the competitiveness of our
members in the job market. We achieve this
goal by creating networking opportunities,
oering support, and providing resources
that can be used to better equip oneself for a
transition from university to the workplace.
We are committed to creating a nationwide
network by bringing nance professionals,
students, and educators together
through our seminars, conferences, and
competitions. We are focused on fostering
personal development and growth among
our members, while accumulating tacit
knowledge and experience which can
be leveraged to gain a real competitive
advantage while seeking employment.
We invite you to explore your potential.
nfsa.ca
The National Finance Students Association
is a non-prot, student-run initiative, which
aims to increase the competitiveness of our
members in the job market.
We achieve this goal by creating
networking opportunities, offering support,
and providing resources that can be used to
better equip oneself for a transition from
university to the workplace.
We are committed to creating a nationwide
network by bringing nance professionals,
students, and educators together through our
seminars, conferences, and competitions.
We are focused on fostering personal
development and growth among our
members, while accumulating tacit
knowledge and experience which can be
leveraged to gain a real competitive advantage
while seeking employment.
We invite you to explore your potential.
nfsa.ca
Cheap initial investments
and low-risk industries make
franchises a realistic dream
Trends Finance & Economics
By Magdalene Arthur, Staff Writer
A Feasible Option for Graduates
ArbitrageMagazine.ca Fall 2011 69
!""#$%&'%()*+,-+./&($%(*'+01+233
Trends Finance & Economics
!"#$%&'%()*)#+,-./,0#1-%22#3,4-),
3
e! r e get t i ng
old. Yes, people
around us have
been trying to
convince us that.
But, although we!re edging closer
to 30, we still have all the time in
the worId to gure things out.

Fact: we can never get back lost
time. However, let us not dwell on
our ever-blossoming age or the grey
that is slowly but surely taking over
our scalps. Let us instead harness
our energy into the decisions that
will determine whether or not we!ll be
able to retire in style. Have you ever
considered owning a franchise?
I recently started working for a
magazine that focuses on Canadian
and Quebecois franchises. Much to
my dismay, their readership is mostly
composed of middle-aged men. What
happened to the younglings and
women? Starting a business from the
ground up can be quite daunting for
most, especially recent graduates who
do not necessarily have a huge capital
to work with. Purchasing a franchise
could be a very feasible option that
comes with a team of experts ensuring
the success of your venture.
In your franchise selection process,
it is essential to think like a student since
students, similar to professionals,
generally lead busy lives; and since
we were or still are in that position, we
can easily draw from that experience.
Here are a few franchise options that
may be interesting if we are to think
along those lines.
During those hard, busy, coffee-
drenched times, you needed to:
Take care of your pet (if you had
one).
AUSSIE PETMOBILE
Aussie Petmobile is a multi-
national company focused on pet
services. Founded in Australia in
1996, it expanded to the States in
1999, and in 2006, graced Canada
with its presence. The great thing
about this franchise is that it does
not require a real estate investment.
Professional groomers drive to the
clients home and groom their furry
friend in an environment it is familiar
with. The pet industry is low-risk as
every one who has a pet (arguably)
loves it and wants to keep its hygiene
at a healthy level. In fact, this industry
is the 7th largest in North-America.
In Canada alone, there are over 8
million cats & dogs. Aussie Petmobile
offers a repeat service, requires few
employees and is at the head of its
industry. The one downside would be
the $100,000 initial investment, which,
to its credit, does cover the costs of two
solar-powered Mercedes Benz vans,
outftted with air conditioning, heat,
electricity, water and environmentally-
friendly products, and exclusive
territory rights. However, if you get an
awesome job after graduation, it can
be quite an interesting opportunity.
There are also pay-as-you-go options.
There are various franchise
options out there, and you can
deniteIy nd something that
ts your interest and budget.
Clean your apartment because your
landlord promised to throw you out if
you didnt maintain the cleanliness of
the premises.
MERRY MAIDS
Merry Maids is a housecleaning
company started in 1979 in Nebraska.
The minimum cash requirement is
$25,000. Everyone needs a home,
but some people just dont have the
time or dont make the time to keep
things tidy. Thats where Merry Maids
comes in.
Drink more coffee, but coffee
shops are quite pricey so Coffee
News will have to do.
COFFEE NEWS
Coffee News is a world-wide
publication that grants you the
opportunity to work from home. It
is published weekly and delivered
to coffee shops, restaurants and
motels. Your job as a franchisee
would be to sell ad space to small
businesses in your region. Start-up
costs are only a few thousand dollars.
The actual content, described as light
and entertaining, is fully taken care
of by the franchisor. Entrepreneur
Magazine has listed Coffee news
as #1 in Advertising Services. It has
been in business since 1988 and
offers training and support to all its
franchisees.
Moral of the story: There are various
franchise options out there, and you
can defnitely fnd something that fts
your interest and budget. You will
need to consider the risk factor, along
with the average investment required
to launch your business. Remember,
think like a student!
A Feasible Option for Graduates
Fall 2011 ArbitrageMagazine.ca 70
STUDENT RESOURCES
Dinner with Herman Alves
Interview with Herman Alves.
Auto-Insurance Debunked: Toppling the Mighty Dictator
Understanding how Insurance Rates are calculated: what factors in and what does not.
B-Schools: Which One's For You?
Choosing a Business School for Graduate Studies
01
02
03
Your career: its never too early to start shaping it. University is a
fantastic time to explore your options and begin paving your path
for the future. But alas, where do you get started? ARB does its
part through its Student Resources section to guide you towards
rewards. In this issue, we take a leap forward and focus on your
post-undergraduate years. We debunk auto insurance myths, help
at the dinner table with Herman Alves, a Montreal businessman
who has made and lost millions and isnt afraid to say so. Join us;
you wont be disappointed!
STUDENT RESOURCES
Dinner with Herman Alves
Interview with Herman Alves.
Auto-Insurance Debunked: Toppling the Mighty Dictator
Understanding how Insurance Rates are calculated: what factors in and what does not.
B-Schools: Which One's For You?
Choosing a Business School for Graduate Studies
01
02
03
Your career: its never too early to start shaping it. University is a
fantastic time to explore your options and begin paving your path
for the future. But alas, where do you get started? ARB does its
part through its Student Resources section to guide you towards
rewards. In this issue, we take a leap forward and focus on your
post-undergraduate years. We debunk auto insurance myths, help
at the dinner table with Herman Alves, a Montreal businessman
who has made and lost millions and isnt afraid to say so. Join us;
you wont be disappointed!
Student Resource Student Resource
!
ts 6:00 oclock on a Wednesday
afternoon. I speak to Herman
Alves on the phone. He fnally
agrees to meet for a short
interview at 7:00 p.m. He tells
me to see him at his restaurant. I
need a shave, but I dont have the
time. I almost walked out the door
wearing sandals and a beater, but I
fgured l would wear something more
appropriate.
Alves was born in Fatima, Portugal.
It might have been 1957, but the living
conditions in Fatima were Stone Age
no electricity or running water, not
even toilets.
At the age of 5, Hermans father
left him and his mother in search of
a better life in Brazil. Alves and his
mother were left to work the land in
order to live. After experiencing social
alienation in Germany, his father
returned. Then the Alves family moved
to Montreal, where he lives now.
In the subway, its about 30 degrees
Celsius. I envy Montrealers and
their trendy summer outfts. l stride
hurriedly on Notre-Dame Street. I look
pretentious. People smoking outside
a dive bar shoot me sharp-eyed looks
and rattle in French.
!
ts 6:00 oclock on a Wednesday
afternoon. I speak to Herman
Alves on the phone. He fnally
agrees to meet for a short
interview at 7:00 p.m. He tells
me to see him at his restaurant. I
need a shave, but I dont have the
time. I almost walked out the door
wearing sandals and a beater, but I
fgured l would wear something more
appropriate.
Alves was born in Fatima, Portugal.
It might have been 1957, but the living
conditions in Fatima were Stone Age
no electricity or running water, not
even toilets.
At the age of 5, Hermans father
left him and his mother in search of
a better life in Brazil. Alves and his
mother were left to work the land in
order to live. After experiencing social
alienation in Germany, his father
returned. Then the Alves family moved
to Montreal, where he lives now.
In the subway, its about 30 degrees
Celsius. I envy Montrealers and
their trendy summer outfts. l stride
hurriedly on Notre-Dame Street. I look
pretentious. People smoking outside
a dive bar shoot me sharp-eyed looks
and rattle in French.
"#$%&'()$*'+,-./$01,22$3'41)'$
ArbitrageMagazine.ca Fall 2011 73
DINNER WITH HERMAN ALVES DINNER WITH HERMAN ALVES
Student Resource
I check my watch: its 6:56 p.m.
Behind a waving Portuguese fag,
the wall reads Bitoque. I pull on a
heavy door and enter the restaurant. I
sit down at the bar. A pretty waitress
asks me if I want a drink, I accept. I
quickly change my mind and ask for
iced water; it could be early for booze.
At 7:00 p.m. Herman is facing me.
He is agitated because the phone rang
and no one at the restaurant was able
to answer in time. Herman asks me
to sit at a table. He wears a grey suit,
no tie. He stammers a bit, but speaks
with confdence. His hand gestures
are exemplary of European culture.
He asks with a big smile, Would you
like something to eat?
The back of your recently published
book, Breaking Stones, says you have
made millions and lost millions, tell me
about that, I say. Herman pauses for
a second then says, On paper, I was
a millionaire at the age of 26, because
I started buying buildings at the age
18. But I lost everything, in 1984,
because of my divorce. I had to start
from scratch. I bought a restaurant
in a hot area of Montreal, but the
concept just didnt click; I made bad
deals, bought too many buildings too
fast, had problems with tenants. I was
at the brink of bankruptcy.
Herman has lived many lives
in only 50 years. He has done a
hilarious variety of jobs: worm
picker, club-owner, calche driver,
marketing consultant, and even a
political activist. He has endured
incredibly hard times. Creativity and
perseverance are Hermans keys to
phenomenal episodes in his life.
We are interrupted by a tall, middle-
age, tanned woman with perfect
make-up. She hands Herman a fat
envelope, then walks away. Herman
takes the envelope and says, Thats
my ex-wife, she does the accounting
for my restaurant. He chuckles.
So how did you recover after the
divorce?
Well, I say that if you're going
to make mistakes you're better off
making them when you're young, so
you have time to recover.
Herman finches to a paper cut
caused by an envelope, the one his
ex-wife just handed him.
- I divorced at the age of 27 after
5 years of marriage, so when I lost
everything, my only salvation was to
go back to school and learn enough
so I could land a decent job, then
start a new business. Education was
my way to get out of poverty. I have
always admired people, who began
with nothing and made millions.
For instance, the Bronfman family,
who started bootlegging liquor, later
formed the largest distiller of alcoholic
beverages world-wide.
In 1993, former mayor, Jean Dor,
introduced a surtax on the existing
Montreal business tax. My property
tax bills had tripled from the previous
year, said Herman. The city of
Montreal was collecting taxes on
business properties, whether there
was a tenant or not.
- l tried phoning the mayor's offce,
but nobody really wanted to listen.
So what drove your actions to
battle the Montreal surtax?
When you are the little guy, and you
feel like you are being trumped by the
big guy [governments or institutions],
you have to stand up and cry foul. I
dedicated a year of my life to fght this
tax. Not only did we win, the surtax
was abolished and declared illegal in
the courts. But when elections came
around, the electorates kicked out the
mayor they voted him out.
A phone rings. Herman answers his
cell phone in English. He switches
to Portuguese and says, We better
switch to Portuguese. Because of
my Spanish background, I gathered
bits and pieces from the conversation.
Suspicious.
Herman Alves has more than 25 years
of experience in customer service,
real estate, telecommunications,
entertainment and tourism. He is now
a father of three, a marketing consultant
and a motivational speaker.
Alves is the former president and
active member of Share the Warmth, a
charity that gives food and scholarships
to underprivileged children in Montreal.
He organizes the Table of Hope gala,
which aims to raise over $1 million to
beneft Share the Warmth. According
to The Gazette, the Table of Hope gala
raised $140,000 for Share the Warmth
in 2011.
There is an old saying that says: if
you love what you do, you never work
in your life.
We are interrupted again by the
waitress that brings us expresso coffee.
I stir the sugar in my coffee, though I
make sure to hold eye-contact. Herman
takes the thin, long sugar package and
says, Imagine this is a rope. Grab it.
As he pulls on the sugar package, If I
pull you with a rope, its easy to follow.
I let go.
Now hold your palm out.
Herman pushes the sugar package
against my hand, it bends. If I try to
push you with a rope, the rope has
no power, because it will bend and
fall. If you want to be pulled, you will
go somewhere. But if you want to be
pushed, you will go nowhere. Be certain
of what you want to do.
I remain silent.
What is your plan for the future?
I ask.
To have fun. I have my restaurant. I
let my sons run it. I want to teach them
the art of business. You want to grab
a beer?
I accept. It might be late enough for
booze.
!"#$%&'(#)&*+,-.#/0+11#2&30(&#
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;
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,
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;
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*
Fall 2011 ArbitrageMagazine.ca 74
Biz Start Up Trends Culture Finance & Economics Science & Technology International Affairs Student Co.
!"#$%&"'#()*++,&-.#(/*00#12,/%2
Toppling the Mighty Dictator
The Myths and Facts about Auto Insurance
3
he whims of the Insurance
industry have remained
largely obscure to most
of its subjects. At the very
least, drivers understand
that accidents are bad and younger
drivers pay higher rates. In truth, they
are correct, but insurance rates account
for more than age and claims. It is a
numbers game. Imagine an unsettling
concoction of every claim associated
with a particular vehicle model, or
particular age group or particular gender
and you will get a better picture of how
rates are calculated.
Insurance is quite simply a pool of
risks; and, unfortunately, were all in the
deep end. Every driver feels the impact
of other peoples claims. Insurance
companies spread the wealth, if
you may, among all their clients. It is
important that no one bears the full
impact and costs of an accident. But if
it still seems unclear, think Communism
the claims of the few shared among
the many.
But all is not lost; in this case, I will
play the rebellious protagonist who will
lead the people to ousting the tyrant.
We cannot overthrow him, but we can
educate ourselves with vital information
to outwit him. There are a few things
you need to know when dealing with
insurance companies. I have compiled
a list that will dispel timely myths, and
otherwise help young drivers save a
buck or two.
BUY RED! THEY!LL ONLY BE GREEN
WITH ENVY.
Contrary to popular belief, colour is not
a determining factor when Insurance
companies calculate their rates. As
a matter of fact, most insurers never
know most of their clients vehicle
colours. If you dont believe me, ask
your broker. Vehicle colour is simply
not relevanta driver in a blue car
travelling 140 kilometres per hour
(km/h) will most certainly attract more
attention than a red one travelling half
the speed unless that red car is a
Ferrari, then its a whole other story.
WHAT!S MY AB? NO, NOT BLOOD
TYPE.
AB stands for Accident Benefts. That's
important to remember because thats
exactly the reason why auto rates have
skyrocketed as of late. On September
1, 2010, the Ontario Government and
the private insurers introduced a new
mandate meant to control the payouts
on frivolous claims.
Most accident benefts coverages
have been cut in half, but that!s not even
Auto Insurance
ArbitrageMagazine.ca Fall 2011 75
4++56/2*/,'&#7"#892,6/,&*#:;#<%%
Biz Start Up Trends Culture Finance & Economics Science & Technology International Affairs Student Co.
!"#$%&"'#()*++,&-.#(/*00#12,/%2
the kicker. The cost for your accident
benefits have also substantially
increased, meaning, the cost of your
auto insurance has increased as well.
There are ways, however, for young
drivers to control their costs. Simply
ask, What!s my AB? Vehicle rates
are tracked by three claim codes: CL:
Collision (1-99), CP: Comprehensive
(1-99), AB: Accident Benefts (1-5).
Most drivers should be concerned with
their vehicles AB: 1 is good, 5 is bad.
Vehicles with a higher AB rating are
likely to see higher insurance rates. If
you!re getting quotes, don!t hesitate to
ask your broker for your vehicle!s AB
rating and the rating for other vehicles
that you are interested in.
TO CLAIM OR NOT TO CLAIM...Every
year, drivers make claims for accidents
that they think may be too expensive to
cover themselves. Other drivers claim
because they think it is wrong to lie
to their insurance companies If you
are one of these people, don!t dial out
just yet.
Insurance companies actually
encourage their clients to think long
term before fling a claim. Many drivers
fle claims for minor scratches that would
have better been resolved between
operators; others claim single vehicle
accidents with minor property damage.
These types of claims are best resolved
without company involvement because
they create unnecessary claims and
if at-fault, which most single vehicle
accidents are, you lose more than your
deductible. At-fault accidents can see
up to 7 years of increased premiums.
BELIEVE ME, AN ANNOYING MOOSE
IS BETTER THAN A DEAD ONE.
If you just can!t avoid that moon-walking
moose dancing in the street, just be
happy he!s not dead. Moose and deer
create hazards every year for drivers
and insurance claims are fraught with
animal hits. This situation seems clear
cut, but it should really be a cause for
concern for drivers.
There are two possible claim results
from hitting an animal on the streets.
A moving animal is considered a fying
object in terms of insurance and falls
under comprehensive coverage this
is always not-at-fault. On the other side,
a stationary object like a standing moose
or a dead one is always considered
collisionof course this is always at-
fault. So if you have a comprehensive
claim at hand, please defer to Bowie
for more dancing in the street.
ABRACADABRA! SORRY, THERES
NO MAGIC DISCOUNT BUTTON.If
you have a cellular phone, you have
likely phoned your provider threatening
to leave to a competitor who offered
you lower rates at one point or another.
Then with concerns for customer
retention, the company probably found
a special offer or discounts to offer you;
Abracadabra! I call it the magic discount
button.
Unfortunately, insurance does not
work the same way. Rates are set
and approved yearly by the Financial
Services Commission of Ontario
(FSCO). Once rates are set, all bets
are in and companies must stick to
them. If your insurance provider offers
you a special rate, it is either because
it is a temporary solution until your
policy renewal, they have held out
on you, or they!ve somehow altered
your coverage. Be proactive and ask
questions.
WHEN YOU HIT THE ROAD, DONT
LEAVE IT ALL BEHIND.
Everyone needs a fresh start once in
a while, just moving away and starting
fresh. The open road can be great,
leaving all your troubles behind. I am
all for it, but insurance asks that you to
do otherwise.
Each province has different rules
for insurance and requires a specifc
provincial license to pull your insurance
reports. To avoid any hassle, be sure to
ask for a Letter of Experience (LOE) and
a driver!s abstract before you leave your
province. Without these documents,
some companies may not be able to
validate your insurance experience.
GOT DEMERITS... AND?
Many factors affect your insurance
premi ums. Acci dents, dri vi ng
convictions, suspensions and gaps
of insurance all play a part in the way
rates are calculated. Of course, driving
records are important to insurance
companies, but in terms of driver rating,
demerits have no impact. Despite
governmental focus on demerit points,
there is actually no direct impact on your
insurance premiums. Brokers actually
do not even look at demerits on a motor
vehicle report.
As I have previously explained,
insurance is a numbers game. In terms
of factors to consider, less is more. The
industry is rife with David and Goliath
comparisons, but with these tips you
may just be able to appease the giant. It
is near impossible to topple this dictator,
but with educated decisions and
collaborative efforts, we may be able
to take back some of our democracy.
For more information, visit the many
resources at your disposal, including:
Insurance Bureau of Canada (IBC)
www.ibc.ca or Financial Services
Commission of Ontario (FSCO)www.
fsco.gov.on.ca. And if your broker says,
this is madness, you say, madness,
no, this is Sparta!
Kenyo Smalling is currently an
insurance broker with GP Car and
Home Inc. All the above information
has been confrmed with other brokers
and insurance managers. Kenyo is
also a creative and technical writer
specializing in media, current events
and marketing. You can check out
more material, please go to: http://
rhetoricallyspeaking-kenyosmalling.
blogspot.com
Toppling the Mighty Dictator
The Myths and Facts about Auto Insurance
Fall 2011 ArbitrageMagazine.ca 76
Student Co.
By: Samadrita Guin, Staff
5 steps to help you choose a Grad School
B-SCHOOLS: WHICH ONE'S FOR YOU?
By Samadrita Guin, Staff Writer
ArbitrageMagazine.ca Fall 2011 77
Student Co.
By: Samadrita Guin, Staff
Choosing the right Business
School for you.
S
o I know what you are
thinking. I still have 50
billion years before I have to
even start thinking about
attending grad school. Well,
its not as far away as you would like it
to be. lndeed, you might be in your frst
year still living up those crazy parties
or in your fourth year, ready to walk
into those internships and jobs. But,
soon enough, those of you who want
an MBA will have to start looking into
taking the GMATs and visiting
campuses, trying to pick where to
spend the two most important years
of your life.
Making the decision to attend a
B-school is only half the battle. The
other half is choosing the one that not
only caters to your demands, but also
is the place that provides you with the
right opportunities to grow. Every
B-school is different in its strengths
and weaknesses.
Here are the top fve criterion on
which basing your decision will make
life a lot easier:
1. That piece of paper that you receive
after all that hard work.
Lets face it. At the end of the day,
its all about the degree: that one
piece of paper that says Yes, I spent
$70000 a year in order to be an asset
to the business world." So, fnd out
what kind of academic programs are
available at your list of B-schools.
Decide what you want: do you want a
full-time two year MBA, an Executive
MBA, or a part-time online MBA? This
website might be of some help to
narrow down your search: http://
www. mba. com/ school s- and-
pr ogr ams/ t ypes- of - b- school -
programs.aspx. Check to see if the
schools offer concentrations in
specifc areas that you would like to
specialize in and decide on the top
few that offer the perfect program
that you are looking for.
2. Cha-ching!
The annual cost of an MBA can
range anywhere from $20,000 to
$100,000 a year. Scary, right? Yes, this
is why it is crucial that you start saving
up right now if you want to attend one
of those hot-shot top-of-the-list
B-schools. So, look into the Finances
section on every B-school website, in
order to determine what their annual
costs would be, and whether you can
afford them. Check to see if fnancial
aid options are available. Try using this
website to search any available fnancial
aid tools: http://www.topmba.com/
mba-admissions/mba-fnance/apply-
mba-scholarships. The more affordable
university programs should successfully
narrow down your search.
3. The reputation and exclusiveness
Who doesnt want to land a job with
a starting salary of six fgures right out
of grad school? But, to get those
lucrative jobs out there, you have to
attend one of the top few schools in
the country. But with attending an
extremely reputable school comes
extreme selectivity. Some schools are
highly exclusive and selective about
their applicants. Thats why its
important to pay attention to your
grades right now, so you can get the
GPA or GMAT score you need to get
into the B-school of your choice.
4. Placement statistics and career
development
We all want that job. That job that
you have been working years and years
for, so you can fulfll all of those things
on your To-do-list-before-I-die. So
check your B-schools placement
statistics, and contact their career
management offce. Research what
kinds of initiatives they take in order to
ensure your recruitment post
graduation. Also, make sure to check
out recruiters who recruit on campus.
Set your career goals from before so
that you can choose the B-schools
where recruiters of your choice hire.
5 steps to help you choose a Grad School
By Samadrita Guin, Staff Writer
Fall 2011 ArbitrageMagazine.ca 78
Student Co.
5. Student Life
Do you want to live on residence?
What kind of off-campus housing
options are available? Are there enough
extra-curricular activities for grad
students to get involved in? Apart from
the academics, the social and extra-
curricular aspects of your school will
have a huge impact on your well-being
and growth. So, fnd out aspects about
student life, and pick the ones that
cater to you the most
So there you have it folks! The top
fve criterion that should, for the most
part, help you narrow your search
down to about four or less B-schools.
Its important to start looking right
now, instead of waiting until after you
graduate. Because, at that point, you
might just realize, Oh, my marks arent
high enough for [Insert Name here]
Business School!.
By: Samadrita Guin, Staff
Good luck with your hunt!
>LH[[OL(9)OVWL`V\UK
the B-school that works the
best for you!
By Samadrita Guin, Staff Writer
ArbitrageMagazine.ca Fall 2011 79
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