Korea-Japan People's Statement against US requirement for sendig troops to Iraq
October 25, 2003
Peace lovers around the world fought against war in Iraq. However, the US government headed by Mr. Bush brought about this war of aggression in Iraq. Furthermore, it is now requesting nations worldwide, such as Korea and Japan, to dispatch forces to Iraq. The United States' request for dispatching forces to Iraq is an expression of unilateral doctrine and violence, as well as an attempt to shift responsibility for the war onto the international community, when in actuality, the war occurred for the sole economic benefit of the United States.
The whole world thinks that the war in Iraq, started by the U.S., is the one of the most immoral in world history, and obviously a war of aggression. It was made possible through lies and hypocrisy, dogmatism and supremacy. The weapons of mass destruction were not, after all, found in Iraq, and the U.S. insinuation that Saddam Hussein was somehow tied to the 9/11 bombing of the World Trade Center was an outright lie. The U.S. justification for war in Iraq was fraudulent, and the war is revealed to be a unilateral war of aggression for the sole benefit of the U.S. The world defines the U.S. as the enemy of peace because the U.S. destroyed the 21st century chance for world peace and friendship. The U.S. could have chosen peace, but it chose war instead.
The war in Iraq is still being waged, and it is possible because of U.S. immorality. The citizens of Iraq are sacrificed in the struggle for supremacy over petroleum and power in the Middle East. Mr. Bush declared the end of the war on May 1st, but since then we see more death and injury in the Middle East. Anti-U.S. sentiment is spreading over the people in Iraq and the Islamic people. The Islamic resistance continues its vicious circle, with terrorism and retaliatory attacks toward U.S. forces.
The international dispatching of forces to Iraq will strengthen the US policy of invasion. Countries dispatching forces to Iraq will become an enemy and an aggressor, a threat to the Islamic people. We peace lovers from Korea and Japan declare that we will never allow the dispatching of forces to Iraq. And we want to keep peace in East Asia and the world. We peace lovers from Korea and Japan have confidence that dispatching forces to Iraq will bring more fighting and more tragedy to Iraq.
To end the war in Iraq, we must withdraw U.S. forces, not organize a multi-national force in Iraq. The US must recognize the sovereign rights of the Iraqi people, and as such, take heed when they declare that they do not want to be occupied.
The governments of Korea and Japan must never act as the US has acted, as the aggressor, and must never bring disgrace to their respective nations and their people by dispatching forces to Iraq. The people of Korea and Japan declare that they will not give a cent, much less sacrifice a life, for the expense of this war of aggression.
We ask the governments of Korea and Japan to reject the US request for dispatching of forces to Iraq, to withdraw the decision to dispatch forces to Iraq; to takes steps towards a peaceful international society. Furthermore we reject the militarization of Japan under the aegis of US war policy.
We emphasize that we reject the dispatching of forces to Iraq for the sake of peace on the Korean Peninsula, on which there is much potential for war. Korea and Japan should not bring war to East Asia by dispatching their forces to Iraq. They should act instead to keep peace in East Asia.
We peace lovers from Korea and Japan will do our best to resist US policy regarding war, and to resist US pressure to dispatch our forces to Iraq. We the people of Korea and Japan, will continue to earn the confidence of the p eople through truth, under peace and friendship of the world.
Our Request
1. The US must withdraw forces from Iraq.
2. Governments of Korea and Japan must withdraw the decision to dispatch forces to Iraq.
3. The US should stop their unjust pressuring of other countries to dispatch forces, and instead, should give support to Iraq through the international community.
Signed by
300 Japanese NGOs
351 Korean NGOs
Peace lovers around the world fought against war in Iraq. However, the US government headed by Mr. Bush brought about this war of aggression in Iraq. Furthermore, it is now requesting nations worldwide, such as Korea and Japan, to dispatch forces to Iraq. The United States' request for dispatching forces to Iraq is an expression of unilateral doctrine and violence, as well as an attempt to shift responsibility for the war onto the international community, when in actuality, the war occurred for the sole economic benefit of the United States.
The whole world thinks that the war in Iraq, started by the U.S., is the one of the most immoral in world history, and obviously a war of aggression. It was made possible through lies and hypocrisy, dogmatism and supremacy. The weapons of mass destruction were not, after all, found in Iraq, and the U.S. insinuation that Saddam Hussein was somehow tied to the 9/11 bombing of the World Trade Center was an outright lie. The U.S. justification for war in Iraq was fraudulent, and the war is revealed to be a unilateral war of aggression for the sole benefit of the U.S. The world defines the U.S. as the enemy of peace because the U.S. destroyed the 21st century chance for world peace and friendship. The U.S. could have chosen peace, but it chose war instead.
The war in Iraq is still being waged, and it is possible because of U.S. immorality. The citizens of Iraq are sacrificed in the struggle for supremacy over petroleum and power in the Middle East. Mr. Bush declared the end of the war on May 1st, but since then we see more death and injury in the Middle East. Anti-U.S. sentiment is spreading over the people in Iraq and the Islamic people. The Islamic resistance continues its vicious circle, with terrorism and retaliatory attacks toward U.S. forces.
The international dispatching of forces to Iraq will strengthen the US policy of invasion. Countries dispatching forces to Iraq will become an enemy and an aggressor, a threat to the Islamic people. We peace lovers from Korea and Japan declare that we will never allow the dispatching of forces to Iraq. And we want to keep peace in East Asia and the world. We peace lovers from Korea and Japan have confidence that dispatching forces to Iraq will bring more fighting and more tragedy to Iraq.
To end the war in Iraq, we must withdraw U.S. forces, not organize a multi-national force in Iraq. The US must recognize the sovereign rights of the Iraqi people, and as such, take heed when they declare that they do not want to be occupied.
The governments of Korea and Japan must never act as the US has acted, as the aggressor, and must never bring disgrace to their respective nations and their people by dispatching forces to Iraq. The people of Korea and Japan declare that they will not give a cent, much less sacrifice a life, for the expense of this war of aggression.
We ask the governments of Korea and Japan to reject the US request for dispatching of forces to Iraq, to withdraw the decision to dispatch forces to Iraq; to takes steps towards a peaceful international society. Furthermore we reject the militarization of Japan under the aegis of US war policy.
We emphasize that we reject the dispatching of forces to Iraq for the sake of peace on the Korean Peninsula, on which there is much potential for war. Korea and Japan should not bring war to East Asia by dispatching their forces to Iraq. They should act instead to keep peace in East Asia.
We peace lovers from Korea and Japan will do our best to resist US policy regarding war, and to resist US pressure to dispatch our forces to Iraq. We the people of Korea and Japan, will continue to earn the confidence of the p eople through truth, under peace and friendship of the world.
Our Request
1. The US must withdraw forces from Iraq.
2. Governments of Korea and Japan must withdraw the decision to dispatch forces to Iraq.
3. The US should stop their unjust pressuring of other countries to dispatch forces, and instead, should give support to Iraq through the international community.
Signed by
300 Japanese NGOs
351 Korean NGOs
Mahathir is right: Jews do rule the world
SPENGLER
Just because you are paranoid it doesn't prove that they are not out to get you. Paranoid, to be sure, was Malaysian Prime Minister Mahathir Mohamad's allegation that the "Jews rule this world by proxy" on October 16. Whether Dr Mahathir himself is paranoid, or whether he adapted his words to the paranoia of his audience makes little difference. Through the twisted prism of paranoia, the facts on the ground do indeed suggest that the Jews rule the world.
Europeans who turn up their noses at Malaysia's leader should recall that just 60 years ago, Europe's official ideology (under Nazi conquest) agreed with Mahathir's claim that the Jews "invented and successfully promoted socialism, communism, human rights and democracy". That is where Mahathir doubtless got the idea in the first place. Not only Adolf Hitler, but the highest circles of the Catholic Church believed that communism was a Jewish plot, as a Swiss priest, Father Martin Rhonheimer, documents in the November 2003 issue of First Things.
Not since Hitler has the leader of an important country claimed that democracy itself was a Jewish invention, at least in the modern period. Let us however not engage in what Leo Strauss called "reductio ad Hitlerum," rejecting ideas merely because Hitler invented them, and take Mahathir's claim at face value.
The Jews did indeed invent democracy, in its modern form, although not quite in the way he imagines.
Modern (as opposed to ancient Greek or Roman) democracy stems from the Protestant motto "solo scriptorum", "only the Bible", by which every man must interpret scripture for himself. To begin with, Protestantism was unimaginable without Jewish theologians (who exposed the incompatibilities of free will and original sin), not to mention Jewish bible translators. In such a world, congregations must elect their church elders (Presbyterians) or even their pastors (Congregationalists), rather than accept church hierarchy. If democracy rules ecclesiastical affairs, why not then secular affairs as well?
Only Anglo-Saxon Protestantism had the opportunity to take on a political form, thanks in large part to the colonization of America. America's so-called revolution was in fact a second English civil war, in which the Whigs supported the American rebels against the Tory government. England's democratic impulse came from the extreme wing of its Protestants, from such sects as the Separatists who founded the Massachusetts Bay Colony, or the Quakers who founded Pennsylvania. Only on American soil did radical Protestantism flourish unimpeded by monarchy and established church.
America's founders set forth with messianic ambitions. They saw themselves as a new Israel setting out to found a new Jerusalem, as in John Winthrop's famous sermon "On Christian Charity". "We shall find that the God of Israel is among us, when 10 of us shall be able to resist a thousand of our enemies, when He shall make us a praise and glory, that men shall say of succeeding plantations, the Lord make it like that of New England. For we must consider that we shall be as a city upon a hill, the eyes of all people are upon us."
Jews played a small role in the creation of the American colonies, and a marginal role in the revolution, but American democracy stemmed from Jewish ideas. That is quite different from Mahathir's claim that Jews "invented" democracy. No conspiracy can invent democracy of the American kind. Massachusetts farmers formed a battle line against British regulars at Lexington and Concord in 1775 because self-governance was to them a matter of life and death. Such a sentiment is alien to Mahathir's world. His imagination does not encompass people like the radical Protestants of 18th century New England.
American democracy grew from a seed-crystal of representative institutions, beginning, as noted, with the election of church officials. Americans are used to governing their own affairs through a vast number of institutions at the capillary level of society. It astonished me to discover that the election of local school boards in American towns can excite more partisan passion than a presidential election. Unlike Europe, where education ministries dispense a centralized budget, American towns tax themselves for elementary and secondary education. Towns with better schools attract higher-income residents who can afford to pay for better education, in a virtuous cycle. Hospitals, public libraries and even the fire brigade draw on private resources and volunteer labor.
That brings us to the touchy matter of conspiracies. Mahathir's world is populated by conspiracies. They are as real and tangible to him as the chair on which he sits. In the rough-and-tumble of democratic governance, conspiracies help little, because all the important issues will come to light one way or another. What Bernard Lewis calls "consultative" governance in the Islamic world, however, only can exist through conspiracies.
There does not exist to my knowledge a self-governing school board, hospital committee or fire brigade anywhere in Arab countries. But the meanest peasant may approach the loftiest ruler for the privilege of a few moments' worth of whispered pleading. Beneficent and merciful rulers will take pity on their subjects. If one wishes to influence the ruler, numerous of his subjects must agree in advance what they shall whisper in his ear, that is, literally, to conspire.
That helps explain why Mahathir can account for the facts as he observes them by no means other than conspiracy. There is another dimension to this as well, namely the theological. If the constitution is the bone of American democracy, radical Protestant theology forms its bone marrow. What is the relationship between Islamic theology and government? Does it help explain why we encounter what Lewis calls "consultative" as opposed to "representative" forms of government in the Islamic world?
Imitatio dei, emulation of God, is the most important practical consequence of religion. Religious men act according to their conception of the attributes of the deity they worship. Let us tug a bit at this thread, and see where it leads us.
Remember that the Jewish God enjoys only a qualified sort of omnipotence. His sympathy with mankind, his creation, compels him to suffer along with his creatures. He cannot help but hear the cry of innocent blood, the complaint of the widow and orphan, the mistreated stranger and the oppressed slave (Professor James Kugel of Harvard makes his hoary argument in The God of Old). He is the God of the town meeting, of the popular assembly, of the democrats. With good reason, Friedrich Nietzsche labelled the Jewish deity a God of slaves. He permits the likes of Abraham and Moses to give him a hard time over such things as the destruction of Sodom, or exterminating the sinners among the Israelites.
When ancient Israel demanded that their leader, the prophet Samuel, appoint a king (I Samuel 8), God complained, "They have rejected me as their king." He tells Samuel to warn the people against kings. When the people demand a king nonetheless, God tells Samuel, "Give them a king." The Jews' God chose for his people a despised race of slaves. He humbles himself by sympathizing with the weak. The Christian God even came to earth and allowed himself to be crucified. He loves the poor and weak. Indeed, weakness ineluctably draws forth his love. Jewish and Christian theologians speak of "divine humility".
Not so Allah, the beneficent, the merciful. "For Islam, the notion that man's failings more powerfully awake God's love than man's merits is an absurd, indeed an impossible thought. Allah has pity upon human weaknesses, but the idea that he loves weakness more than strength is a form of divine humility that is foreign to the God of Mohammed," wrote the Jewish theologian Franz Rosenzweig.
Imitatio dei may explain why Americans and Muslims seek quite different attributes in their political leaders. More important than strength and intelligence in the character of an American presidential candidate is humility. Whatever one thinks of President George W Bush, he cultivates the same sort of folksy image that served former president Jimmy Carter so well. In this regard one thinks of Bill Clinton, who hid his intellectual arrogance so effectively, or Ronald Reagan, who cloaked his ideological fervor in self-deprecating humor.
More than anything else, Americans want their leaders to listen to them. A president had better be a better listener than a talker. That is what Americans expect from their God, after all, and all the more so from a president who is a mere human.
The sort of leader who evoked adulation in the Arab world, eg, a Gamal Abdel Nasser, produces only revulsion among Americans. The trouble is that the gap between American and Islamic views of the world may be unbridgeable. The more Americans learn about the Islamic world, the less they may be inclined to sympathize with the Islamic cause.
In November 2001, for example, 31 percent of Americans told an opinion poll that Islam had a great deal in common with their religion. Now, only 22 percent believe that this is the case. That is why Bush will not fire General William Boykin, who scandalized the news media by suggesting that the "war against terror" had a religious dimension. If barely a one-fifth of Americans see a commonality between Islam and their own religion, who can blame Boykin - who heads the hunt for Osama bin Laden - for stating what everyone believes?
Since September 11, 2001, the government of the US, its news media and its academic institutions have made extraordinary efforts to emphasize the common goals of Islam and the West. "Islam is a religion of peace," Bush has repeated countless times. Spokesmen for Islamic organizations in the US and abroad have enjoyed an unprecedented degree of access to the American media, and the American public has been exposed to the Islamic viewpoint to an extent never before imaginable.
The result appears to be precisely the opposite of what the government, news media and academia intended. Americans show less sympathy than before to Islam, and, correspondingly, more inclination to support the Israeli cause.
Why, Arabs (and many Europeans) ask themselves, should the greatest power in the world care about the fate of a few million leftovers from an ancient past, colonizing a corner of the Mediterranean in order to preserve their battered nationhood? Why would America make so many enemies and lose so many friends over the Jews? Can anything but a vast and insidious conspiracy explain such irrational behavior?
That is a fatal error. America may be a great power, but it is composed of individuals who consider themselves weak. They want the respect of their leaders and the protection of their laws even when they are weak, poor and despised. Their ancestors came to America in the hope of finding such a haven. Fairness and sympathy for the underdog are not merely a sentimental issue in the US; they are woven into the fabric of America's being. America is the political realization of the slave-religion, the cult of the creator of heaven and earth who cannot help but answer the cry of the widow, the fatherless, the poor, and the stranger. The more you tell Americans that they should abandon their friends in the interest of political advantage, the likelier they are to reach for their guns (and most of them own guns).
They want a Jewish sort of God who hears the prayer of the widow and the fatherless, and they want a government that protects the widow and the fatherless from the powerful and the arrogant. Through America's inherent sense of justice, Jews do rule the world, just as Mahathir believes, although not of course in the way he imagines it.
Mahathir, to be sure, has deplored the violent responses of some in the Islamic world, which merely repels potential friends. Yet he has done just as much damage to the image of Islam in the West. Merely by being himself, he contributed to the deep sense of unease that Americans have concerning the character of the Islamic world.
Great understanding among cultures does not always make things better. Sometimes it makes things worse. Adolf Eichmann, it should be recalled, studied Hebrew with a Berlin rabbi, the better to understand the Jews he wished to exterminate. The leaders of the Islamic terrorist organizations are not throwbacks to the 10th century, but Western-educated science students.
In his own paranoid fashion, Mahathir has advanced the cause of mutual understanding between the Islamic world and America. Mahathir has made clear that the Jews do, indeed, rule the world, at least in the sense that he and his compatriots understand the words "to rule". And he has made clear to Americans that the filter through which the Islamic world views America is a form of paranoia that cannot quickly be cured.
http://www.atimes.com
28 October 2003
Just because you are paranoid it doesn't prove that they are not out to get you. Paranoid, to be sure, was Malaysian Prime Minister Mahathir Mohamad's allegation that the "Jews rule this world by proxy" on October 16. Whether Dr Mahathir himself is paranoid, or whether he adapted his words to the paranoia of his audience makes little difference. Through the twisted prism of paranoia, the facts on the ground do indeed suggest that the Jews rule the world.
Europeans who turn up their noses at Malaysia's leader should recall that just 60 years ago, Europe's official ideology (under Nazi conquest) agreed with Mahathir's claim that the Jews "invented and successfully promoted socialism, communism, human rights and democracy". That is where Mahathir doubtless got the idea in the first place. Not only Adolf Hitler, but the highest circles of the Catholic Church believed that communism was a Jewish plot, as a Swiss priest, Father Martin Rhonheimer, documents in the November 2003 issue of First Things.
Not since Hitler has the leader of an important country claimed that democracy itself was a Jewish invention, at least in the modern period. Let us however not engage in what Leo Strauss called "reductio ad Hitlerum," rejecting ideas merely because Hitler invented them, and take Mahathir's claim at face value.
The Jews did indeed invent democracy, in its modern form, although not quite in the way he imagines.
Modern (as opposed to ancient Greek or Roman) democracy stems from the Protestant motto "solo scriptorum", "only the Bible", by which every man must interpret scripture for himself. To begin with, Protestantism was unimaginable without Jewish theologians (who exposed the incompatibilities of free will and original sin), not to mention Jewish bible translators. In such a world, congregations must elect their church elders (Presbyterians) or even their pastors (Congregationalists), rather than accept church hierarchy. If democracy rules ecclesiastical affairs, why not then secular affairs as well?
Only Anglo-Saxon Protestantism had the opportunity to take on a political form, thanks in large part to the colonization of America. America's so-called revolution was in fact a second English civil war, in which the Whigs supported the American rebels against the Tory government. England's democratic impulse came from the extreme wing of its Protestants, from such sects as the Separatists who founded the Massachusetts Bay Colony, or the Quakers who founded Pennsylvania. Only on American soil did radical Protestantism flourish unimpeded by monarchy and established church.
America's founders set forth with messianic ambitions. They saw themselves as a new Israel setting out to found a new Jerusalem, as in John Winthrop's famous sermon "On Christian Charity". "We shall find that the God of Israel is among us, when 10 of us shall be able to resist a thousand of our enemies, when He shall make us a praise and glory, that men shall say of succeeding plantations, the Lord make it like that of New England. For we must consider that we shall be as a city upon a hill, the eyes of all people are upon us."
Jews played a small role in the creation of the American colonies, and a marginal role in the revolution, but American democracy stemmed from Jewish ideas. That is quite different from Mahathir's claim that Jews "invented" democracy. No conspiracy can invent democracy of the American kind. Massachusetts farmers formed a battle line against British regulars at Lexington and Concord in 1775 because self-governance was to them a matter of life and death. Such a sentiment is alien to Mahathir's world. His imagination does not encompass people like the radical Protestants of 18th century New England.
American democracy grew from a seed-crystal of representative institutions, beginning, as noted, with the election of church officials. Americans are used to governing their own affairs through a vast number of institutions at the capillary level of society. It astonished me to discover that the election of local school boards in American towns can excite more partisan passion than a presidential election. Unlike Europe, where education ministries dispense a centralized budget, American towns tax themselves for elementary and secondary education. Towns with better schools attract higher-income residents who can afford to pay for better education, in a virtuous cycle. Hospitals, public libraries and even the fire brigade draw on private resources and volunteer labor.
That brings us to the touchy matter of conspiracies. Mahathir's world is populated by conspiracies. They are as real and tangible to him as the chair on which he sits. In the rough-and-tumble of democratic governance, conspiracies help little, because all the important issues will come to light one way or another. What Bernard Lewis calls "consultative" governance in the Islamic world, however, only can exist through conspiracies.
There does not exist to my knowledge a self-governing school board, hospital committee or fire brigade anywhere in Arab countries. But the meanest peasant may approach the loftiest ruler for the privilege of a few moments' worth of whispered pleading. Beneficent and merciful rulers will take pity on their subjects. If one wishes to influence the ruler, numerous of his subjects must agree in advance what they shall whisper in his ear, that is, literally, to conspire.
That helps explain why Mahathir can account for the facts as he observes them by no means other than conspiracy. There is another dimension to this as well, namely the theological. If the constitution is the bone of American democracy, radical Protestant theology forms its bone marrow. What is the relationship between Islamic theology and government? Does it help explain why we encounter what Lewis calls "consultative" as opposed to "representative" forms of government in the Islamic world?
Imitatio dei, emulation of God, is the most important practical consequence of religion. Religious men act according to their conception of the attributes of the deity they worship. Let us tug a bit at this thread, and see where it leads us.
Remember that the Jewish God enjoys only a qualified sort of omnipotence. His sympathy with mankind, his creation, compels him to suffer along with his creatures. He cannot help but hear the cry of innocent blood, the complaint of the widow and orphan, the mistreated stranger and the oppressed slave (Professor James Kugel of Harvard makes his hoary argument in The God of Old). He is the God of the town meeting, of the popular assembly, of the democrats. With good reason, Friedrich Nietzsche labelled the Jewish deity a God of slaves. He permits the likes of Abraham and Moses to give him a hard time over such things as the destruction of Sodom, or exterminating the sinners among the Israelites.
When ancient Israel demanded that their leader, the prophet Samuel, appoint a king (I Samuel 8), God complained, "They have rejected me as their king." He tells Samuel to warn the people against kings. When the people demand a king nonetheless, God tells Samuel, "Give them a king." The Jews' God chose for his people a despised race of slaves. He humbles himself by sympathizing with the weak. The Christian God even came to earth and allowed himself to be crucified. He loves the poor and weak. Indeed, weakness ineluctably draws forth his love. Jewish and Christian theologians speak of "divine humility".
Not so Allah, the beneficent, the merciful. "For Islam, the notion that man's failings more powerfully awake God's love than man's merits is an absurd, indeed an impossible thought. Allah has pity upon human weaknesses, but the idea that he loves weakness more than strength is a form of divine humility that is foreign to the God of Mohammed," wrote the Jewish theologian Franz Rosenzweig.
Imitatio dei may explain why Americans and Muslims seek quite different attributes in their political leaders. More important than strength and intelligence in the character of an American presidential candidate is humility. Whatever one thinks of President George W Bush, he cultivates the same sort of folksy image that served former president Jimmy Carter so well. In this regard one thinks of Bill Clinton, who hid his intellectual arrogance so effectively, or Ronald Reagan, who cloaked his ideological fervor in self-deprecating humor.
More than anything else, Americans want their leaders to listen to them. A president had better be a better listener than a talker. That is what Americans expect from their God, after all, and all the more so from a president who is a mere human.
The sort of leader who evoked adulation in the Arab world, eg, a Gamal Abdel Nasser, produces only revulsion among Americans. The trouble is that the gap between American and Islamic views of the world may be unbridgeable. The more Americans learn about the Islamic world, the less they may be inclined to sympathize with the Islamic cause.
In November 2001, for example, 31 percent of Americans told an opinion poll that Islam had a great deal in common with their religion. Now, only 22 percent believe that this is the case. That is why Bush will not fire General William Boykin, who scandalized the news media by suggesting that the "war against terror" had a religious dimension. If barely a one-fifth of Americans see a commonality between Islam and their own religion, who can blame Boykin - who heads the hunt for Osama bin Laden - for stating what everyone believes?
Since September 11, 2001, the government of the US, its news media and its academic institutions have made extraordinary efforts to emphasize the common goals of Islam and the West. "Islam is a religion of peace," Bush has repeated countless times. Spokesmen for Islamic organizations in the US and abroad have enjoyed an unprecedented degree of access to the American media, and the American public has been exposed to the Islamic viewpoint to an extent never before imaginable.
The result appears to be precisely the opposite of what the government, news media and academia intended. Americans show less sympathy than before to Islam, and, correspondingly, more inclination to support the Israeli cause.
Why, Arabs (and many Europeans) ask themselves, should the greatest power in the world care about the fate of a few million leftovers from an ancient past, colonizing a corner of the Mediterranean in order to preserve their battered nationhood? Why would America make so many enemies and lose so many friends over the Jews? Can anything but a vast and insidious conspiracy explain such irrational behavior?
That is a fatal error. America may be a great power, but it is composed of individuals who consider themselves weak. They want the respect of their leaders and the protection of their laws even when they are weak, poor and despised. Their ancestors came to America in the hope of finding such a haven. Fairness and sympathy for the underdog are not merely a sentimental issue in the US; they are woven into the fabric of America's being. America is the political realization of the slave-religion, the cult of the creator of heaven and earth who cannot help but answer the cry of the widow, the fatherless, the poor, and the stranger. The more you tell Americans that they should abandon their friends in the interest of political advantage, the likelier they are to reach for their guns (and most of them own guns).
They want a Jewish sort of God who hears the prayer of the widow and the fatherless, and they want a government that protects the widow and the fatherless from the powerful and the arrogant. Through America's inherent sense of justice, Jews do rule the world, just as Mahathir believes, although not of course in the way he imagines it.
Mahathir, to be sure, has deplored the violent responses of some in the Islamic world, which merely repels potential friends. Yet he has done just as much damage to the image of Islam in the West. Merely by being himself, he contributed to the deep sense of unease that Americans have concerning the character of the Islamic world.
Great understanding among cultures does not always make things better. Sometimes it makes things worse. Adolf Eichmann, it should be recalled, studied Hebrew with a Berlin rabbi, the better to understand the Jews he wished to exterminate. The leaders of the Islamic terrorist organizations are not throwbacks to the 10th century, but Western-educated science students.
In his own paranoid fashion, Mahathir has advanced the cause of mutual understanding between the Islamic world and America. Mahathir has made clear that the Jews do, indeed, rule the world, at least in the sense that he and his compatriots understand the words "to rule". And he has made clear to Americans that the filter through which the Islamic world views America is a form of paranoia that cannot quickly be cured.
http://www.atimes.com
28 October 2003
The flight to India
The jobs Britain stole from the Asian subcontinent 200 years ago are now being returned
George Monbiot
Tuesday October 21, 2003
The Guardian
If you live in a rich nation in the English-speaking world, and most of your work involves a computer or a telephone, don't expect to have a job in five years' time. Almost every large company which relies upon remote transactions is starting to dump its workers and hire a cheaper labour force overseas. All those concerned about economic justice and the distribution of wealth at home should despair. All those concerned about global justice and the distribution of wealth around the world should rejoice. As we are, by and large, the same people, we have a problem.
Britain's industrialisation was secured by destroying the manufacturing capacity of India. In 1699, the British government banned the import of woollen cloth from Ireland, and in 1700 the import of cotton cloth (or calico) from India. Both products were forbidden because they were superior to our own. As the industrial revolution was built on the textiles industry, we could not have achieved our global economic dominance if we had let them in. Throughout the late 18th and 19th centuries, India was forced to supply raw materials to Britain's manufacturers, but forbidden to produce competing finished products. We are rich because the Indians are poor.
Now the jobs we stole 200 years ago are returning to India. Last week the Guardian revealed that the National Rail Enquiries service is likely to move to Bangalore, in south- west India. Two days later, the HSBC bank announced that it was cutting 4,000 customer service jobs in Britain and shifting them to Asia. BT, British Airways, Lloyds TSB, Prudential, Standard Chartered, Norwich Union, Bupa, Reuters, Abbey National and Powergen have already begun to move their call centres to India. The British workers at the end of the line are approaching the end of the line.
There is a profound historical irony here. Indian workers can outcompete British workers today because Britain smashed their ability to compete in the past. Having destroyed India's own industries, the East India Company and the colonial authorities obliged its people to speak our language, adopt our working practices and surrender their labour to multinational corporations. Workers in call centres in Germany and Holland are less vulnerable than ours, as Germany and Holland were less successful colonists, with the result that fewer people in the poor world now speak their languages.
The impact on British workers will be devastating. Service jobs of the kind now being exported were supposed to make up for the loss of employment in the manufacturing industries which disappeared overseas in the 1980s and 1990s. The government handed out grants for cybersweatshops in places whose industrial workforce had been crushed by the closure of mines, shipyards and steelworks. But the companies running the call centres appear to have been testing their systems at government expense before exporting them somewhere cheaper.
It is not hard to see why most of them have chosen India. The wages of workers in the service and technology industries there are roughly one tenth of those of workers in the same sectors over here. Standards of education are high, and almost all educated Indians speak English. While British workers will take call-centre jobs only when they have no choice, Indian workers see them as glamorous. One technical support company in Bangalore recently advertised 800 jobs. It received 87,000 applications. British call centres moving to India can choose the most charming, patient, biddable, intelligent workers the labour market has to offer.
There is nothing new about multinational corporations forcing workers in distant parts of the world to undercut each other. What is new is the extent to which the labour forces of the poor nations are also beginning to threaten the security of our middle classes. In August, the Evening Standard came across some leaked consultancy documents suggesting that at least 30,000 executive positions in Britain's finance and insurance industries are likely to be transferred to India over the next five years. In the same month, the American consultants Forrester Research predicted that the US will lose 3.3 million white-collar jobs between now and 2015. Most of them will go to India.
Just over half of these are menial "back office" jobs, such as taking calls and typing up data. The rest belong to managers, accountants, underwriters, computer programmers, IT consultants, biotechnicians, architects, designers and corporate lawyers. For the first time in history, the professional classes of Britain and America find themselves in direct competition with the professional classes of another nation. Over the next few years, we can expect to encounter a lot less enthusiasm for free trade and globalisation in the parties and the newspapers which represent them. Free trade is fine, as long as it affects someone else's job.
So a historical restitution appears to be taking place, as hundreds of thousands of jobs, many of them good ones, flee to the economy we ruined. Low as the wages for these positions are by comparison to our own, they are generally much higher than those offered by domestic employers. A new middle class is developing in cities previously dominated by caste. Its spending will stimulate the economy, which in turn may lead to higher wages and improved conditions of employment. The corporations, of course, will then flee to a cheaper country, but not before they have left some of their money behind. According to the consultants Nasscom and McKinsey, India - which is always short of foreign exchange - will be earning some $17bn a year from outsourced jobs by 2008.
On the other hand, the most vulnerable communities in Britain are losing the jobs which were supposed to have rescued them. Almost two-thirds of call-centre workers are women, so the disadvantaged sex will slip still further behind. As jobs become less secure, multinational corporations will be able to demand ever harsher conditions of employment in an industry which is already one of the most exploitative in Britain. At the same time, extending the practices of their colonial predecessors, they will oblige their Indian workers to mimic not only our working methods, but also our accents, our tastes and our enthusiasms, in order to persuade customers in Britain that they are talking to someone down the road. The most marketable skill in India today is the ability to abandon your identity and slip into someone else's.
So is the flight to India a good thing or a bad thing? The only reasonable answer is both. The benefits do not cancel out the harm. They exist, and have to exist, side by side. This is the reality of the world order Britain established, and which is sustained by the heirs to the East India Company, the multinational corporations. The corporations operate only in their own interests. Sometimes these interests will coincide with those of a disadvantaged group, but only by disadvantaging another.
For centuries, we have permitted ourselves to ignore the extent to which our welfare is dependent on the denial of other people's. We begin to understand the implications of the system we have created only when it turns against ourselves.
www.monbiot.com
The Independent, London
Britain's thriving new export trade: jobs to Asia
By Katherine Griffiths and Barrie Clement
18 October 2003
The TUC urged the Government to set up a commission to investigate the outsourcing of work to Asia yesterday, as rail service authorities admitted they have already moved some operations to India.
At the end of a week that has seen thousands of bank jobs moving to Asia, it emerged that rail passenger inquiries about train times are already being answered in Bangalore.
Operators of that service initially said they were only evaluating bids from other countries to provide such services. But they have now revealed that questions about the best way to get from Gravesend in Kent to Llanelli in south Wales are being handled in India.
The disclosure came in a statement from the Association of Train Operating Companies, e-mailed late yesterday, which said that existing suppliers had already contracted out part of the much-criticised National Rail Inquiries to the sub-continent.
Roger Lyons, president of the TUC, said: "We do not want to be Luddites and where it is cheaper for companies to get the equivalent level of work, there is no point in contesting it. But we have asked for a commission to be established to look at ways for people in Britain to be up-skilled and can do more complex jobs."
Britain's main unions also reacted furiously yesterday to news that HSBC, Britain's largest bank, planned to outsource 4,000 jobs from the UK to India, Malaysia and China within the next two and a half years. While HSBC said it would do its best to keep compulsory redundancies to an "absolute minimum", it admitted that some enforced cuts would be inevitable.
The financial union Unifi said it was "very, very angry" at the prospect of compulsory redundancies. It was also "furious" at the scale and pace of HSBC's cost-cutting move, which will see 1,500 jobs go next year, a further 2,000 in 2005 and a further 500 in 2006. HSBC will close its call centres in Sheffield, Birmingham, Swansea and Brentwood in Essex.
The move, the single largest removal of jobs to Asia by a British company, is part of a growing trend among employers, who are attracted to the developing world because of the low salaries and high level of education in countries such as India and China.
BT drew protests last month over its plans to switch its directory inquiries service to India, as did the insurer Prudential last year. After wrangling with unions, Prudential agreed to avoid compulsory redundancies as part of its plan. An HSBC spokesman said: "We are an international business and have a responsibility to manage ourselves internationally. There are completely different cost ratios overseas and if we did not take advantage of that we would not be being responsible to our shareholders."
Mr Lyons countered: "This is not a one-way street where companies can simply make lots of profits. We have carried out an independent survey and it showed 63 per cent of consumers would take into account whether a company has outsourced jobs in ... banking and mortgage advice in deciding whether to use it."
Estimates vary about how many British IT and call-centre jobs could end up in places such as Hyderabad in India. Some consultants have estimated that 200,000 will go from Britain, compared with more than two million from the United States, which has been moving IT and call-centre jobs to places such as Brazil. It is not just in the banking and IT industries that moves have been made offshore. Earlier this year, Waterford Wedgwood decided to close two factories and move production from Stoke-on-Trent to Asia.
The National Outsourcing Association, which advises companies that want to move abroad, argues the trend is not bad for British workers. "The saving for companies is in the region of 40 per cent for a company and it makes sense to have strong companies because it safeguards jobs in other areas of the business and also protects other companies that might have a relationship with that company," said Nigel Roxburgh, director of the association. Companies and business bodies argue that lower costs mean more profits, which Gordon Brown can use to boost the Exchequer's coffers.
A spokesperson for the Department of Trade and Industry said outsourcing was a purely commercial decision.
© 2003 Independent Digital (UK) Ltd
George Monbiot
Tuesday October 21, 2003
The Guardian
If you live in a rich nation in the English-speaking world, and most of your work involves a computer or a telephone, don't expect to have a job in five years' time. Almost every large company which relies upon remote transactions is starting to dump its workers and hire a cheaper labour force overseas. All those concerned about economic justice and the distribution of wealth at home should despair. All those concerned about global justice and the distribution of wealth around the world should rejoice. As we are, by and large, the same people, we have a problem.
Britain's industrialisation was secured by destroying the manufacturing capacity of India. In 1699, the British government banned the import of woollen cloth from Ireland, and in 1700 the import of cotton cloth (or calico) from India. Both products were forbidden because they were superior to our own. As the industrial revolution was built on the textiles industry, we could not have achieved our global economic dominance if we had let them in. Throughout the late 18th and 19th centuries, India was forced to supply raw materials to Britain's manufacturers, but forbidden to produce competing finished products. We are rich because the Indians are poor.
Now the jobs we stole 200 years ago are returning to India. Last week the Guardian revealed that the National Rail Enquiries service is likely to move to Bangalore, in south- west India. Two days later, the HSBC bank announced that it was cutting 4,000 customer service jobs in Britain and shifting them to Asia. BT, British Airways, Lloyds TSB, Prudential, Standard Chartered, Norwich Union, Bupa, Reuters, Abbey National and Powergen have already begun to move their call centres to India. The British workers at the end of the line are approaching the end of the line.
There is a profound historical irony here. Indian workers can outcompete British workers today because Britain smashed their ability to compete in the past. Having destroyed India's own industries, the East India Company and the colonial authorities obliged its people to speak our language, adopt our working practices and surrender their labour to multinational corporations. Workers in call centres in Germany and Holland are less vulnerable than ours, as Germany and Holland were less successful colonists, with the result that fewer people in the poor world now speak their languages.
The impact on British workers will be devastating. Service jobs of the kind now being exported were supposed to make up for the loss of employment in the manufacturing industries which disappeared overseas in the 1980s and 1990s. The government handed out grants for cybersweatshops in places whose industrial workforce had been crushed by the closure of mines, shipyards and steelworks. But the companies running the call centres appear to have been testing their systems at government expense before exporting them somewhere cheaper.
It is not hard to see why most of them have chosen India. The wages of workers in the service and technology industries there are roughly one tenth of those of workers in the same sectors over here. Standards of education are high, and almost all educated Indians speak English. While British workers will take call-centre jobs only when they have no choice, Indian workers see them as glamorous. One technical support company in Bangalore recently advertised 800 jobs. It received 87,000 applications. British call centres moving to India can choose the most charming, patient, biddable, intelligent workers the labour market has to offer.
There is nothing new about multinational corporations forcing workers in distant parts of the world to undercut each other. What is new is the extent to which the labour forces of the poor nations are also beginning to threaten the security of our middle classes. In August, the Evening Standard came across some leaked consultancy documents suggesting that at least 30,000 executive positions in Britain's finance and insurance industries are likely to be transferred to India over the next five years. In the same month, the American consultants Forrester Research predicted that the US will lose 3.3 million white-collar jobs between now and 2015. Most of them will go to India.
Just over half of these are menial "back office" jobs, such as taking calls and typing up data. The rest belong to managers, accountants, underwriters, computer programmers, IT consultants, biotechnicians, architects, designers and corporate lawyers. For the first time in history, the professional classes of Britain and America find themselves in direct competition with the professional classes of another nation. Over the next few years, we can expect to encounter a lot less enthusiasm for free trade and globalisation in the parties and the newspapers which represent them. Free trade is fine, as long as it affects someone else's job.
So a historical restitution appears to be taking place, as hundreds of thousands of jobs, many of them good ones, flee to the economy we ruined. Low as the wages for these positions are by comparison to our own, they are generally much higher than those offered by domestic employers. A new middle class is developing in cities previously dominated by caste. Its spending will stimulate the economy, which in turn may lead to higher wages and improved conditions of employment. The corporations, of course, will then flee to a cheaper country, but not before they have left some of their money behind. According to the consultants Nasscom and McKinsey, India - which is always short of foreign exchange - will be earning some $17bn a year from outsourced jobs by 2008.
On the other hand, the most vulnerable communities in Britain are losing the jobs which were supposed to have rescued them. Almost two-thirds of call-centre workers are women, so the disadvantaged sex will slip still further behind. As jobs become less secure, multinational corporations will be able to demand ever harsher conditions of employment in an industry which is already one of the most exploitative in Britain. At the same time, extending the practices of their colonial predecessors, they will oblige their Indian workers to mimic not only our working methods, but also our accents, our tastes and our enthusiasms, in order to persuade customers in Britain that they are talking to someone down the road. The most marketable skill in India today is the ability to abandon your identity and slip into someone else's.
So is the flight to India a good thing or a bad thing? The only reasonable answer is both. The benefits do not cancel out the harm. They exist, and have to exist, side by side. This is the reality of the world order Britain established, and which is sustained by the heirs to the East India Company, the multinational corporations. The corporations operate only in their own interests. Sometimes these interests will coincide with those of a disadvantaged group, but only by disadvantaging another.
For centuries, we have permitted ourselves to ignore the extent to which our welfare is dependent on the denial of other people's. We begin to understand the implications of the system we have created only when it turns against ourselves.
www.monbiot.com
The Independent, London
Britain's thriving new export trade: jobs to Asia
By Katherine Griffiths and Barrie Clement
18 October 2003
The TUC urged the Government to set up a commission to investigate the outsourcing of work to Asia yesterday, as rail service authorities admitted they have already moved some operations to India.
At the end of a week that has seen thousands of bank jobs moving to Asia, it emerged that rail passenger inquiries about train times are already being answered in Bangalore.
Operators of that service initially said they were only evaluating bids from other countries to provide such services. But they have now revealed that questions about the best way to get from Gravesend in Kent to Llanelli in south Wales are being handled in India.
The disclosure came in a statement from the Association of Train Operating Companies, e-mailed late yesterday, which said that existing suppliers had already contracted out part of the much-criticised National Rail Inquiries to the sub-continent.
Roger Lyons, president of the TUC, said: "We do not want to be Luddites and where it is cheaper for companies to get the equivalent level of work, there is no point in contesting it. But we have asked for a commission to be established to look at ways for people in Britain to be up-skilled and can do more complex jobs."
Britain's main unions also reacted furiously yesterday to news that HSBC, Britain's largest bank, planned to outsource 4,000 jobs from the UK to India, Malaysia and China within the next two and a half years. While HSBC said it would do its best to keep compulsory redundancies to an "absolute minimum", it admitted that some enforced cuts would be inevitable.
The financial union Unifi said it was "very, very angry" at the prospect of compulsory redundancies. It was also "furious" at the scale and pace of HSBC's cost-cutting move, which will see 1,500 jobs go next year, a further 2,000 in 2005 and a further 500 in 2006. HSBC will close its call centres in Sheffield, Birmingham, Swansea and Brentwood in Essex.
The move, the single largest removal of jobs to Asia by a British company, is part of a growing trend among employers, who are attracted to the developing world because of the low salaries and high level of education in countries such as India and China.
BT drew protests last month over its plans to switch its directory inquiries service to India, as did the insurer Prudential last year. After wrangling with unions, Prudential agreed to avoid compulsory redundancies as part of its plan. An HSBC spokesman said: "We are an international business and have a responsibility to manage ourselves internationally. There are completely different cost ratios overseas and if we did not take advantage of that we would not be being responsible to our shareholders."
Mr Lyons countered: "This is not a one-way street where companies can simply make lots of profits. We have carried out an independent survey and it showed 63 per cent of consumers would take into account whether a company has outsourced jobs in ... banking and mortgage advice in deciding whether to use it."
Estimates vary about how many British IT and call-centre jobs could end up in places such as Hyderabad in India. Some consultants have estimated that 200,000 will go from Britain, compared with more than two million from the United States, which has been moving IT and call-centre jobs to places such as Brazil. It is not just in the banking and IT industries that moves have been made offshore. Earlier this year, Waterford Wedgwood decided to close two factories and move production from Stoke-on-Trent to Asia.
The National Outsourcing Association, which advises companies that want to move abroad, argues the trend is not bad for British workers. "The saving for companies is in the region of 40 per cent for a company and it makes sense to have strong companies because it safeguards jobs in other areas of the business and also protects other companies that might have a relationship with that company," said Nigel Roxburgh, director of the association. Companies and business bodies argue that lower costs mean more profits, which Gordon Brown can use to boost the Exchequer's coffers.
A spokesperson for the Department of Trade and Industry said outsourcing was a purely commercial decision.
© 2003 Independent Digital (UK) Ltd
Thaksin stakes a claim to be the region's leader
SCMP-Thursday, October 23, 2003
SIMON MONTLAKE in Bangkok
As the final Apec forum delegates bid farewell to Bangkok and head home, many will take away vivid memories of Thailand's cultural fanfare and slick hospitality.
After months of security drills, cleanup campaigns and preparatory talks, this week's Asia-Pacific Economic Co-operation summit went off without a hitch.
Prime Minister Thaksin Shinawatra will hope they also carry away a strong impression of a Thai leader firmly in the driving seat, both at home and in the region.
Observers said Apec provided a glitzy international coming-out party for Mr Thaksin, whose star had risen fast within Asia in the past two years.
The summit also marked the final fling for the combative Malaysian Prime Minister Mahathir Mohamad, who hands over power to his deputy next week.
That coincidence, coupled with continued political drift in Indonesia, formerly a diplomatic powerhouse in Southeast Asia, has created an opening for Thailand.
"Thaksin is proving himself to be the leader of the region," said Thitinan Pongsuhdirak, a political analyst at Chulalongkorn University in Bangkok. "He has all the attributes: political longevity, strong leadership skills . . . He even has a brand of economic development: Thaksinomics."
Speaking at the close of Apec, a weary-looking Mr Thaksin sought to play down his emerging role as Southeast Asia's top statesman.
"It's the duty of every leader to make initiatives and put them into action," he said.
Since taking office in 2001, Mr Thaksin's emphasis on domestic consumer spending, as well as export growth, has put Thailand back on its economic feet for the first time since the Asian crisis six years ago. That revival in national confidence has bolstered his standing at home and sparked a flurry of diplomatic and economic initiatives from Bangkok.
These include getting Japan to join a US$1 billion Asian bond fund, setting up a forum called the Asian Co-operation Dialogue and a joint push with Singapore for faster economic integration within the Association of Southeast Asian Nations.
Mr Thaksin has also burnished his image as a free trader by signing bilateral deals with China and India, and angling for similar accords with the US and Australia.
Foreign firms are sitting up and taking note. The US-Asean Business Council, a US lobby group, told a conference in Singapore that the baton of Southeast Asia leadership has passed to Thailand.
"If you look around the region and think of a current leader of a country who is going to be . . . leader for the next decade, Mr Thaksin really could be there," said council president Ernest Bower.
In an interview this week with the Bangkok Post, Singapore Prime Minister Goh Chok Tong, who is due to step down by 2005, also hailed the changing of the guard.
"Dr Mahathir would be the leader of Asean, but he is retiring this month, so Malaysia will have a new prime minister. In Singapore there will be a new one in a matter of one or two years. I think the one who can drive things is Mr Thaksin."
But to critics at home, Mr Thaksin's popularity on the Asian stage is anything but encouraging, particularly when praise comes from authoritarian governments.
Activists in Thailand were infuriated by a clampdown on public protests during the Apec summit and a visa blacklist imposed on foreign anti-globalisation protesters.
Some accuse the country's millionaire prime minister - who has approval ratings of 70 per cent - of using his wealth and power to build a one-party state and snuff out critical voices.
"Thaksin has learned from the models of Malaysia and Singapore how to exercise power through the parliamentary system," said Somchai Homlaor, a human rights lawyer. "If civil society isn't strong enough to monitor and balance the government, it will be dangerous."
But Mr Thaksin denies he is clamping down on free speech and says Thailand's constitution provides ample checks and balances on his parliamentary majority. "Don't worry that I can be a dictator, I can't," he said recently. "The system can't allow it."
His aides point out that the constitution was rewritten in 1997 to promote stable governments over the whims of seat-swapping coalitions that persisted in the past.
SIMON MONTLAKE in Bangkok
As the final Apec forum delegates bid farewell to Bangkok and head home, many will take away vivid memories of Thailand's cultural fanfare and slick hospitality.
After months of security drills, cleanup campaigns and preparatory talks, this week's Asia-Pacific Economic Co-operation summit went off without a hitch.
Prime Minister Thaksin Shinawatra will hope they also carry away a strong impression of a Thai leader firmly in the driving seat, both at home and in the region.
Observers said Apec provided a glitzy international coming-out party for Mr Thaksin, whose star had risen fast within Asia in the past two years.
The summit also marked the final fling for the combative Malaysian Prime Minister Mahathir Mohamad, who hands over power to his deputy next week.
That coincidence, coupled with continued political drift in Indonesia, formerly a diplomatic powerhouse in Southeast Asia, has created an opening for Thailand.
"Thaksin is proving himself to be the leader of the region," said Thitinan Pongsuhdirak, a political analyst at Chulalongkorn University in Bangkok. "He has all the attributes: political longevity, strong leadership skills . . . He even has a brand of economic development: Thaksinomics."
Speaking at the close of Apec, a weary-looking Mr Thaksin sought to play down his emerging role as Southeast Asia's top statesman.
"It's the duty of every leader to make initiatives and put them into action," he said.
Since taking office in 2001, Mr Thaksin's emphasis on domestic consumer spending, as well as export growth, has put Thailand back on its economic feet for the first time since the Asian crisis six years ago. That revival in national confidence has bolstered his standing at home and sparked a flurry of diplomatic and economic initiatives from Bangkok.
These include getting Japan to join a US$1 billion Asian bond fund, setting up a forum called the Asian Co-operation Dialogue and a joint push with Singapore for faster economic integration within the Association of Southeast Asian Nations.
Mr Thaksin has also burnished his image as a free trader by signing bilateral deals with China and India, and angling for similar accords with the US and Australia.
Foreign firms are sitting up and taking note. The US-Asean Business Council, a US lobby group, told a conference in Singapore that the baton of Southeast Asia leadership has passed to Thailand.
"If you look around the region and think of a current leader of a country who is going to be . . . leader for the next decade, Mr Thaksin really could be there," said council president Ernest Bower.
In an interview this week with the Bangkok Post, Singapore Prime Minister Goh Chok Tong, who is due to step down by 2005, also hailed the changing of the guard.
"Dr Mahathir would be the leader of Asean, but he is retiring this month, so Malaysia will have a new prime minister. In Singapore there will be a new one in a matter of one or two years. I think the one who can drive things is Mr Thaksin."
But to critics at home, Mr Thaksin's popularity on the Asian stage is anything but encouraging, particularly when praise comes from authoritarian governments.
Activists in Thailand were infuriated by a clampdown on public protests during the Apec summit and a visa blacklist imposed on foreign anti-globalisation protesters.
Some accuse the country's millionaire prime minister - who has approval ratings of 70 per cent - of using his wealth and power to build a one-party state and snuff out critical voices.
"Thaksin has learned from the models of Malaysia and Singapore how to exercise power through the parliamentary system," said Somchai Homlaor, a human rights lawyer. "If civil society isn't strong enough to monitor and balance the government, it will be dangerous."
But Mr Thaksin denies he is clamping down on free speech and says Thailand's constitution provides ample checks and balances on his parliamentary majority. "Don't worry that I can be a dictator, I can't," he said recently. "The system can't allow it."
His aides point out that the constitution was rewritten in 1997 to promote stable governments over the whims of seat-swapping coalitions that persisted in the past.
What’s that in euros?
The Spectator, London
18 October 2003
If the euro replaces the dollar as the world's reserve currency — and reports from Russia last week suggest it might — there is likely to be a high price to pay. Simon Nixon reports It has always been hard to imagine what the problem must be to which the answer is the euro. For most of the past three years, the idea that the single currency might one day emerge as a genuine alternative to the dollar as a global reserve currency has been laughable. Instead, the euro has looked like the thing eurosceptics always maintained it was: a reckless monetary experiment that stands for the word of no government, that relies on the good faith of no country, that cannot even police its own stability pact, and that deservedly saw its value plummet in the foreign exchange markets. But if the idea that the euro could become a rival to the dollar was a joke, then the joke may be on us. In the past 18 months, the euro has risen more than 30 per cent against the dollar. The dollar was already buckling under the strain of America's giant trade and budget deficits. Now, following the Iraq war, politics has entered the equation. Suddenly eurozone policymakers sense the opportunity to realise their ambitions to create a rival to the dollar. We should all be worried. Their efforts to promote the euro could trigger currency wars which will leave the whole world worse off.
The lengths to which the eurozone will go to supplant the dollar can be seen in reports, last week, that Russia is considering selling its oil in euros rather than dollars. On the face of it, this seems perfectly rational: Russia sells most of its oil to Europe, so such a move would save on currency conversion. But in reality, talk of pricing oil in euros is pure politics, says Yevgeny Gavrilenkov, a former adviser to President Putin and managing director of Troika Dialog, a Russian investment bank. 'There is minimal economic benefit to either Russia or the eurozone to be gained from such a move.'
The idea came from France and Germany and its aim is to undermine the dollar. The fact that oil and other commodities are priced in dollars underpins America's role as a global reserve currency and by extension its economic supremacy. Other countries are obliged to buy dollars to trade. This gives America the freedom to keep printing dollars without sparking inflation, enabling it to fund wars, giant trade deficits, government-spending programmes and tax cuts. If the EU could persuade oil producers to price oil in euros, it would be a hugely symbolic victory for the single currency. The euro-plotters hope that if Russia, the world's second largest oil producer, starts pricing its oil in euros, other countries will follow suit. Indeed, Iraq made the switch in November 2000, in a show of defiance that some conspiracy theorists say sealed the fate of the Saddam regime. Iran, another member of the 'axis of evil', has been openly considering making the switch since 1999. Venezuela is already selling part of its oil under a barter system, thus avoiding using any currency. And last year, a senior Opec official made a speech speculating that it could make economic sense for the oil producers' cartel to price its oil in euros in the future. Of course, Opec has considered such switches before. 'Every time the dollar goes through a rough patch, you get this talk,' says Roger Diwan of consultancy group PFC Energy. 'It happens about once every three years.' However, until now, Saudi Arabia has always blocked any such move. But now even the Saudis are wavering.
Last year, a former US ambassador to Saudi Arabia told a committee of the US Congress: 'One of the major things the Saudis have historically done, in part out of friendship with the US, is to insist that oil continues to be priced in dollars. Therefore the US Treasury can print money and buy oil, which is an advantage no other country has. With the emergence of other currencies and with strains in the relationship, I wonder whether there will not be again, as there has been in the past, people in Saudi Arabia who raise the question of why they should be so kind to the United States.'
If the oil producers turn their backs on the US dollar, the ramifications for the global economy would be immense. At the very least, demand for euros would surge as oil importers would need to buy euros to buy oil. But this would be just the beginning. As things stand, oil exporters keep the billions of dollars they receive from the sale of their oil in their central bank reserves. Similarly, oil importers are obliged to keep large dollar reserves to pay for their oil. The fear is that if oil were priced in euros, both oil exporters and importers would switch a significant proportion of their reserves into euros, thus triggering a stampede out of the dollar into euros.
Many in the mid-1990s warned that if the euro ever did emerge as a rival reserve currency, it would lead to dangerous volatility in the currency markets. But what makes the current situation so serious is that the US currency is already under siege as never before. Since the end of the second world war, the US dollar has been the undisputed reserve currency of the world. It has been universally regarded as the safest and most reliable store of value available. Any country trying to maintain the value of its own currency has had no option but to hold billions of dollars in its central bank reserves. Two thirds of central bank reserves are dollar-denominated.
But global investors are beginning to lose faith in the greenback. Previous reserve currencies were usually backed by a scarce commodity, usually gold. Countries that ran up trade deficits were obliged to settle their debts in gold. This put a limit on how far into debt a country could sink. But that system came to an end in 1971, when the Nixon administration, faced with the spiralling costs of the Vietnam war, left the Gold Standard. Since the 1970s, Americans have been free to spend as much as the world will lend it. And since the rest of the world needs dollars for its reserves, US debts have spiralled to previously unimaginable levels.
The US current account deficit now stands at some $600 billion a year and America now needs to attract more than $1.5 billion every day from foreign investors to fund its debts. Not surprisingly, foreign investors are beginning to doubt the wisdom of lending America any more of their savings. Over the last year, foreign investors have turned away from America in droves. Instead, the US current account deficit is being financed largely by the intervention of Asian central banks determined to shore up the dollar to maintain the competitive advantage of their own manufacturing industries. In the second quarter of this year, Asian central banks financed more than half the current account deficit. Yet despite this unprecedented intervention, the dollar is still sinking.
'The position of the dollar today is similar to that of sterling in the 1920s and 1930s, when sterling ceased to be the automatic global reserve currency and started to face competition from other currencies, notably the dollar,' says Paul Donovan, an economist at the investment bank UBS. Before the first world war, Britain's balance of payments had been unassailable, but the cost of war and the subsequent disruption to trade cast doubt on its ability to meet its obligations. The Bank of England had to increase its holdings of gold to shore up sterling, and in 1931 was forced to devalue.
Even after 1931, Britons continued to live beyond their means, consuming far more than they produced. As a result, the current account deteriorated further, much as America's current account is deteriorating today. Worse, these deficits became harder to finance. British investors preferred to invest their money abroad, in countries where productivity growth and returns were higher, rather than in the UK, where prospects were dampened by protectionism and the trade unions. During the second world war, the deficits grew so large that it became impossible to defend sterling. The pound was devalued and the US dollar, backed by gold, became the new global reserve currency.
The Americans recognise that they now face a challenge to their economic hegemony, but are at a loss as to how to respond. The US is caught in a bind. On the one hand, the US treasury secretary, John Snow, wants Asian countries to stop intervening to prop up the dollar because he says it is costing American jobs. On the other hand, the government desperately needs the Asians to keep buying its Treasury securities in order to finance the cost of the war and George Bush's tax cuts.
Instead, the Bush administration is opting for ever more unorthodox measures to preserve US economic leadership. There has been a sharp rise in protectionism, in the form of giant subsidies for farmers, the steel industry and the collapsed World Trade Organisation talks in Cancun, Mexico. The protection of US jobs has now replaced access to global markets at the top of the political agenda. And America is increasingly forced to use its military strength to shore up its strategic interests around the world.
None of these measures is likely to boost confidence in the long-term value of the dollar. But can the world's central banks switch their reserves from dollars into euros without causing mayhem in the global economy? Last month's G7 Dubai communiqué was a clear attempt to engineer an orderly realignment of currencies. But the danger is that if Asian central banks do stop buying dollars, the result will be a devastating collapse in the US currency. At worst, this could lead to rising US inflation and interest rates, a deep recession, and a stock-market and property-market crash. The rest of the world would suffer a disastrous collapse in trade.
The plotters do not believe this will happen, says one well- placed City economist. Faced with the prospect of a collapse in the dollar, they believe the US will come to the negotiating table, just as they did with the Louvre Accord in 1986, the last time there was a collapse in the dollar. The result will be a new, pegged exchange rate system that will prevent the dollar-euro exchange rate from falling too far. Instead, the US will be forced to unwind its imbalances by raising interest rates and cutting spending. According to this European dream, America will have to scale back its overseas adventures and to share global leadership with the EU.
There is no doubt that those who are pushing for Russia and other oil-producing countries to price their oil in euros are playing for high stakes. In the post-Iraq world, it is by no means clear that an elegant, negotiated solution to a future currency crisis will be achievable. The ambitions of Europe and America are diverging across a range of issues. Europe believes America's vast trade deficit is its Achilles' heel, which it thinks it can use to hobble American power. But in choosing to fight America on the issue of currency, the very instrument of US economic hegemony, Europe risks driving a wedge between the two continents. Perhaps that is what the architects of the euro wanted all along.
18 October 2003
If the euro replaces the dollar as the world's reserve currency — and reports from Russia last week suggest it might — there is likely to be a high price to pay. Simon Nixon reports It has always been hard to imagine what the problem must be to which the answer is the euro. For most of the past three years, the idea that the single currency might one day emerge as a genuine alternative to the dollar as a global reserve currency has been laughable. Instead, the euro has looked like the thing eurosceptics always maintained it was: a reckless monetary experiment that stands for the word of no government, that relies on the good faith of no country, that cannot even police its own stability pact, and that deservedly saw its value plummet in the foreign exchange markets. But if the idea that the euro could become a rival to the dollar was a joke, then the joke may be on us. In the past 18 months, the euro has risen more than 30 per cent against the dollar. The dollar was already buckling under the strain of America's giant trade and budget deficits. Now, following the Iraq war, politics has entered the equation. Suddenly eurozone policymakers sense the opportunity to realise their ambitions to create a rival to the dollar. We should all be worried. Their efforts to promote the euro could trigger currency wars which will leave the whole world worse off.
The lengths to which the eurozone will go to supplant the dollar can be seen in reports, last week, that Russia is considering selling its oil in euros rather than dollars. On the face of it, this seems perfectly rational: Russia sells most of its oil to Europe, so such a move would save on currency conversion. But in reality, talk of pricing oil in euros is pure politics, says Yevgeny Gavrilenkov, a former adviser to President Putin and managing director of Troika Dialog, a Russian investment bank. 'There is minimal economic benefit to either Russia or the eurozone to be gained from such a move.'
The idea came from France and Germany and its aim is to undermine the dollar. The fact that oil and other commodities are priced in dollars underpins America's role as a global reserve currency and by extension its economic supremacy. Other countries are obliged to buy dollars to trade. This gives America the freedom to keep printing dollars without sparking inflation, enabling it to fund wars, giant trade deficits, government-spending programmes and tax cuts. If the EU could persuade oil producers to price oil in euros, it would be a hugely symbolic victory for the single currency. The euro-plotters hope that if Russia, the world's second largest oil producer, starts pricing its oil in euros, other countries will follow suit. Indeed, Iraq made the switch in November 2000, in a show of defiance that some conspiracy theorists say sealed the fate of the Saddam regime. Iran, another member of the 'axis of evil', has been openly considering making the switch since 1999. Venezuela is already selling part of its oil under a barter system, thus avoiding using any currency. And last year, a senior Opec official made a speech speculating that it could make economic sense for the oil producers' cartel to price its oil in euros in the future. Of course, Opec has considered such switches before. 'Every time the dollar goes through a rough patch, you get this talk,' says Roger Diwan of consultancy group PFC Energy. 'It happens about once every three years.' However, until now, Saudi Arabia has always blocked any such move. But now even the Saudis are wavering.
Last year, a former US ambassador to Saudi Arabia told a committee of the US Congress: 'One of the major things the Saudis have historically done, in part out of friendship with the US, is to insist that oil continues to be priced in dollars. Therefore the US Treasury can print money and buy oil, which is an advantage no other country has. With the emergence of other currencies and with strains in the relationship, I wonder whether there will not be again, as there has been in the past, people in Saudi Arabia who raise the question of why they should be so kind to the United States.'
If the oil producers turn their backs on the US dollar, the ramifications for the global economy would be immense. At the very least, demand for euros would surge as oil importers would need to buy euros to buy oil. But this would be just the beginning. As things stand, oil exporters keep the billions of dollars they receive from the sale of their oil in their central bank reserves. Similarly, oil importers are obliged to keep large dollar reserves to pay for their oil. The fear is that if oil were priced in euros, both oil exporters and importers would switch a significant proportion of their reserves into euros, thus triggering a stampede out of the dollar into euros.
Many in the mid-1990s warned that if the euro ever did emerge as a rival reserve currency, it would lead to dangerous volatility in the currency markets. But what makes the current situation so serious is that the US currency is already under siege as never before. Since the end of the second world war, the US dollar has been the undisputed reserve currency of the world. It has been universally regarded as the safest and most reliable store of value available. Any country trying to maintain the value of its own currency has had no option but to hold billions of dollars in its central bank reserves. Two thirds of central bank reserves are dollar-denominated.
But global investors are beginning to lose faith in the greenback. Previous reserve currencies were usually backed by a scarce commodity, usually gold. Countries that ran up trade deficits were obliged to settle their debts in gold. This put a limit on how far into debt a country could sink. But that system came to an end in 1971, when the Nixon administration, faced with the spiralling costs of the Vietnam war, left the Gold Standard. Since the 1970s, Americans have been free to spend as much as the world will lend it. And since the rest of the world needs dollars for its reserves, US debts have spiralled to previously unimaginable levels.
The US current account deficit now stands at some $600 billion a year and America now needs to attract more than $1.5 billion every day from foreign investors to fund its debts. Not surprisingly, foreign investors are beginning to doubt the wisdom of lending America any more of their savings. Over the last year, foreign investors have turned away from America in droves. Instead, the US current account deficit is being financed largely by the intervention of Asian central banks determined to shore up the dollar to maintain the competitive advantage of their own manufacturing industries. In the second quarter of this year, Asian central banks financed more than half the current account deficit. Yet despite this unprecedented intervention, the dollar is still sinking.
'The position of the dollar today is similar to that of sterling in the 1920s and 1930s, when sterling ceased to be the automatic global reserve currency and started to face competition from other currencies, notably the dollar,' says Paul Donovan, an economist at the investment bank UBS. Before the first world war, Britain's balance of payments had been unassailable, but the cost of war and the subsequent disruption to trade cast doubt on its ability to meet its obligations. The Bank of England had to increase its holdings of gold to shore up sterling, and in 1931 was forced to devalue.
Even after 1931, Britons continued to live beyond their means, consuming far more than they produced. As a result, the current account deteriorated further, much as America's current account is deteriorating today. Worse, these deficits became harder to finance. British investors preferred to invest their money abroad, in countries where productivity growth and returns were higher, rather than in the UK, where prospects were dampened by protectionism and the trade unions. During the second world war, the deficits grew so large that it became impossible to defend sterling. The pound was devalued and the US dollar, backed by gold, became the new global reserve currency.
The Americans recognise that they now face a challenge to their economic hegemony, but are at a loss as to how to respond. The US is caught in a bind. On the one hand, the US treasury secretary, John Snow, wants Asian countries to stop intervening to prop up the dollar because he says it is costing American jobs. On the other hand, the government desperately needs the Asians to keep buying its Treasury securities in order to finance the cost of the war and George Bush's tax cuts.
Instead, the Bush administration is opting for ever more unorthodox measures to preserve US economic leadership. There has been a sharp rise in protectionism, in the form of giant subsidies for farmers, the steel industry and the collapsed World Trade Organisation talks in Cancun, Mexico. The protection of US jobs has now replaced access to global markets at the top of the political agenda. And America is increasingly forced to use its military strength to shore up its strategic interests around the world.
None of these measures is likely to boost confidence in the long-term value of the dollar. But can the world's central banks switch their reserves from dollars into euros without causing mayhem in the global economy? Last month's G7 Dubai communiqué was a clear attempt to engineer an orderly realignment of currencies. But the danger is that if Asian central banks do stop buying dollars, the result will be a devastating collapse in the US currency. At worst, this could lead to rising US inflation and interest rates, a deep recession, and a stock-market and property-market crash. The rest of the world would suffer a disastrous collapse in trade.
The plotters do not believe this will happen, says one well- placed City economist. Faced with the prospect of a collapse in the dollar, they believe the US will come to the negotiating table, just as they did with the Louvre Accord in 1986, the last time there was a collapse in the dollar. The result will be a new, pegged exchange rate system that will prevent the dollar-euro exchange rate from falling too far. Instead, the US will be forced to unwind its imbalances by raising interest rates and cutting spending. According to this European dream, America will have to scale back its overseas adventures and to share global leadership with the EU.
There is no doubt that those who are pushing for Russia and other oil-producing countries to price their oil in euros are playing for high stakes. In the post-Iraq world, it is by no means clear that an elegant, negotiated solution to a future currency crisis will be achievable. The ambitions of Europe and America are diverging across a range of issues. Europe believes America's vast trade deficit is its Achilles' heel, which it thinks it can use to hobble American power. But in choosing to fight America on the issue of currency, the very instrument of US economic hegemony, Europe risks driving a wedge between the two continents. Perhaps that is what the architects of the euro wanted all along.
From a common faith to a common agenda
SCMP-Monday, October 20, 2003
PHILIP BOWRING
It is perhaps indicative of the bias of so much western reporting, with international news agendas set by Christians and Jews in New York and London, that when the heads of 57 Muslim nations have a triennial meeting, they get minuscule coverage compared with that which attends such circuses as the annual Apec meetings.
Let us not pretend that these western media do not have their inbuilt cultural preferences and prejudices, based on their own histories and religious traditions. Despite the significant size of the Muslim minorities now found in Europe and North America, they have scant voice in the media, as any analysis of the ethnic and religious origins of correspondents and columnists would show.
That is not to say that the just-concluded summit of the Organisation of the Islamic Conference (OIC), held in Kuala Lumpur, was more than an outward show of Muslim solidarity that hides deep political divides. The idea of a pan-Islamic political grouping is almost a contradiction in terms. At one level, it makes no more sense than a Christian one embracing Armenia, Ireland and Peru. But to the extent that anti-Muslim prejudices of non-Muslims, especially in the west, are so widespread, the OIC may have some merit.
Anyway, it should be hard to ignore a meeting of so many political leaders of countries where Islam is either the faith of the majority or a large minority. Note too that this meeting was also attended by presidential guests from two countries with large (and currently rebellious) Muslim minorities, Russia and the Philippines. That was very much a Malaysian initiative - and a first. It raises the interesting possibility that the likes of British Prime Minister Tony Blair and France's leader Jacques Chirac may get invites next time. Even US President George W. Bush may be on the list, should he dare acknowledge that there are now probably more Muslims than Jews in the US.
Malaysia also did the OIC a service by reminding the Middle East Muslims, and in particular the Arabs who have traditionally dominated the OIC, of three things which many of them find unpalatable.
In the first place, they comprise only 20 per cent or so of the total ummah (Muslim community). They have tended to dominate, partly because of the role of Mecca and Arabic in Islam, partly because of the wealth of the Arab oil producers, and partly because the number of Arab states is large compared with their populations. In reality, most Muslims live east of Iran, in south and Southeast Asia, in countries with very different social traditions. In many cases, they are either a minority (in India), or there are large non-Muslim minorities (in Indonesia and Malaysia). Muslims in these regions feel the same hurt of prejudice and sympathy for the Palestinian victims of aggression. Yet they have scant interest in the mores and politics of the Middle East, and a degree of contempt for the way Arab regimes have put self-preservation before either helping the Palestinians or modernising their societies.
The Muslim obscurantists, who mostly reside west of the Indus, were reminded in Kuala Lumpur that the way to respect and influence, now as much as in the glory days of Islam, lies through learning and science, rather than dress codes and 7th century practices.
They were also reminded that Islam is, in theory, the most commerce-friendly of all the major religions. Its prophet was himself a trader and laid down rules for the proper conduct of business. (Christians and Confucians alike were long suspicious of the merchant class.) Thus, Muslims should be in favour of freer trade across political borders, bringing benefits to all. The reality, of course, is that the Muslim Middle East exhibits the highest levels of protectionism in the world. Countries cling not to the wisdom of the prophet, but to quasi-Marxist or statist notions, borrowed from Europe's fascist and socialist failures. These inhibit all trade, whether between Muslims or others.
For all his other faults, Malaysia's Prime Minister Mahathir Mohamad was in a good position to lecture his fellow Muslims on the merits of foreign investment, trade and technical education. Malaysia made a real effort to focus on these, adding a business forum and economic issues to the agenda.
Some ideas bandied around at the summit are pie in the sky - an Islamic common market or an Islamic currency, for example. If Muslim-majority nations are to increase trade and knowledge flows, it will have to be on a regional or international basis, not on a spurious notion that religious community can be the foundation for commerce. But the summit was a reminder that trade and intellectual exchanges are the key to the Muslim world improving its position and its negative perception of itself, and anger with others.
Philip Bowring is a Hong Kong-based journalist and commentator.
PHILIP BOWRING
It is perhaps indicative of the bias of so much western reporting, with international news agendas set by Christians and Jews in New York and London, that when the heads of 57 Muslim nations have a triennial meeting, they get minuscule coverage compared with that which attends such circuses as the annual Apec meetings.
Let us not pretend that these western media do not have their inbuilt cultural preferences and prejudices, based on their own histories and religious traditions. Despite the significant size of the Muslim minorities now found in Europe and North America, they have scant voice in the media, as any analysis of the ethnic and religious origins of correspondents and columnists would show.
That is not to say that the just-concluded summit of the Organisation of the Islamic Conference (OIC), held in Kuala Lumpur, was more than an outward show of Muslim solidarity that hides deep political divides. The idea of a pan-Islamic political grouping is almost a contradiction in terms. At one level, it makes no more sense than a Christian one embracing Armenia, Ireland and Peru. But to the extent that anti-Muslim prejudices of non-Muslims, especially in the west, are so widespread, the OIC may have some merit.
Anyway, it should be hard to ignore a meeting of so many political leaders of countries where Islam is either the faith of the majority or a large minority. Note too that this meeting was also attended by presidential guests from two countries with large (and currently rebellious) Muslim minorities, Russia and the Philippines. That was very much a Malaysian initiative - and a first. It raises the interesting possibility that the likes of British Prime Minister Tony Blair and France's leader Jacques Chirac may get invites next time. Even US President George W. Bush may be on the list, should he dare acknowledge that there are now probably more Muslims than Jews in the US.
Malaysia also did the OIC a service by reminding the Middle East Muslims, and in particular the Arabs who have traditionally dominated the OIC, of three things which many of them find unpalatable.
In the first place, they comprise only 20 per cent or so of the total ummah (Muslim community). They have tended to dominate, partly because of the role of Mecca and Arabic in Islam, partly because of the wealth of the Arab oil producers, and partly because the number of Arab states is large compared with their populations. In reality, most Muslims live east of Iran, in south and Southeast Asia, in countries with very different social traditions. In many cases, they are either a minority (in India), or there are large non-Muslim minorities (in Indonesia and Malaysia). Muslims in these regions feel the same hurt of prejudice and sympathy for the Palestinian victims of aggression. Yet they have scant interest in the mores and politics of the Middle East, and a degree of contempt for the way Arab regimes have put self-preservation before either helping the Palestinians or modernising their societies.
The Muslim obscurantists, who mostly reside west of the Indus, were reminded in Kuala Lumpur that the way to respect and influence, now as much as in the glory days of Islam, lies through learning and science, rather than dress codes and 7th century practices.
They were also reminded that Islam is, in theory, the most commerce-friendly of all the major religions. Its prophet was himself a trader and laid down rules for the proper conduct of business. (Christians and Confucians alike were long suspicious of the merchant class.) Thus, Muslims should be in favour of freer trade across political borders, bringing benefits to all. The reality, of course, is that the Muslim Middle East exhibits the highest levels of protectionism in the world. Countries cling not to the wisdom of the prophet, but to quasi-Marxist or statist notions, borrowed from Europe's fascist and socialist failures. These inhibit all trade, whether between Muslims or others.
For all his other faults, Malaysia's Prime Minister Mahathir Mohamad was in a good position to lecture his fellow Muslims on the merits of foreign investment, trade and technical education. Malaysia made a real effort to focus on these, adding a business forum and economic issues to the agenda.
Some ideas bandied around at the summit are pie in the sky - an Islamic common market or an Islamic currency, for example. If Muslim-majority nations are to increase trade and knowledge flows, it will have to be on a regional or international basis, not on a spurious notion that religious community can be the foundation for commerce. But the summit was a reminder that trade and intellectual exchanges are the key to the Muslim world improving its position and its negative perception of itself, and anger with others.
Philip Bowring is a Hong Kong-based journalist and commentator.
Japan offers $21m to weapons victims
SCMP - Monday, October 20, 2003
DAVID FANG
Japan has offered China 300 million yen (HK$21.2 million) for harm caused by chemical weapons that were abandoned by the Japanese army in China, officials in Beijing said yesterday.
But one said "no amount of money" could make up for the damage caused.
Zhang Qiyue, a spokeswoman for the Ministry of Foreign Affairs, said Beijing demanded that Japan face up to the "serious after-effects and political consequences" of a mustard gas incident in Heilongjiang province and take action to prevent similar tragedies.
One man died in Qiqihar and 42 people were injured when barrels of mustard gas abandoned by the Japanese military at the end of the second world war were dug up at a construction site on August 4.
Ms Zhang did not say whether China would accept the payment, which the Japanese government describes as "fees for operations to dispose of abandoned chemical weapons".
"This incident seriously harmed the Chinese people's bodily safety and national sentiments, and no amount of money can compensate for it," she said.
Japan has not officially announced a figure for compensation over the incident. A Japanese newspaper said the Tokyo government would refrain from any reference to "compensation" to avoid reopening the issue of war-related reparations, which it considers settled.
News of the latest offer was greeted with caution by activists campaigning on behalf of Qiqihar victims, who preferred instead to focus on the wider issue of weapons disposal.
"The Qiqihar victims certainly deserve compensation," said Zhou Wenbo, a prominent anti-Japanese activist. "But the Japanese side should also supply detailed information about the specific location of chemical weapons dumps in China."
Mr Zhou said it was not enough to compensate the victims of a "single incident" and called on the Japanese to put forward a broader "compensation proposal".
The Japanese offer drew an angry response from internet users.
One respondent, named Zhang, said on Sina.com that Japan was a "cowardly nation" which refused to "face up to its history".
Others said the compensation was not enough and called for a boycott of Japanese products.
China rejected earlier proposals to establish a 100 million yen "co-operation fund" for victims, particularly as the money was to be drawn from an existing fund set up to pay for weapons-disposal programmes in Jilin province.
Japan has admitted dumping 700,000 artillery shells, bombs and other weapons loaded with chemical agents in China at the end of the second world war. But it is believed the actual number could be as high as 2 million.
Japan has promised to dispose of the weapons, which the central government says have killed at least 2,000 people since 1945.
Experts from the two countries have been working together in recent months to search for and destroy the weapons.
DAVID FANG
Japan has offered China 300 million yen (HK$21.2 million) for harm caused by chemical weapons that were abandoned by the Japanese army in China, officials in Beijing said yesterday.
But one said "no amount of money" could make up for the damage caused.
Zhang Qiyue, a spokeswoman for the Ministry of Foreign Affairs, said Beijing demanded that Japan face up to the "serious after-effects and political consequences" of a mustard gas incident in Heilongjiang province and take action to prevent similar tragedies.
One man died in Qiqihar and 42 people were injured when barrels of mustard gas abandoned by the Japanese military at the end of the second world war were dug up at a construction site on August 4.
Ms Zhang did not say whether China would accept the payment, which the Japanese government describes as "fees for operations to dispose of abandoned chemical weapons".
"This incident seriously harmed the Chinese people's bodily safety and national sentiments, and no amount of money can compensate for it," she said.
Japan has not officially announced a figure for compensation over the incident. A Japanese newspaper said the Tokyo government would refrain from any reference to "compensation" to avoid reopening the issue of war-related reparations, which it considers settled.
News of the latest offer was greeted with caution by activists campaigning on behalf of Qiqihar victims, who preferred instead to focus on the wider issue of weapons disposal.
"The Qiqihar victims certainly deserve compensation," said Zhou Wenbo, a prominent anti-Japanese activist. "But the Japanese side should also supply detailed information about the specific location of chemical weapons dumps in China."
Mr Zhou said it was not enough to compensate the victims of a "single incident" and called on the Japanese to put forward a broader "compensation proposal".
The Japanese offer drew an angry response from internet users.
One respondent, named Zhang, said on Sina.com that Japan was a "cowardly nation" which refused to "face up to its history".
Others said the compensation was not enough and called for a boycott of Japanese products.
China rejected earlier proposals to establish a 100 million yen "co-operation fund" for victims, particularly as the money was to be drawn from an existing fund set up to pay for weapons-disposal programmes in Jilin province.
Japan has admitted dumping 700,000 artillery shells, bombs and other weapons loaded with chemical agents in China at the end of the second world war. But it is believed the actual number could be as high as 2 million.
Japan has promised to dispose of the weapons, which the central government says have killed at least 2,000 people since 1945.
Experts from the two countries have been working together in recent months to search for and destroy the weapons.
Members sign democracy pact
SCMP-Wednesday, October 8, 2003
AGENCE FRANCE-PRESSE
All member nations of Asean - including communist Vietnam and Laos and army-ruled Myanmar - have signed a pact pledging support for democracy.
They promised "to live at peace with each other and with the world at large, in a just, democratic and harmonious environment".
Sources said several countries, in talks before yesterday's summit in Bali, had wanted the word "democratic" removed. The Philippines pressed successfully for it to stay in.
Only six of the 10 members of the Association of Southeast Asian Nations are democracies.
Asean spokesman M. C. Abad said: "The introduction of the notion of democratic peace sets the standard of political norm in the region. It means that member states subscribe to the notion that democratic processes promote regional security.
"It [democracy] is something that member states will aim for."
Indonesian President Megawati Sukarnoputri said after the signing that the Bali Concord II was a "watershed in the history of Asean".
"The document will establish an Asean community that will make it possible for our children and their children to live in a state of enduring peace, stability and shared prosperity," she said.
It establishes an Asean community of "three pillars" - the Security Community, Economic Community and Socio-cultural Community - "for the purpose of ensuring durable peace, stability and shared prosperity in the region".
On the sidelines of the meeting, Japanese Prime Minister Junichiro Koizumi met Myanmar premier Khin Nyunt to discuss democracy leader Aung San Suu Kyi, who is under house arrest in Yangon.
"The international community is concerned with the situation . . . surrounding Suu Kyi and I am personally concerned and worried about the current situation in Myanmar," Mr Koizumi told him, according to Japanese government spokesman Jiro Okuyama
AGENCE FRANCE-PRESSE
All member nations of Asean - including communist Vietnam and Laos and army-ruled Myanmar - have signed a pact pledging support for democracy.
They promised "to live at peace with each other and with the world at large, in a just, democratic and harmonious environment".
Sources said several countries, in talks before yesterday's summit in Bali, had wanted the word "democratic" removed. The Philippines pressed successfully for it to stay in.
Only six of the 10 members of the Association of Southeast Asian Nations are democracies.
Asean spokesman M. C. Abad said: "The introduction of the notion of democratic peace sets the standard of political norm in the region. It means that member states subscribe to the notion that democratic processes promote regional security.
"It [democracy] is something that member states will aim for."
Indonesian President Megawati Sukarnoputri said after the signing that the Bali Concord II was a "watershed in the history of Asean".
"The document will establish an Asean community that will make it possible for our children and their children to live in a state of enduring peace, stability and shared prosperity," she said.
It establishes an Asean community of "three pillars" - the Security Community, Economic Community and Socio-cultural Community - "for the purpose of ensuring durable peace, stability and shared prosperity in the region".
On the sidelines of the meeting, Japanese Prime Minister Junichiro Koizumi met Myanmar premier Khin Nyunt to discuss democracy leader Aung San Suu Kyi, who is under house arrest in Yangon.
"The international community is concerned with the situation . . . surrounding Suu Kyi and I am personally concerned and worried about the current situation in Myanmar," Mr Koizumi told him, according to Japanese government spokesman Jiro Okuyama
Asean seals pacts with Japan, India
SCMP-Thursday, October 9, 2003
ASSOCIATED PRESS in Nusa Dua, Indonesia
The Association of Southeast Asian Nations (Asean) signed a series of accords with Japan and India yesterday as the regional grouping sought to use its collective power to expand its influence across Asia.
Japan signed a pledge with 10 Southeast Asian leaders to reduce tariffs and other barriers standing in the way of mutual trade.
Asean also signed its first accords with India, agreeing to expand trade relations, shun aggression and combat regional terror, as the regional group finished its annual summit.
The agreement with Japan was also aimed at preparing the way for a Japan-Asean free-trade agreement. Both sides hope to begin negotiating such an agreement within the next decade.
Japan traditionally has been Asean's largest trading partner and investor, with two-way trade amounting to US$99.2 billion in 2001, or 14.4 per cent of Asean's total trade. But Japan has seen its Asean trade drop from a peak of US$121.2 billion in 1995, while China's and India's trade with Southeast Asia has risen.
During yesterday's signing ceremony, Japanese Prime Minister Junichiro Koizumi shook hands with the Asean chairwoman, Indonesian President Megawati Sukarnoputri, to the applause and broad smiles of regional leaders.
"This is a wide-ranging deal between Japan and Asean. We hope it can provide a new momentum for all our economies," Indonesia's Foreign Minister, Hasan Wirayuda, said after the signing.
Asean and Japan will "progressively eliminate duties and other restrictive regulations of commerce on substantially all trade in goods in order to establish" a free trade agreement, their accord says.
The two sides will start negotiating the details of how to liberalise their bilateral trade in goods at the start of next year and will widen talks to include liberalising services in 2005. The substance of the agreement should be implemented by 2012, although some of Asean's newer members may be given a further five years to comply.
Japan also pledged to help some of Asean's poorer countries develop their intellectual property rights and both sides agreed to harmonise their customs and visa procedures for business people.
Mr Koizumi said: "Japan is always prepared to provide co-operation and support for the further development of Asean countries. This basic stance of ours is unshakable."
The most significant of Asean's three agreements with India is the Framework for Comprehensive Economic Co-operation, intended to liberalise trade flows and prepare for an eventual free-trade zone.
Asean secretary-general Ong Keng Yong said: "We believe that India has potential and we want to use this framework agreement to increase trade, although we have a long way to go."
Indian Prime Minister Atal Behari Vajpayee told a group of business leaders in Bali the India-Asean partnership showed "exciting potential" and he hoped annual trade between the two sides could grow from US$10 billion last year to $30 billion by 2007.
In the past decade, India's annual trade with the regional grouping has tripled.
"India's trade and economic interaction with the Asean countries has been steadily growing but not fast enough," Mr Vajpayee said.
He said as part of the enhanced economic ties, his country would offer unilateral trade concessions on items of interest to Asean's poorer members.
Critics say India complains about subsidies by the rich but then imposes its own tariffs against imports from poorer nations.
India was instrumental in helping stall World Trade Organisation talks in Cancun last month when it refused to cut tariffs on agricultural imports, as demanded by wealthy countries. India said developed countries must agree to eliminate farm subsidies.
Agriculture is a key issue in India, where it supplies a living for nearly 650 million of the population of more than one billion. India also joined Asean's 1976 Treaty of Amity and Co-operation, the group's founding non-aggression pact to promote regional stability.
ASSOCIATED PRESS in Nusa Dua, Indonesia
The Association of Southeast Asian Nations (Asean) signed a series of accords with Japan and India yesterday as the regional grouping sought to use its collective power to expand its influence across Asia.
Japan signed a pledge with 10 Southeast Asian leaders to reduce tariffs and other barriers standing in the way of mutual trade.
Asean also signed its first accords with India, agreeing to expand trade relations, shun aggression and combat regional terror, as the regional group finished its annual summit.
The agreement with Japan was also aimed at preparing the way for a Japan-Asean free-trade agreement. Both sides hope to begin negotiating such an agreement within the next decade.
Japan traditionally has been Asean's largest trading partner and investor, with two-way trade amounting to US$99.2 billion in 2001, or 14.4 per cent of Asean's total trade. But Japan has seen its Asean trade drop from a peak of US$121.2 billion in 1995, while China's and India's trade with Southeast Asia has risen.
During yesterday's signing ceremony, Japanese Prime Minister Junichiro Koizumi shook hands with the Asean chairwoman, Indonesian President Megawati Sukarnoputri, to the applause and broad smiles of regional leaders.
"This is a wide-ranging deal between Japan and Asean. We hope it can provide a new momentum for all our economies," Indonesia's Foreign Minister, Hasan Wirayuda, said after the signing.
Asean and Japan will "progressively eliminate duties and other restrictive regulations of commerce on substantially all trade in goods in order to establish" a free trade agreement, their accord says.
The two sides will start negotiating the details of how to liberalise their bilateral trade in goods at the start of next year and will widen talks to include liberalising services in 2005. The substance of the agreement should be implemented by 2012, although some of Asean's newer members may be given a further five years to comply.
Japan also pledged to help some of Asean's poorer countries develop their intellectual property rights and both sides agreed to harmonise their customs and visa procedures for business people.
Mr Koizumi said: "Japan is always prepared to provide co-operation and support for the further development of Asean countries. This basic stance of ours is unshakable."
The most significant of Asean's three agreements with India is the Framework for Comprehensive Economic Co-operation, intended to liberalise trade flows and prepare for an eventual free-trade zone.
Asean secretary-general Ong Keng Yong said: "We believe that India has potential and we want to use this framework agreement to increase trade, although we have a long way to go."
Indian Prime Minister Atal Behari Vajpayee told a group of business leaders in Bali the India-Asean partnership showed "exciting potential" and he hoped annual trade between the two sides could grow from US$10 billion last year to $30 billion by 2007.
In the past decade, India's annual trade with the regional grouping has tripled.
"India's trade and economic interaction with the Asean countries has been steadily growing but not fast enough," Mr Vajpayee said.
He said as part of the enhanced economic ties, his country would offer unilateral trade concessions on items of interest to Asean's poorer members.
Critics say India complains about subsidies by the rich but then imposes its own tariffs against imports from poorer nations.
India was instrumental in helping stall World Trade Organisation talks in Cancun last month when it refused to cut tariffs on agricultural imports, as demanded by wealthy countries. India said developed countries must agree to eliminate farm subsidies.
Agriculture is a key issue in India, where it supplies a living for nearly 650 million of the population of more than one billion. India also joined Asean's 1976 Treaty of Amity and Co-operation, the group's founding non-aggression pact to promote regional stability.
A single Southeast Asian market by 2020 ... maybe
SCMP-Thursday, October 9, 2003
ANALYSIS by MARIANNE KEARNEY in Jakarta
Analysts are not convinced by the landmark accord to create a single Southeast Asian market by 2020.
At their Bali summit, Asean leaders may have painted a rosy economic picture for the future, but economic experts doubt that such a bold initiative can be achieved on schedule, or that it will combat the growing economic powerhouses of China and India.
Analysts say that on paper, the plan to create a European-style single market by 2020 appears to be an excellent idea for such an enormous region with a population of 500 million and regional trade worth US$720 billion a year.
The proposal, called the Asean Economic Community and signed by the bloc's 10 leaders, has been hailed as a way of combating increasing competition from regional economic giants, in particular China and India.
But economic analysts argue that the plan will not stop the massive flow of foreign investment from Southeast Asia to China.
"If you want to compete with the economies of China and India, the only way is to improve efficiency and increase productivity," said Pande Raja Silalahi an economist from the Centre for International and Strategic Studies in Jakarta. "Harmonising trade between Southeast Asian countries will not combat China."
He said while Asean's ambitious plan has been compared to the European Union, with most of Southeast Asia's economies being far simpler and less diverse than Europe's there is far less to be gained from such an accord.
"Asean members haven't really looked at their own economies before the agreement. Apart from Singapore they don't really produce much capital goods, such as electronics, machinery," he said.
"I suspect this is just a bit of rhetoric. Asean has chosen the same timetable as the World Trade Organisation [WTO] date for free trade, just to compete," he added.
Unlike the European Union where internal trade was enormous, regional trade in Asia could reach only as much as 50 per cent because many Southeast Asian countries were producing the same goods or exporting the same agricultural products, he said.
Trade between Asean stands at only 21 per cent of the region's total trade, but Indonesian officials have conceded it might reach only 40 per cent of the regional annual trade worth US$720 billion, if free trade deals are properly implemented.
And while economic ministers have been trying to speed up the single market for 11 key industries such as agriculture, tourism and wood products by 2010, many analysts are doubtful Asean could meet such a timetable.
Economic analyst Fauzi Ichsan, of Standard Chartered Bank, said: "Asean meetings are marked by a lot of rhetoric. It's possible they could do it if the AFTA [Asean Free Trade Area] was up and running by 2004, but I'm not sure they can."
AFTA, due to be implemented by next year, requires the Southeast Asian trading partners to reduce tariffs on a range of goods by between 0 per cent to 5 per cent. Asean started reducing tariffs on some goods at the start of this year.
Purbaya Yudhi Sadewa, senior economist with the Danareksa Research Institute, said: "Can they do it to the same level as the EU by 2020 - I don't think so."
ANALYSIS by MARIANNE KEARNEY in Jakarta
Analysts are not convinced by the landmark accord to create a single Southeast Asian market by 2020.
At their Bali summit, Asean leaders may have painted a rosy economic picture for the future, but economic experts doubt that such a bold initiative can be achieved on schedule, or that it will combat the growing economic powerhouses of China and India.
Analysts say that on paper, the plan to create a European-style single market by 2020 appears to be an excellent idea for such an enormous region with a population of 500 million and regional trade worth US$720 billion a year.
The proposal, called the Asean Economic Community and signed by the bloc's 10 leaders, has been hailed as a way of combating increasing competition from regional economic giants, in particular China and India.
But economic analysts argue that the plan will not stop the massive flow of foreign investment from Southeast Asia to China.
"If you want to compete with the economies of China and India, the only way is to improve efficiency and increase productivity," said Pande Raja Silalahi an economist from the Centre for International and Strategic Studies in Jakarta. "Harmonising trade between Southeast Asian countries will not combat China."
He said while Asean's ambitious plan has been compared to the European Union, with most of Southeast Asia's economies being far simpler and less diverse than Europe's there is far less to be gained from such an accord.
"Asean members haven't really looked at their own economies before the agreement. Apart from Singapore they don't really produce much capital goods, such as electronics, machinery," he said.
"I suspect this is just a bit of rhetoric. Asean has chosen the same timetable as the World Trade Organisation [WTO] date for free trade, just to compete," he added.
Unlike the European Union where internal trade was enormous, regional trade in Asia could reach only as much as 50 per cent because many Southeast Asian countries were producing the same goods or exporting the same agricultural products, he said.
Trade between Asean stands at only 21 per cent of the region's total trade, but Indonesian officials have conceded it might reach only 40 per cent of the regional annual trade worth US$720 billion, if free trade deals are properly implemented.
And while economic ministers have been trying to speed up the single market for 11 key industries such as agriculture, tourism and wood products by 2010, many analysts are doubtful Asean could meet such a timetable.
Economic analyst Fauzi Ichsan, of Standard Chartered Bank, said: "Asean meetings are marked by a lot of rhetoric. It's possible they could do it if the AFTA [Asean Free Trade Area] was up and running by 2004, but I'm not sure they can."
AFTA, due to be implemented by next year, requires the Southeast Asian trading partners to reduce tariffs on a range of goods by between 0 per cent to 5 per cent. Asean started reducing tariffs on some goods at the start of this year.
Purbaya Yudhi Sadewa, senior economist with the Danareksa Research Institute, said: "Can they do it to the same level as the EU by 2020 - I don't think so."
And now, currency wars
AsiaTimes - 7 Oct. 2003
By Marc Erikson
Complementing its strategic-military doctrine of preemptive action against putative constructors and proliferators of weapons of mass destruction, the administration of US President George W Bush has turned to preemption in the financial sphere to challenge unpalatable currency regimes and counteract their alleged ill effects on the US economy. China, Japan, and other Asian nations are the targeted offenders ... and, for a change of pace, victory in the war unleashed at the Group of Seven (G7) Dubai meetings is to be achieved not through overwhelming US strength, but through deliberately induced US (dollar) weakness.
The ultimate goal is the same: defense of the US homeland - first against terrorists and their would-be suppliers, now also against foreign traders and thieves of US jobs armed with the weapons of "unfairly undervalued" currencies. But the Washington cast of characters pitted against Asian central bankers and finance ministers is a strange one. You'd expect John Snow, the treasury secretary, and he has, indeed, taken the point. With his early-September Tokyo-Beijing-Phuket (Asia-Pacific Economic Cooperation finance ministers' meeting) junket, he set the stage for the Dubai declaration on "flexible exchange rates". But Texas oilman Don Evans, the commerce secretary, Sam Bodman, his deputy, formally in charge of the National Oceanic and Atmospheric Administration and the National Institute of Standards and Technology?
To figure that one out, you have to go back to September 1, Labor Day in the United States. On that occasion, Bush, accompanied by his chief political strategist Karl Rove, stood in the driving rain at an operating engineers training center in Richfield, Ohio, and told assembled trade unionists, "We've lost thousands of jobs in manufacturing, some of it because of productivity gains - but some of it because production moved overseas ... One way to make sure that the manufacturing sector does well is to send a message overseas, [to] say, look, we expect there to be a level playing field when it comes to trade."
Bush was there and said what he said because Rove, who must get Bush re-elected, had told him so. Some 2.5 million US manufacturing jobs have been lost since early 2001 ... to China, say the trade unions, the National Association of Manufacturers (NAM) and the US Chambers of Commerce, and they - and, of course, the Democrats running for president - are blaming Bush. It's nonsense. The United States has been losing manufacturing jobs for decades. Ten percent of the workforce is now employed in manufacturing; in another 10 years, according to Organization of Economic Cooperation and Development (OECD) estimates, it will be 2-3 percent. It's a structural shift in the US economy that will not be reversed. But it does loom as a major election issue and someone has to be blamed. So, the NAM, Rove and the Department of Commerce decided that it might as well be China, which now runs an annual trade surplus of more than $100 billion with the US.
The next step in that logic is to blame the "undervalued Chinese yuan", which is pegged to the US dollar. Never mind that China has major competitive advantages, from cheap labor to new production technologies, in large part installed there by US companies producing for export to the US. Not a single US job would return to Ohio or Tennessee were the yuan revalued or floated as the NAM, the Commerce Department and a bunch of senators demand and as John Snow demanded when - also on Labor Day - he spoke in Tokyo and later in Beijing and Phuket. Jobs lost by China as the result of a higher yuan would go to Vietnam or Indonesia.
Karl Rove is a nasty piece of work, a college dropout from Utah who learned his metier from the likes of Donald Segretti, a onetime Richard Nixon dirty-tricks specialist. But he is one of George W's closest buddies and has been with the Bush family ever since he advised the older Bush in his election campaigns, then young George in his campaigns for governor of Texas and, of course, in the 2000 presidential race. About international finance, Rove knows little; but China will have looked like an easy target and, by attacking the yuan peg, at least the Bush administration would look as if it was doing something in the international arena to protect and regain US jobs.
Evans and Bodman don't have much better credentials when it comes to global finance, but their department is in charge of trade, and so they got into the act. Bodman, when asked on September 24 whether the preceding weekend's G7 statement was directed at both China and Japan, replied, "The answer is yes." By that time, the dollar had already dropped by 5 yen against the Japanese currency, the Nikkei 225 stock average was down 6 percent on worries that a higher yen would hit exporters, and the European and US equity markets were down as well on concern that a weak-dollar policy had been adopted by the US and could abort global economic recovery. And John Snow, the railroad man? He got a bit scared that he had unleashed something he couldn't control and - unconvincingly - reiterated the US strong-dollar policy. But the damage had been done. Only China didn't budge. The People's Daily in a front-page editorial had written on September 2 when Snow arrived in Beijing that China's currency policy would not be determined by US electoral policy, and it has stuck with that line.
Japan belatedly has also reaffirmed that it will prevent further rapid yen appreciation through currency-market interventions as necessary, and several such interventions were carried out last week. On that, global financial markets have calmed and equity markets have rallied. But the dangers inherent in the Rove initiative aren't over, and Don Evans goes to Beijing this month to keep on pushing for a "level playing field". China will likely be told that it has the choice between punitive tariffs imposed on its exports to the US or currency regime change. Continuing outright Chinese resistance won't be easy. The yen is already much higher and, along with it, most other Asian currencies have risen against the dollar, as the yen is a significant component in the basket of currencies that determines their valuation. They all now have to worry about losing export competitiveness to China and become de facto US allies in this game.
How will this play out? Iraq's alleged weapons of mass destruction led to all-out war. Asia's alleged currency weapons of US job destruction, with any luck, will not. While in a currency war the Bush administration would enjoy the support of the Democrats, it has already run into a wall of opposition on Wall Street. Former Bill Clinton treasury secretary Robert Rubin, now speaking in the capacity of top Wall Street banker, has castigated it. The Wall Street Journal has written among its nastiest-ever editorials in opposition.
It doesn't mean the war has definitively been prevented. But were it to go off, I have a straightforward prediction: The very thing that was supposed to save Bush's electoral prospects would badly backfire, would endanger global and US economic expansion and would - more surely than any Iraq war fallout - sink Bush.
By Marc Erikson
Complementing its strategic-military doctrine of preemptive action against putative constructors and proliferators of weapons of mass destruction, the administration of US President George W Bush has turned to preemption in the financial sphere to challenge unpalatable currency regimes and counteract their alleged ill effects on the US economy. China, Japan, and other Asian nations are the targeted offenders ... and, for a change of pace, victory in the war unleashed at the Group of Seven (G7) Dubai meetings is to be achieved not through overwhelming US strength, but through deliberately induced US (dollar) weakness.
The ultimate goal is the same: defense of the US homeland - first against terrorists and their would-be suppliers, now also against foreign traders and thieves of US jobs armed with the weapons of "unfairly undervalued" currencies. But the Washington cast of characters pitted against Asian central bankers and finance ministers is a strange one. You'd expect John Snow, the treasury secretary, and he has, indeed, taken the point. With his early-September Tokyo-Beijing-Phuket (Asia-Pacific Economic Cooperation finance ministers' meeting) junket, he set the stage for the Dubai declaration on "flexible exchange rates". But Texas oilman Don Evans, the commerce secretary, Sam Bodman, his deputy, formally in charge of the National Oceanic and Atmospheric Administration and the National Institute of Standards and Technology?
To figure that one out, you have to go back to September 1, Labor Day in the United States. On that occasion, Bush, accompanied by his chief political strategist Karl Rove, stood in the driving rain at an operating engineers training center in Richfield, Ohio, and told assembled trade unionists, "We've lost thousands of jobs in manufacturing, some of it because of productivity gains - but some of it because production moved overseas ... One way to make sure that the manufacturing sector does well is to send a message overseas, [to] say, look, we expect there to be a level playing field when it comes to trade."
Bush was there and said what he said because Rove, who must get Bush re-elected, had told him so. Some 2.5 million US manufacturing jobs have been lost since early 2001 ... to China, say the trade unions, the National Association of Manufacturers (NAM) and the US Chambers of Commerce, and they - and, of course, the Democrats running for president - are blaming Bush. It's nonsense. The United States has been losing manufacturing jobs for decades. Ten percent of the workforce is now employed in manufacturing; in another 10 years, according to Organization of Economic Cooperation and Development (OECD) estimates, it will be 2-3 percent. It's a structural shift in the US economy that will not be reversed. But it does loom as a major election issue and someone has to be blamed. So, the NAM, Rove and the Department of Commerce decided that it might as well be China, which now runs an annual trade surplus of more than $100 billion with the US.
The next step in that logic is to blame the "undervalued Chinese yuan", which is pegged to the US dollar. Never mind that China has major competitive advantages, from cheap labor to new production technologies, in large part installed there by US companies producing for export to the US. Not a single US job would return to Ohio or Tennessee were the yuan revalued or floated as the NAM, the Commerce Department and a bunch of senators demand and as John Snow demanded when - also on Labor Day - he spoke in Tokyo and later in Beijing and Phuket. Jobs lost by China as the result of a higher yuan would go to Vietnam or Indonesia.
Karl Rove is a nasty piece of work, a college dropout from Utah who learned his metier from the likes of Donald Segretti, a onetime Richard Nixon dirty-tricks specialist. But he is one of George W's closest buddies and has been with the Bush family ever since he advised the older Bush in his election campaigns, then young George in his campaigns for governor of Texas and, of course, in the 2000 presidential race. About international finance, Rove knows little; but China will have looked like an easy target and, by attacking the yuan peg, at least the Bush administration would look as if it was doing something in the international arena to protect and regain US jobs.
Evans and Bodman don't have much better credentials when it comes to global finance, but their department is in charge of trade, and so they got into the act. Bodman, when asked on September 24 whether the preceding weekend's G7 statement was directed at both China and Japan, replied, "The answer is yes." By that time, the dollar had already dropped by 5 yen against the Japanese currency, the Nikkei 225 stock average was down 6 percent on worries that a higher yen would hit exporters, and the European and US equity markets were down as well on concern that a weak-dollar policy had been adopted by the US and could abort global economic recovery. And John Snow, the railroad man? He got a bit scared that he had unleashed something he couldn't control and - unconvincingly - reiterated the US strong-dollar policy. But the damage had been done. Only China didn't budge. The People's Daily in a front-page editorial had written on September 2 when Snow arrived in Beijing that China's currency policy would not be determined by US electoral policy, and it has stuck with that line.
Japan belatedly has also reaffirmed that it will prevent further rapid yen appreciation through currency-market interventions as necessary, and several such interventions were carried out last week. On that, global financial markets have calmed and equity markets have rallied. But the dangers inherent in the Rove initiative aren't over, and Don Evans goes to Beijing this month to keep on pushing for a "level playing field". China will likely be told that it has the choice between punitive tariffs imposed on its exports to the US or currency regime change. Continuing outright Chinese resistance won't be easy. The yen is already much higher and, along with it, most other Asian currencies have risen against the dollar, as the yen is a significant component in the basket of currencies that determines their valuation. They all now have to worry about losing export competitiveness to China and become de facto US allies in this game.
How will this play out? Iraq's alleged weapons of mass destruction led to all-out war. Asia's alleged currency weapons of US job destruction, with any luck, will not. While in a currency war the Bush administration would enjoy the support of the Democrats, it has already run into a wall of opposition on Wall Street. Former Bill Clinton treasury secretary Robert Rubin, now speaking in the capacity of top Wall Street banker, has castigated it. The Wall Street Journal has written among its nastiest-ever editorials in opposition.
It doesn't mean the war has definitively been prevented. But were it to go off, I have a straightforward prediction: The very thing that was supposed to save Bush's electoral prospects would badly backfire, would endanger global and US economic expansion and would - more surely than any Iraq war fallout - sink Bush.
Hu's worthy goals still far from realisation
SCMP Editorial-Thursday, October 2, 2003
The strong emphasis placed by Hu Jintao on democracy in his speech to Politburo members in the run-up to National Day will inevitably renew hopes of political reform on the mainland. But while the Communist Party chief's message underlined his frequently stated commitment to govern for the benefit of the people, it revealed little about the form, extent, or pace of change.
Mr Hu, who is also president of China, used the word democratic or democracy eight times in the space of two sentences at one point during his address. He applied it to procedure, public participation in politics, elections, decision-making, management and supervision. The president also stressed the importance of reforms to the judicial system, administrating fairly and governing in accordance with the law. The sentiments amount to a welcome endorsement of principles required for good governance. But how these worthy aims are to be achieved remains to be seen.
Democracy, of course, can take many different forms and Mr Hu's comments should not be seen as an indication that some form of western-style multi-party system is on the way. Change will be introduced incrementally, and at a pace the Communist Party is comfortable with. But his remarks point to a growing realisation that the political system must adapt to meet the changing needs of society brought about by the move away from a planned economy and rapid economic growth. A stark reminder of some of the problems that are emerging was seen in Tiananmen Square yesterday when a laid-off worker set himself on fire to draw attention to his grievances; he was the second person to resort to such a desperate step in the past two weeks.
The party has recognised that changes are needed if stability is to be maintained. Stamping out corruption and making the party more representative have long been on the agenda, while the new leadership has placed greater emphasis on governing in the interests of the people. Political reform is a necessary part of this process, but so far it has been limited in scope. Direct elections were introduced for rural leaders five years ago and have now been adopted in villages nationwide. But the full extent of the reforms is far from being implemented because of resistance by local officials. Extending direct elections to townships - or even provinces and cities - is likely to be considered too radical, at least in the short-term. Local congresses have been given more of a supervisory role, and Shenzhen plans to experiment with reforms that include separating policy-making from implementation.
While such measures are to be encouraged, in their current form they amount to little more than tinkering with the existing system. One area that should be looked at is improving the party's own procedures, such as by allowing members to participate in real elections for key posts instead of expecting them to endorse candidates nominated by the leadership. This could help combat corruption and enhance legitimacy.
By placing such importance on democracy in his speech on Monday, Mr Hu has raised expectations. To what extent they are realised will depend on how his words are now converted into action.
The strong emphasis placed by Hu Jintao on democracy in his speech to Politburo members in the run-up to National Day will inevitably renew hopes of political reform on the mainland. But while the Communist Party chief's message underlined his frequently stated commitment to govern for the benefit of the people, it revealed little about the form, extent, or pace of change.
Mr Hu, who is also president of China, used the word democratic or democracy eight times in the space of two sentences at one point during his address. He applied it to procedure, public participation in politics, elections, decision-making, management and supervision. The president also stressed the importance of reforms to the judicial system, administrating fairly and governing in accordance with the law. The sentiments amount to a welcome endorsement of principles required for good governance. But how these worthy aims are to be achieved remains to be seen.
Democracy, of course, can take many different forms and Mr Hu's comments should not be seen as an indication that some form of western-style multi-party system is on the way. Change will be introduced incrementally, and at a pace the Communist Party is comfortable with. But his remarks point to a growing realisation that the political system must adapt to meet the changing needs of society brought about by the move away from a planned economy and rapid economic growth. A stark reminder of some of the problems that are emerging was seen in Tiananmen Square yesterday when a laid-off worker set himself on fire to draw attention to his grievances; he was the second person to resort to such a desperate step in the past two weeks.
The party has recognised that changes are needed if stability is to be maintained. Stamping out corruption and making the party more representative have long been on the agenda, while the new leadership has placed greater emphasis on governing in the interests of the people. Political reform is a necessary part of this process, but so far it has been limited in scope. Direct elections were introduced for rural leaders five years ago and have now been adopted in villages nationwide. But the full extent of the reforms is far from being implemented because of resistance by local officials. Extending direct elections to townships - or even provinces and cities - is likely to be considered too radical, at least in the short-term. Local congresses have been given more of a supervisory role, and Shenzhen plans to experiment with reforms that include separating policy-making from implementation.
While such measures are to be encouraged, in their current form they amount to little more than tinkering with the existing system. One area that should be looked at is improving the party's own procedures, such as by allowing members to participate in real elections for key posts instead of expecting them to endorse candidates nominated by the leadership. This could help combat corruption and enhance legitimacy.
By placing such importance on democracy in his speech on Monday, Mr Hu has raised expectations. To what extent they are realised will depend on how his words are now converted into action.
Hu puts reform back on the agenda
SCMP-Thursday, October 2, 2003
NAILENE CHOU WIEST and REUTERS and ASSOCIATED PRESS in BEIJING
President Hu Jintao has called for further reform of the mainland's political system and the expansion of "socialist democracy" and citizens' participation in politics.
He also called for reforms to the legal system when he spoke at a lecture to the senior leadership of the Communist Party. The tone of Mr Hu's speech, on the eve of National Day, was seen as an indication that political reform is back on the agenda after a period when Sars and the economy dominated discussion.
Underlining the need to bring ordinary people closer to the political process, an unemployed man set himself on fire in Tiananmen Square yesterday, the second person to do so in recent weeks.
It was unclear what motivated Yang Peiquan, 49, to set himself ablaze, but the act highlighted the despondency many people feel as socioeconomic disparities grow.
Xinhua said Mr Hu used his speech to the Politburo to urge "efforts to expand citizens' orderly participation in political affairs and guarantee the people's rights to carry out democratic elections, decision making, management and supervision according to law". During the lecture, Mr Hu called for "active and steady promotion of political system reform" and stressed the importance of "socialist political ethics".
The Communist Party's Central Committee, which charts China's political and economic course, is to hold its annual plenary session in Beijing on October 11-14. The plenum will, among other things, consider changes to the constitution.
Analysts expect the constitution will be revised to shield private property rights and possibly to include the "Three Represents" political theory of former leader Jiang Zemin, which, among other things, recognises the role of private businesspeople in society. They say the party has been considering ways to make the process of picking its officials more democratic.
Those pushing for further reform will likely find a positive note in Mr Hu's words. Hopes had been high that Mr Hu would use July 1 to push for internal democracy. But he sidestepped the issue, focusing instead on Mr Jiang's theory. In following months, discussions on constitutional reforms were discouraged, cooling expectations for expanding democracy.
Since coming to power, Mr Hu has paid visits to the eight state-sanctioned democratic parties and groups, and consulted their leaders. But his speech, as reported by Xinhua, contained no reference to greater roles for these parties or suggestions that a multi-party system would be allowed.
Mr Hu said the rule of law should prevail in China, a situation that would require a strengthened legal system.
The notion of a "limited" government was aired again as Mr Hu urged further simplification of the administrative approval procedures so that the government would become lean and efficient.
He repeated his views that all official policies must meet the economic and social development needs of the people.
NAILENE CHOU WIEST and REUTERS and ASSOCIATED PRESS in BEIJING
President Hu Jintao has called for further reform of the mainland's political system and the expansion of "socialist democracy" and citizens' participation in politics.
He also called for reforms to the legal system when he spoke at a lecture to the senior leadership of the Communist Party. The tone of Mr Hu's speech, on the eve of National Day, was seen as an indication that political reform is back on the agenda after a period when Sars and the economy dominated discussion.
Underlining the need to bring ordinary people closer to the political process, an unemployed man set himself on fire in Tiananmen Square yesterday, the second person to do so in recent weeks.
It was unclear what motivated Yang Peiquan, 49, to set himself ablaze, but the act highlighted the despondency many people feel as socioeconomic disparities grow.
Xinhua said Mr Hu used his speech to the Politburo to urge "efforts to expand citizens' orderly participation in political affairs and guarantee the people's rights to carry out democratic elections, decision making, management and supervision according to law". During the lecture, Mr Hu called for "active and steady promotion of political system reform" and stressed the importance of "socialist political ethics".
The Communist Party's Central Committee, which charts China's political and economic course, is to hold its annual plenary session in Beijing on October 11-14. The plenum will, among other things, consider changes to the constitution.
Analysts expect the constitution will be revised to shield private property rights and possibly to include the "Three Represents" political theory of former leader Jiang Zemin, which, among other things, recognises the role of private businesspeople in society. They say the party has been considering ways to make the process of picking its officials more democratic.
Those pushing for further reform will likely find a positive note in Mr Hu's words. Hopes had been high that Mr Hu would use July 1 to push for internal democracy. But he sidestepped the issue, focusing instead on Mr Jiang's theory. In following months, discussions on constitutional reforms were discouraged, cooling expectations for expanding democracy.
Since coming to power, Mr Hu has paid visits to the eight state-sanctioned democratic parties and groups, and consulted their leaders. But his speech, as reported by Xinhua, contained no reference to greater roles for these parties or suggestions that a multi-party system would be allowed.
Mr Hu said the rule of law should prevail in China, a situation that would require a strengthened legal system.
The notion of a "limited" government was aired again as Mr Hu urged further simplification of the administrative approval procedures so that the government would become lean and efficient.
He repeated his views that all official policies must meet the economic and social development needs of the people.
The best bet for peace - Arafat
SCMP-Tuesday, September 30, 2003
SUNANDA DATTA-RAY
The United States has done it again. Its veto of the United Nations Security Council resolution calling on Israel not to remove Palestinian Authority president Yasser Arafat reiterates the US' determination not to allow Israel to be brought within the discipline of international law - at a time when even some Israeli air force pilots are repudiating their government's strategy of selective assassination.
Always present, the US concern for Israel is especially marked in the run-up to an American presidential election. As former US president Harry Truman explained when reneging on Franklin D. Roosevelt's pledge of a Palestinian homeland, he had to answer to hundreds of thousands of people who were anxious for the success of Zionism but he did not have hundreds of thousands of Arabs among his constituents.
But the lone superpower has a wider constituency than presidential voters. American isolation there was exposed again when the UN General Assembly took up the thwarted security council resolution. Only the Marshall Islands, Micronesia and Israel supported the US.
Of course, Israel's security must be guaranteed. Of course, Hamas, Islamic Jihad and the al-Aqsa Martyrs' Brigade militants would deserve rigorous punishment if they persisted in terrorism after Israel vacates its legally and morally indefensible occupation of Arab land, which provokes retaliatory violence.
President George W. Bush has a tremendous opportunity to reaffirm that the US is a force for political democracy and economic justice by breaking this cycle of death and doing right to a wronged people. Success in the Israeli-Palestinian conflict would enormously help his mission in Afghanistan and Iraq.
Instead of dismissing Mr Arafat as a failed leader who should be removed, Mr Bush should recognise him as the "legitimate leader" who "embodies [the] Palestinian identity and national aspirations", to quote UN envoy to the Middle East Terje Toed-Larsen.
In adversity, Mr Arafat regained much of the popularity he had lost in power. Palestinians honoured him even more for standing firm when subjected to the continuous torture of blaring loudspeakers and blazing arc lamps in his gutted headquarters, with water and electricity cut off and key aides incarcerated. The probable objective was to reduce him to a nonentity by targeting loyalists and pressuring the populace.
Already, 75 per cent of Palestinians live below the poverty level. The US Agency for International Development says that 30 per cent of children under five suffer from chronic malnutrition and 21 per cent from acute malnutrition. Anaemia afflicts 45 per cent of the young and 48 per cent of women of childbearing age. Nearly a third of the Palestinians depend on food handouts. Not one of 300 households surveyed in the West Bank town of Nablus had potable water. Thanks to Israeli curfews, the Palestinian health authorities operate at 30 per cent capacity. Poor sanitation warns of communicable diseases.
Israel's proposed 360km security fence, biting deep into the West Bank to protect 200,000 Jewish squatters, threatens the livelihood of hundreds of thousands of Palestinian villages by cutting them off from their land. Even Mr Bush calls it a problem. The US might make a token cut in its US$9 billion loan guarantee to bail out Israel's recession-hit economy.
Mr Arafat did not launch the intifada (uprising) that forced Israel to the negotiating table. Palestinian radicals and intellectuals like the late Professor Edward Said accuse him of selling out. He cannot tackle the terrorists without risking civil war. Were Mr Arafat to be murdered, as Israeli Deputy Prime Minister Ehud Olmert hinted may happen, it would make him a martyr. Others, less prepared to compromise, would take his place. The Palestinians would give short shrift to a Bantustan-type puppet chieftain imposed by the US and Israel.
Mr Arafat is the best bet for a lasting solution. Instead of sidelining him, the US should strengthen his hand so that he can show his people that he has won a just peace. That means withdrawal from the territories - the Gaza Strip, Golan Heights, east Jerusalem and the West Bank - that Israel seized in 1967. Whether or not a Palestine is ever conceded sovereignty, there will be no peace in the Middle East as long as Israel is allowed to enjoy the fruits of conquest.
Sunanda Kisor Datta-Ray is a visiting senior research fellow at the Institute of Southeast Asian Studies, Singapore. The views expressed in this article are those of the author.
SUNANDA DATTA-RAY
The United States has done it again. Its veto of the United Nations Security Council resolution calling on Israel not to remove Palestinian Authority president Yasser Arafat reiterates the US' determination not to allow Israel to be brought within the discipline of international law - at a time when even some Israeli air force pilots are repudiating their government's strategy of selective assassination.
Always present, the US concern for Israel is especially marked in the run-up to an American presidential election. As former US president Harry Truman explained when reneging on Franklin D. Roosevelt's pledge of a Palestinian homeland, he had to answer to hundreds of thousands of people who were anxious for the success of Zionism but he did not have hundreds of thousands of Arabs among his constituents.
But the lone superpower has a wider constituency than presidential voters. American isolation there was exposed again when the UN General Assembly took up the thwarted security council resolution. Only the Marshall Islands, Micronesia and Israel supported the US.
Of course, Israel's security must be guaranteed. Of course, Hamas, Islamic Jihad and the al-Aqsa Martyrs' Brigade militants would deserve rigorous punishment if they persisted in terrorism after Israel vacates its legally and morally indefensible occupation of Arab land, which provokes retaliatory violence.
President George W. Bush has a tremendous opportunity to reaffirm that the US is a force for political democracy and economic justice by breaking this cycle of death and doing right to a wronged people. Success in the Israeli-Palestinian conflict would enormously help his mission in Afghanistan and Iraq.
Instead of dismissing Mr Arafat as a failed leader who should be removed, Mr Bush should recognise him as the "legitimate leader" who "embodies [the] Palestinian identity and national aspirations", to quote UN envoy to the Middle East Terje Toed-Larsen.
In adversity, Mr Arafat regained much of the popularity he had lost in power. Palestinians honoured him even more for standing firm when subjected to the continuous torture of blaring loudspeakers and blazing arc lamps in his gutted headquarters, with water and electricity cut off and key aides incarcerated. The probable objective was to reduce him to a nonentity by targeting loyalists and pressuring the populace.
Already, 75 per cent of Palestinians live below the poverty level. The US Agency for International Development says that 30 per cent of children under five suffer from chronic malnutrition and 21 per cent from acute malnutrition. Anaemia afflicts 45 per cent of the young and 48 per cent of women of childbearing age. Nearly a third of the Palestinians depend on food handouts. Not one of 300 households surveyed in the West Bank town of Nablus had potable water. Thanks to Israeli curfews, the Palestinian health authorities operate at 30 per cent capacity. Poor sanitation warns of communicable diseases.
Israel's proposed 360km security fence, biting deep into the West Bank to protect 200,000 Jewish squatters, threatens the livelihood of hundreds of thousands of Palestinian villages by cutting them off from their land. Even Mr Bush calls it a problem. The US might make a token cut in its US$9 billion loan guarantee to bail out Israel's recession-hit economy.
Mr Arafat did not launch the intifada (uprising) that forced Israel to the negotiating table. Palestinian radicals and intellectuals like the late Professor Edward Said accuse him of selling out. He cannot tackle the terrorists without risking civil war. Were Mr Arafat to be murdered, as Israeli Deputy Prime Minister Ehud Olmert hinted may happen, it would make him a martyr. Others, less prepared to compromise, would take his place. The Palestinians would give short shrift to a Bantustan-type puppet chieftain imposed by the US and Israel.
Mr Arafat is the best bet for a lasting solution. Instead of sidelining him, the US should strengthen his hand so that he can show his people that he has won a just peace. That means withdrawal from the territories - the Gaza Strip, Golan Heights, east Jerusalem and the West Bank - that Israel seized in 1967. Whether or not a Palestine is ever conceded sovereignty, there will be no peace in the Middle East as long as Israel is allowed to enjoy the fruits of conquest.
Sunanda Kisor Datta-Ray is a visiting senior research fellow at the Institute of Southeast Asian Studies, Singapore. The views expressed in this article are those of the author.
Big Brother mobile phone can track you to within 50m
SCMP-Tuesday, September 30, 2003
JIMMY LIU
The humble mobile phone is being turned into a tracking device worthy of James Bond.
Not content with its applications of voice conversation, taking pictures, sending e-mails and accessing the internet, Hong Kong researchers have converted it into a homing beacon that can pinpoint users to within 50 metres.
The researchers yesterday gave a halfway progress report on their Mobile Location Estimation Technology project, which has two years of government funding.
The system can now only locate users who are making a call with a specially modified SIM card. But in the next year researchers hope to be able to track users with any SIM card. They will hold a symposium next week for firms which could potentially offer services based on the system.
"As it can track people in populated areas, it could be a solution for police," said Lawrence Cheung Chi-chong, the Hong Kong Productivity Council's principal consultant in mobile business solutions and a research team member.
But the researchers envision it could also be used for commercial purposes, such as the tracking of trucks and even ordering takeaway.
"If you call for pizza, it could find the restaurant closest to where you are and deliver from there," fellow researcher and Baptist University computer scientist Joseph Ng Kee-yin said.
The $6 million project, paid for by the Innovation and Technology Fund, aims to link its system to existing phone networks.
It is a collective research effort involving the Productivity Council, Baptist University, the Wireless Technology Industry Association and the Institute of Vocational Education.
"The overall average error in location estimation has been reduced from 150 metres to 50 metres," Mr Cheung said.
He said people should not worry about privacy concerns as the service was designed to provide position information for customers and those from whom customers were seeking a service. Other than law enforcers, third parties would have no access to the system, he said.
Cartoon.
JIMMY LIU
The humble mobile phone is being turned into a tracking device worthy of James Bond.
Not content with its applications of voice conversation, taking pictures, sending e-mails and accessing the internet, Hong Kong researchers have converted it into a homing beacon that can pinpoint users to within 50 metres.
The researchers yesterday gave a halfway progress report on their Mobile Location Estimation Technology project, which has two years of government funding.
The system can now only locate users who are making a call with a specially modified SIM card. But in the next year researchers hope to be able to track users with any SIM card. They will hold a symposium next week for firms which could potentially offer services based on the system.
"As it can track people in populated areas, it could be a solution for police," said Lawrence Cheung Chi-chong, the Hong Kong Productivity Council's principal consultant in mobile business solutions and a research team member.
But the researchers envision it could also be used for commercial purposes, such as the tracking of trucks and even ordering takeaway.
"If you call for pizza, it could find the restaurant closest to where you are and deliver from there," fellow researcher and Baptist University computer scientist Joseph Ng Kee-yin said.
The $6 million project, paid for by the Innovation and Technology Fund, aims to link its system to existing phone networks.
It is a collective research effort involving the Productivity Council, Baptist University, the Wireless Technology Industry Association and the Institute of Vocational Education.
"The overall average error in location estimation has been reduced from 150 metres to 50 metres," Mr Cheung said.
He said people should not worry about privacy concerns as the service was designed to provide position information for customers and those from whom customers were seeking a service. Other than law enforcers, third parties would have no access to the system, he said.
Cartoon.
First, get your own house in order
SCMP-Monday, September 29, 2003
JOSEPH STIGLITZ
It is six years since the International Monetary Fund's fateful meeting in Hong Kong, just before the global financial crisis. I was there. What a peculiar meeting it was. To those paying attention, it was clear that a crisis loomed. Capital market liberalisation was the culprit, exposing countries to the vagaries of international capital flows - to both irrational pessimism and optimism, not to mention the manipulation of speculators.
Yet the IMF was still lobbying to change its charter to force countries to liberalise their capital markets, ignoring the evidence that it did not lead to enhanced growth or more investment, but only to more instability. The crises that erupted later that year undermined confidence in the IMF and led to discussions about "reforming the global financial architecture".
Now, we can say that those talks did not lead to much real change. Some suggest that the fancy term "reforming the global financial architecture" was a dead giveaway. The US Treasury and the IMF knew, or at least hoped, that with the passing of the crisis, global attention would turn elsewhere. While wrong about what to do in the crisis, on this point they were right.
But change has occurred, although sometimes more in rhetoric than reality. Today, the IMF is more aware of the impact its programmes have on poverty - although it still does not produce a "poverty and unemployment impact" statement when it presents a programme. It has recognised the importance of participation and ownership. No longer are programmes simply a matter between the IMF, central bank governors and finance ministers. The IMF has recognised that there was excessive conditionality, and that these conditions led to a lack of focus.
The IMF has not, however, fully grasped that the conditions were often dangerously misguided and often dealt with political issues that were beyond its mission. After criticising the East Asian countries for a lack of transparency, the IMF acknowledged that it, too, was insufficiently transparent, and made reforms - although sometimes it seems that it thinks that a better website is a substitute for real transparency. Unfortunately, it still has not recognised a basic principle underlying modern democracy: citizens' right to know.
After the failure of the Argentina bailout, the IMF recognised the need for an alternative approach. Earlier, it ignored calls for standstills and bankruptcy, saying that would entail the abrogation of the debt contract. Finally, the IMF recognised that just as individuals need the right to a fresh start, so do governments. Unfortunately, it did not recognise that as a major creditor, it could never be viewed as an impartial judge, and so could not have a pivotal role. It never fully grasped the political and economic issues underlying the design of bankruptcy laws.
Under pressure from the global civil society, the IMF finally did agree to an enhanced debt-forgiveness programme for the poorest countries. Regrettably, it set standards and procedures such that few countries achieve the debt relief they need. At least in East Asia, the IMF recognised that excessive fiscal stringency contributed to the downturn, although it still pushed excessive fiscal stringency in Argentina when it went into crisis, with predictably disastrous results.
It is good news that the IMF has recognised the limits of its policies and positions. But we should expect more of the IMF than just doing less harm than in the past. Even without capital market liberalisation, the world will continue to face enormous volatility. Crises will not be things of the past.
Those who expected major reforms in the global financial architecture may well be sorely disappointed by what has happened in the past six years. Any fundamental reforms must address not only the difficult problems posed by the global reserve system and the burdens of risk borne by the developing countries, but also global governance. But there are strong vested interests in upholding the status quo. It is one thing to rearrange the chairs around the table, and quite another to change the table itself or those who have a seat at it.
So it is no surprise that another annual meeting of the IMF passed without any major steps forward in "reforming the global financial architecture". Instead, there was much discussion of another one of the symptoms that something is wrong. The issue of the day was whether China's exchange rate is overvalued, and if so, what should be done about it. Developing countries were told, once again, to get their houses in order, to address issues of governance, and to undertake "painful" structural reforms.
It is, of course, always much easier to encourage others to undertake painful reforms than to look inward. The failed World Trade Organisation meeting in Cancun should serve as a warning: something is fundamentally wrong with how the global trading system is managed. There is also something fundamentally wrong with the global financial system. How many more meetings of the IMF will pass, how many more crises will occur, before this harsh truth sinks in?
Joseph Stiglitz, a Nobel laureate in economics, is a professor of economics at Columbia University and was chairman of the Council of Economic Advisers to US president Bill Clinton and chief economist and senior vice-president at the World Bank. Copyright: Project Syndicate, September 2003
JOSEPH STIGLITZ
It is six years since the International Monetary Fund's fateful meeting in Hong Kong, just before the global financial crisis. I was there. What a peculiar meeting it was. To those paying attention, it was clear that a crisis loomed. Capital market liberalisation was the culprit, exposing countries to the vagaries of international capital flows - to both irrational pessimism and optimism, not to mention the manipulation of speculators.
Yet the IMF was still lobbying to change its charter to force countries to liberalise their capital markets, ignoring the evidence that it did not lead to enhanced growth or more investment, but only to more instability. The crises that erupted later that year undermined confidence in the IMF and led to discussions about "reforming the global financial architecture".
Now, we can say that those talks did not lead to much real change. Some suggest that the fancy term "reforming the global financial architecture" was a dead giveaway. The US Treasury and the IMF knew, or at least hoped, that with the passing of the crisis, global attention would turn elsewhere. While wrong about what to do in the crisis, on this point they were right.
But change has occurred, although sometimes more in rhetoric than reality. Today, the IMF is more aware of the impact its programmes have on poverty - although it still does not produce a "poverty and unemployment impact" statement when it presents a programme. It has recognised the importance of participation and ownership. No longer are programmes simply a matter between the IMF, central bank governors and finance ministers. The IMF has recognised that there was excessive conditionality, and that these conditions led to a lack of focus.
The IMF has not, however, fully grasped that the conditions were often dangerously misguided and often dealt with political issues that were beyond its mission. After criticising the East Asian countries for a lack of transparency, the IMF acknowledged that it, too, was insufficiently transparent, and made reforms - although sometimes it seems that it thinks that a better website is a substitute for real transparency. Unfortunately, it still has not recognised a basic principle underlying modern democracy: citizens' right to know.
After the failure of the Argentina bailout, the IMF recognised the need for an alternative approach. Earlier, it ignored calls for standstills and bankruptcy, saying that would entail the abrogation of the debt contract. Finally, the IMF recognised that just as individuals need the right to a fresh start, so do governments. Unfortunately, it did not recognise that as a major creditor, it could never be viewed as an impartial judge, and so could not have a pivotal role. It never fully grasped the political and economic issues underlying the design of bankruptcy laws.
Under pressure from the global civil society, the IMF finally did agree to an enhanced debt-forgiveness programme for the poorest countries. Regrettably, it set standards and procedures such that few countries achieve the debt relief they need. At least in East Asia, the IMF recognised that excessive fiscal stringency contributed to the downturn, although it still pushed excessive fiscal stringency in Argentina when it went into crisis, with predictably disastrous results.
It is good news that the IMF has recognised the limits of its policies and positions. But we should expect more of the IMF than just doing less harm than in the past. Even without capital market liberalisation, the world will continue to face enormous volatility. Crises will not be things of the past.
Those who expected major reforms in the global financial architecture may well be sorely disappointed by what has happened in the past six years. Any fundamental reforms must address not only the difficult problems posed by the global reserve system and the burdens of risk borne by the developing countries, but also global governance. But there are strong vested interests in upholding the status quo. It is one thing to rearrange the chairs around the table, and quite another to change the table itself or those who have a seat at it.
So it is no surprise that another annual meeting of the IMF passed without any major steps forward in "reforming the global financial architecture". Instead, there was much discussion of another one of the symptoms that something is wrong. The issue of the day was whether China's exchange rate is overvalued, and if so, what should be done about it. Developing countries were told, once again, to get their houses in order, to address issues of governance, and to undertake "painful" structural reforms.
It is, of course, always much easier to encourage others to undertake painful reforms than to look inward. The failed World Trade Organisation meeting in Cancun should serve as a warning: something is fundamentally wrong with how the global trading system is managed. There is also something fundamentally wrong with the global financial system. How many more meetings of the IMF will pass, how many more crises will occur, before this harsh truth sinks in?
Joseph Stiglitz, a Nobel laureate in economics, is a professor of economics at Columbia University and was chairman of the Council of Economic Advisers to US president Bill Clinton and chief economist and senior vice-president at the World Bank. Copyright: Project Syndicate, September 2003
Unions have vital role during transition
SCMP-Monday, September 29, 2003
As China's economy moves away from top-down planning and domination by state-owned companies, complications over workplace safety and other labour rights will grow. Unions and labour groups can play an important mediating role in this area, and recent changes made at the All-China Federation of Trade Unions gathering in Beijing represent a step in the right direction. The changes include putting protection of workers' rights in the group's constitution and at the heart of its mission, opening up membership to the millions of migrant workers who leave the countryside each year to look for work in the cities and preparing the group for direct elections of union chairmen on a one-member, one-vote basis.
The ACFTU is a powerful group, claiming 134 million members nationwide, but its subsidiary unions have long been criticised for being too close to the government and the companies that employ their members. The challenges of a rapidly developing marketing economy - including layoffs at inefficient state-owned enterprises, labour abuses at privately owned companies and the need to protect migrant labourers - means that truly independent unions are needed now more than ever.
That may not happen overnight, but some groundwork is being laid. In addition to the recent changes, a national labour law was amended two years ago to clarify that labour unions are non-governmental organisations.
Even more has to be done to make sure that employees' rights are looked after as China moves from an economy based on agriculture and heavy industry to a more complex one where growth is driven by privately owned firms and light manufacturing for the international market. Workers' rights to adequate compensation, safe working conditions and proper training can be better assured if leaders and union organisers are receiving their wages from their union members rather than from the employers.
State statistics estimate that 5 million new workers come to the cities each year looking for work, and similar numbers are laid off by state-owned companies annually. The measure of the ACFTU's success should be in how well it protects the welfare of these most vulnerable members of the labour force. Changes made to the unions' mandate and structure should be made with this goal in mind. We have already witnessed demonstrations by laid-off factory workers who are not satisfied with the terms of their compensation. One way to defuse the dangers of more such discontent is to assure that unions represent the workers' interests and are equipped to advocate on their behalf.
As China's economy moves away from top-down planning and domination by state-owned companies, complications over workplace safety and other labour rights will grow. Unions and labour groups can play an important mediating role in this area, and recent changes made at the All-China Federation of Trade Unions gathering in Beijing represent a step in the right direction. The changes include putting protection of workers' rights in the group's constitution and at the heart of its mission, opening up membership to the millions of migrant workers who leave the countryside each year to look for work in the cities and preparing the group for direct elections of union chairmen on a one-member, one-vote basis.
The ACFTU is a powerful group, claiming 134 million members nationwide, but its subsidiary unions have long been criticised for being too close to the government and the companies that employ their members. The challenges of a rapidly developing marketing economy - including layoffs at inefficient state-owned enterprises, labour abuses at privately owned companies and the need to protect migrant labourers - means that truly independent unions are needed now more than ever.
That may not happen overnight, but some groundwork is being laid. In addition to the recent changes, a national labour law was amended two years ago to clarify that labour unions are non-governmental organisations.
Even more has to be done to make sure that employees' rights are looked after as China moves from an economy based on agriculture and heavy industry to a more complex one where growth is driven by privately owned firms and light manufacturing for the international market. Workers' rights to adequate compensation, safe working conditions and proper training can be better assured if leaders and union organisers are receiving their wages from their union members rather than from the employers.
State statistics estimate that 5 million new workers come to the cities each year looking for work, and similar numbers are laid off by state-owned companies annually. The measure of the ACFTU's success should be in how well it protects the welfare of these most vulnerable members of the labour force. Changes made to the unions' mandate and structure should be made with this goal in mind. We have already witnessed demonstrations by laid-off factory workers who are not satisfied with the terms of their compensation. One way to defuse the dangers of more such discontent is to assure that unions represent the workers' interests and are equipped to advocate on their behalf.
Row looms over WTO peace clause
SCMP-Monday, September 29, 2003
AGENCE FRANCE-PRESSE in Geneva
War clouds loom over the World Trade Organisation (WTO) because a peace clause, which protects farm subsidisers like the United States, is due to expire at the start of next year, say experts.
The move would further complicate efforts to liberalise trade after the collapse of global talks this month in the Mexican resort of Cancun amid bitter divisions between rich and poor nations, they warn.
The abrupt end to the Cancun meeting spoiled plans to discuss extending the nine-year peace clause, borne from the 1994 Uruguay Round agreement, which prevents countries from complaining to a dispute settlement body about agriculture subsidies by other member states.
A WTO meeting in Geneva in mid-December is the last chance of an extension, but developing nations that suffer most from heavily subsidised exports are unlikely to agree without concessions from key subsidising culprits such as the European Union (EU) and Japan.
"As we speak today, the peace clause will come and go," predicted Canada's WTO ambassador, Sergio Marchi. "In the aftermath of Cancun, I hope that people don't use the dispute settlement body vindictively to get even or settle scores."
An EU trade official predicted that failure to negotiate a deal by December would result in "quite a lot" of disputes.
The combative G22 alliance of developing countries, which includes Brazil and other members of the 17-nation Cairns Group of agricultural exporters, is most likely to use the powers unleashed as the clause expires. But the EU official warned: "In this sort of atmosphere, everyone might start throwing things at each other."
A Brazilian source from the WTO in Geneva insisted his country did not have a hit list of member states it would target on the morning of January 2. "At the same time, if we feel that a country is using trade-distorting subsidies then we would make a complaint," he said.
There was a slim possibility the peace clause may be extended at the ambassador-level WTO meeting on December 15, the EU trade official said.
The Moroccan ambassador, Omar Hilale, disagreed, arguing that such a compromise was unlikely as many Latin American and Asian countries held very different views to nations such as the United States.
"I remain pessimistic," he said. A sharp rise in trade disputes would further prolong the Doha round of talks aimed at freeing up global trade, which already appears likely to miss its January 2005 deadline, according to experts.
Mr Marchi said: "We need leadership from both the north and the south to help us move forward. If we only see litigation as a solution then that may be an additional complication rather than a salvation."
If nothing else, the potential end to the peace clause will prompt fresh discourse.
Developing countries would be able to use the clause to push richer nations to reduce subsidies, US experts Richard Steinberg and Timothy Josling noted in an article in the Journal of International Economic Law.
"Ultimately, expiry of the peace clause will do what it was intended to do: light a fire under negotiations on trade-distorting agricultural subsidies," they said.
AGENCE FRANCE-PRESSE in Geneva
War clouds loom over the World Trade Organisation (WTO) because a peace clause, which protects farm subsidisers like the United States, is due to expire at the start of next year, say experts.
The move would further complicate efforts to liberalise trade after the collapse of global talks this month in the Mexican resort of Cancun amid bitter divisions between rich and poor nations, they warn.
The abrupt end to the Cancun meeting spoiled plans to discuss extending the nine-year peace clause, borne from the 1994 Uruguay Round agreement, which prevents countries from complaining to a dispute settlement body about agriculture subsidies by other member states.
A WTO meeting in Geneva in mid-December is the last chance of an extension, but developing nations that suffer most from heavily subsidised exports are unlikely to agree without concessions from key subsidising culprits such as the European Union (EU) and Japan.
"As we speak today, the peace clause will come and go," predicted Canada's WTO ambassador, Sergio Marchi. "In the aftermath of Cancun, I hope that people don't use the dispute settlement body vindictively to get even or settle scores."
An EU trade official predicted that failure to negotiate a deal by December would result in "quite a lot" of disputes.
The combative G22 alliance of developing countries, which includes Brazil and other members of the 17-nation Cairns Group of agricultural exporters, is most likely to use the powers unleashed as the clause expires. But the EU official warned: "In this sort of atmosphere, everyone might start throwing things at each other."
A Brazilian source from the WTO in Geneva insisted his country did not have a hit list of member states it would target on the morning of January 2. "At the same time, if we feel that a country is using trade-distorting subsidies then we would make a complaint," he said.
There was a slim possibility the peace clause may be extended at the ambassador-level WTO meeting on December 15, the EU trade official said.
The Moroccan ambassador, Omar Hilale, disagreed, arguing that such a compromise was unlikely as many Latin American and Asian countries held very different views to nations such as the United States.
"I remain pessimistic," he said. A sharp rise in trade disputes would further prolong the Doha round of talks aimed at freeing up global trade, which already appears likely to miss its January 2005 deadline, according to experts.
Mr Marchi said: "We need leadership from both the north and the south to help us move forward. If we only see litigation as a solution then that may be an additional complication rather than a salvation."
If nothing else, the potential end to the peace clause will prompt fresh discourse.
Developing countries would be able to use the clause to push richer nations to reduce subsidies, US experts Richard Steinberg and Timothy Josling noted in an article in the Journal of International Economic Law.
"Ultimately, expiry of the peace clause will do what it was intended to do: light a fire under negotiations on trade-distorting agricultural subsidies," they said.
