Warning, we have been unable to confirm that the free money bonus is given by Maxim88. Try 212play or UWin33 instead.

• 12Play — Best new site. Strong promotions low wagering on the welcome pack and a 7-level VIP club. Register at 12Play ⇒
• Uwin33 — Best for mobile. Dedicated app smooth UX and mobile specific bonuses. Register at UWIN33 ⇒

Maxim88 Register to Get Free Credits is pretty straight forward. First choose a username and a password. Then make sure to fill in your full name correctly as it appears on your bank account statement. This is important in order to not run into problems later when you want to withdraw money that you win. It’s also important that you fill in a working email address and a working mobile phone number.

If you fail to enter proper information, you might have problems to recover your account if you forget your password. You might also miss out on great promotions if The Maxim88 Register can’t contact you in the future. If you MAximo88 register but don’t have money to make a deposit immediately, you might receive a free credit no deposit bonus offer sent to your email or phone number later on. You can leave the field for Affiliate / Referral ID empty, since you automatically get the Maximi88 register bonus if you go to Maxim88 via a link on this website.

Maxim88 Casino: A Detailed Analysis for Malaysia

Maxim88 stands out in the competitive online gambling landscape with a keen understanding of the significance promotions hold for players. This casino categorizes its incentives broadly, encompassing introductory offers, replenishment bonuses, and privileges for VIP members. It’s prudent for gamers to familiarize themselves with the specific terms and conditions, as these dictate the wagering stipulations tied to each bonus.

For newcomers, Maxim88 registrate extends a welcoming gesture to new players in the form of a deposit match. This welcome bonus doubles the initial deposit, activated by a minimum contribution of SGD 50. The casino presents this offer in two distinct forms, each subject to a 20-times wagering prerequisite prior to withdrawal eligibility. Additional promotional offerings include:

• Weekly Slots Cashback
• Daily Top-Up Incentives
• Endless Daily Cashback Rewards

Renowned across Malaysia and other Asian regions, Maxim88 has been a significant player in the online gambling world since 2006. It’s celebrated for its extensive selection of games from top software developers, including industry giant Evolution Gaming. The casino’s appeal is heightened by its generous bonuses and promotions, featuring reasonable wagering requirements. Additionally, it offers a VIP scheme packed with exclusive rewards.

Maxim88 Register Casino operates under a license from PAGCOR and incorporates advanced security measures. Its RNG system undergoes regular independent audits to confirm fairness. The casino’s website is easily accessible through standard browsers, and there’s an option to download a complimentary app compatible with both Android and iOS devices. Continue reading our detailed review for insights into payment methods, customer service, and more. Complete your Mazimo88 Register to find out!

Participation Details of a Typical Maxim88 Malaysia Draw

Membership in Maxim88 Register affords automatic entry into their engaging draw program. Only gameplay involving Evolution Gaming’s offerings contributes towards turnover accumulation.

Post the weekly cut-off, Maxim88 sends notifications detailing the “number of tickets” each member has earned.

Calculation Period for the Maxim88 Draw Turnover is tallied weekly, starting each Monday at 00:00:00 (GMT+8) and concluding on Sunday at 23:59:59 (GMT+8).

Draw Schedule The excitement unfolds every Monday at 19:00 (GMT+8) when the Maxim88 Draw is held.

Result Announcement Winners are announced on the Maxim88 Draw Page. Additionally, weekly winners receive notifications about “The Prize of the Maxim88 Draw.”

Prize Allocation Winners find their prizes deposited into their member wallets by 20:00 (GMT+8) on the draw day. Prizes range grandly, with the top three being MYR12,888, MYR8,888, and MYR6,888 respectively. Additionally, 200 consolation prizes of MYR88 are awarded.

The draw is a continuous, year-long affair.

Weekly Prize Structure 1st Prize: MYR 12,888 2nd Prize: MYR 8,888 3rd Prize: MYR 6,888 200 Consolation Prizes: MYR 88 each. This apply to previously registered players as well as newly Maximo88 Registre mambers.

Overview of Maxim88 Raffle Draw

The Maxim88 Raffle Draw stands as a highlight for users of Maxim88, eagerly awaited due to its impressive prizes. Exclusive to Maxim88 account holders, the raffle operates year-round without any special registrate process. This draw distinguishes Maxim88 as a premier online casino in Malaysia, offering substantial prizes to its dedicated players.

Understanding the Raffle Draw

A raffle draw is a form of competition where participants are assigned random numbers, with the winning number securing the prize. This event, rooted in chance, provides enjoyment for all involved. The draw updates weekly, refreshing every Monday, so participants should regularly check for any new developments.

Eligibility for Maxim88 Raffle Draw

To participate in the Maxim88 Raffle Draw, simply having a Maxim88 account is sufficient. Account IDs are automatically entered into the draw. For those without an account, signing up is a step towards joining this exciting event, promising the chance to win cash and enjoy top-tier online casino games. Visit our sign-up page for details on account creation.

Event Mechanics

The draw operates through ticket distribution. Each 100 valid bets or turnovers by a Maxim88 account holder earn a ticket, delivered to their inbox labeled “number of ticket.” Weekly, the Maxim88 team selects over 200 random numbers as lottery winners. Winners are announced each Monday on our raffle draw page, including a grand prize, two secondary prizes, one tertiary prize, and 200 consolation prizes. Explore our terms and conditions for detailed insights into prize allocation and winner announcement.

Prizes and Rewards

The raffle draw allocates 1,288 MYR to the top winner, 888 MYR to second place, and 688 MYR to third. All other participants receive 88 MYR as a consolation. Prizes are notified via “the prize of the Maxim88 draw” in the winner’s inbox and are distributed following the announcement.

Event Rules and Regulations

Creating multiple accounts to enhance winning odds is strictly prohibited and may result in a ban. Wager accumulation is valid on all Maxim88 providers except for 918kiss, allbet, IDN Poker, and Mega888. Maxim88 reserves the right to modify or terminate any aspect of this event. For comprehensive details, visit the Maxim88 draw website.

Increasing Chances for Raffle Tickets

Players can acquire multiple entry tickets for the Raffle Draw. Each ticket, unique in number, enhances winning chances. Tickets accrue with every 100MYR worth of valid turnover. Active gameplay on Maxim88, especially in online slot games, increases ticket numbers, thereby boosting winning probabilities. Stay engaged to maximize your chances in this ongoing event.

Diverse Range of Casino Games for Malaysia

Maxim88 Casino’s game library is extensive, predominantly featuring video slots, but also including table games and live dealer options. A standout feature is the ability to try games in a free mode, except for live casino offerings. The games cater to various budget levels, and locating your favorite is simplified with effective filter options, sorting by software provider, type, and more.

Online Slots The slots selection encompasses all types, from video slots and classic fruit machines to progressive jackpots. Top slot recommendations include titles like Mega 7, Joker’s Treasure, and Candy Bonanza.

Table Games For table game enthusiasts, there’s a selection of popular games including Hulu Cock, Sic Bo, Dragon Tiger, and Lucky Cup, among others.

Additional Casino Games

Beyond slots and table games, Maxim88 offers a range of arcade games. Some top arcade picks are Derby Night, Bicycle Race, and Dog Racing.

Exhilarating Live Casino Experience Maxim88 excels in its live casino offerings, featuring games hosted by professional and engaging dealers. These games are categorized by provider, making it easy to find your preferred live game such as Roulette, Baccarat, Poker, and Dragon Tiger.

Reputable Software Providers The games at Maxim88 are supplied by seasoned developers in the iGaming industry, leveraging the latest technologies like HTML5 for immersive and feature-rich gaming experiences. These games are optimized for both app and browser play across mobile and PC platforms. Key software providers include Evolution Gaming, NextGen Gaming, and SA Gaming, among others.

Maxim88 Casino: An In-Depth Look

Maxim88, renowned in Malaysia nd across Asia, has been a key player in the online casino scene since 2006. It’s admired for its vast array of games from prestigious software houses like Evolution Gaming. A major draw for this site is its enticing bonuses and promotions that come with reasonable wagering conditions. Moreover, it boasts a VIP scheme brimming with exclusive perks.

The site operates under PAGCOR’s license, ensuring a secure environment with modern safety protocols. Its RNG system undergoes rigorous checks by iTech Labs, maintaining fairness. You can access the site easily via browsers or download the versatile app suitable for Android and iOS.

Maxim88’s Interface: Simple Yet Captivating

While Maxim88’s website design is straightforward, its charm is undeniable. Adorned in hues of green, white, and yellow, the main menu and easy-to-find ‘Join Now’ and ‘Login’ buttons grace the top right corner. A banner highlighting current bonuses and promotions catches the eye. A scroll down reveals a treasure trove of casino games, sports options, VIP details, and more. Convenient buttons for raffles, app downloads, or contacting support enhance the user experience.

Mobile Device Compatibility

Maxim88 caters to on-the-move players. Its website is accessible on all browsers, ensuring you’re never far from the action. Additionally, dedicated apps for Android and iOS devices are available, broadening the casino’s reach.

Commitment to Security and Fair Play

Maxim88 prioritizes customer security, employing cutting-edge technology to safeguard user data and funds. Its RNG software undergoes regular audits, affirming its unbiased nature.

Strict Licensing and Regulation Like other top Asian casinos, Maxim88 adheres to regulations set by a reputable authority. Malaysianplayers can expect standardized services regulated by PAGCOR, known for its commitment to player protection.

Generous Bonuses and Ongoing Promotions Malaysianplayers can indulge in a range of enticing bonuses and promotions. However, it’s wise to familiarize yourself with the terms and conditions to fully understand each offer. Current promotions include:

• A 288% Welcome Bonus for first-time depositors, up to SGD 288, available on various casino games (excluding 918kiss and Mega888 games). Select the MO (Michael Owen) Welcome Bonus when depositing.
• A wagering requirement of 20x applies to the bonus winnings.

Additional Promotions Beyond the welcome offer, Maxim88 delights players with daily and weekly rewards, referral bonuses, birthday bonuses, and cashback offers.

Diverse Payment Options Supporting a range of payment methods, Maxim88 ensures hassle-free transactions. The minimum deposit is SGD 40, with a maximum set at SGD 50,000, varying by method. Withdrawal limits range from SGD 50 to SGD 20,000 per day, with no monthly cap. Popular methods include EeziePay, Help2Pay, and Bank Transfers, accommodating both SGD and MYR currencies.

An Elite VIP Program The casino’s VIP program offers lavish treatment with incentives like birthday and reload bonuses. There are five VIP levels:

• Classic: Minimum deposit MYR 50,000 / SGD 30,000.
• Silver: Minimum deposit MYR 150,000 / SGD 100,000
• Gold: Minimum deposit MYR 500,000 / SGD 250,000
• Platinum: Minimum deposit MYR 800,000 / SGD 500,000
• Crockford: Invitation only.

Comprehensive Customer Support Maxim88’s FAQ page provides detailed answers to common queries. A dedicated support team is available 24/7 via WeChat, Whatsapp, and Live Chat for further assistance.

Language Support The casino’s content is accessible in English, Chinese, and Malay, catering to a diverse audience.

Conclusion Maxim88 stands out as a top-notch platform, offering a vast range of gambling products and features. It’s characterized by a user-friendly interface, both on the app and the website, and upholds the highest security standards. Licensed and encrypted, Maxim88 is an excellent choice for MAlaysianplayers with varying preferences and budgets. Players are encouraged to explore and Mzximom88 register at Maxim88 Casino, always remembering to gamble responsibly.

Maxim88 Register Domain Entrance Links

For Maximo88 Register, try to following domains: maxim88.com, maxim88.net, maxim88malaysia.com, maxim88playsg.com

Is Maxim88 Reputable?

For those seeking a reliable and trusted online casino experience, Maxim88 is a name synonymous with quality and continuous excitement. It offers an ideal starting point for players eager to dive into the exhilarating world of live casino gaming. Recognized for its efficient and stable platform, Maxim88 caters to the diverse preferences of online casino enthusiasts across Malaysia, ensuring an unmatched gaming journey. Maxim88, a beacon of excellence in Malaysias’ sonline casino landscape, prides itself on delivering an unmatched gaming experience. Our dedication extends beyond mere entertainment; we focus on ensuring a secure, seamless, and thoroughly enjoyable gaming journey. Boasting credentials from globally recognized regulatory bodies, Maxim88 sets the standard for a safe and trustworthy gaming habitat. Our robust server infrastructure guarantees a pristine gaming environment, devoid of any disruptive adware, malware, and any fraudulent activities. For those seeking a reliable online casino, Maxim88 stands as a trustworthy haven.

Determining the reputation of an online casino like Maxim88 can be challenging as it often depends on various factors and individual player experiences. Here are some aspects to consider when evaluating the reputation of Maxim88 or any online casino:

1. Licensing and Regulation: Check if Maxim88 is licensed and regulated by a reputable authority. A license from a respected regulatory body indicates adherence to certain standards of fairness and security.
2. Player Reviews and Feedback: Look for player reviews on independent forums and websites. Keep in mind that individual experiences can vary, but consistent patterns in feedback can be telling.
3. Game Fairness and RNG Testing: Reputable casinos use Random Number Generators (RNG) to ensure fair play. Check if Maxim88’s games are regularly audited by independent organizations for fairness.
4. Customer Support and Service: Consider how well the casino supports its players. Effective, responsive, and helpful customer service is a good indicator of a casino’s commitment to its players.
5. Payment and Withdrawal Policies: Reputable casinos have clear, consistent, and fair policies regarding deposits and withdrawals. Delays or issues in payouts can be a red flag.
6. Promotions and Bonuses: While attractive bonuses are common in online casinos, it’s important to read the terms and conditions. Reputable casinos offer fair and transparent bonus policies.
7. Security Measures: A reputable online casino should employ robust security measures to protect personal and financial information.

It’s crucial to gather information from various sources to get a well-rounded view of Maxim88’s reputation.

Maxim88 A Second Opinion

Maxim88 Casino stands out in the online gaming sphere, renowned for its comprehensive gaming options. Distinguished for its unique offerings, this casino presents a rich selection of games to suit diverse player preferences.

An Array of Gaming Choices Maxim88 Casino boasts a diverse game library, accommodating every gamer’s taste. This selection encompasses video slots, progressive jackpots, classic table games, and captivating live dealer sessions, thanks to partnerships with leading software developers. Players can immerse themselves in various game styles, from traditional slots to dynamic live dealer encounters.

For enthusiasts seeking a deeper engagement, Maxim88 also provides downloadable apk files, enriching the gaming experience. Popular titles here include:

• Vibrant online slots like ‘Crazy Bomber’ and ‘Fiery Sevens’
• Enticing Mega888 games
• Progressive jackpot slots such as ‘Golden Lotus’
• Classic table games including blackjack and roulette
• Live dealer games like live blackjack and roulette
• E-sports betting options through TF Gaming and IM Esports
• Engaging lottery games like the Grand Dragon Lottery
• Interactive fishing games including ‘Fishing Paradise’

Promotions and Player Rewards Maxim88 Casino believes in appreciating its patrons, offering an array of bonuses and promotional activities. Players are invited to frequently visit the promotions page, ensuring they stay updated on the latest rewarding opportunities.

Financial Transactions at Maxim88 Maxim88 casino supports various payment and withdrawal methods, ensuring secure and swift transactions. The Maxim88 e-wallet casino offers a safe and reliable environment for financial dealings, though some players have expressed concerns over payout speeds and limits.

Navigating the Maxim88 Casino Experience User Interface and Accessibility The Maxim88 Casino website offers an intuitive and user-friendly interface. Its well-structured design ensures easy access to essential information and gaming options. The site’s multilingual support, including English, Chinese, and Malay, caters to a broad audience. Responsiveness and quick loading times enhance the gaming experience, both on desktop and mobile platforms.

Mobile Adaptability Maxim88 Casino’s mobile compatibility caters to on-the-go gamers. The optimised mobile website delivers a seamless experience across Android and iOS devices, with no additional software or app downloads required. Customer Assistance Maxim88 Casino provides effective customer support, available 24/7 through various channels. The responsive live chat support and an extensive FAQ section address player queries efficiently.

Maxim88 Casino’s Commitment to Security Licensing and Regulation: Holding a Malta Gaming Authority license, Maxim88 adheres to strict standards and regulations. Data Protection: Advanced encryption technologies safeguard players’ personal and financial data. Fair and Responsible Gaming: The casino employs a certified RNG for game fairness and promotes responsible gaming practices, including self-imposed deposit limits.

In Conclusion While Maxim88 Casino offers an appealing selection of games and mobile support, it has garnered mixed reviews. Player feedback highlights concerns about clarity in terms and conditions, and withdrawal limits. Despite its popularity in Malaysia and other Asian regions, we advise potential players to weigh these factors carefully. If choosing t0 to qat Maxim88 register, it’s recommended to proceed with caution, keeping in mind both the advantages and noted concerns.

The Maxim88 Register VIP Lounge

Slogan: With Maxim88 Register Every Moment is Elevated

Exclusive VIP Membership at Maxim88

Embark on a journey of unparalleled exclusivity with our VIP program. This elite membership unlocks a world of Maxim88 privileges, including unique bonuses, special gifts, generous rebates, and captivating promotions designed just for you.

Elevate Your Gaming with Maxim88 VIP

Experience the epitome of luxury gaming on our platform. We offer a diverse array of the latest and most comprehensive gaming options, ensuring a service standard that exceeds expectations. Gain privileged access to our Evolution Salon Privé table, where one-to-one live gaming awaits, providing a deeply immersive experience. It’s an environment crafted for memorable gaming adventures, tailored to help you reach your gaming zenith.

Our dedicated professional team stands by 24/7, committed to assisting with any request or support. Your satisfaction is our foremost priority, ensuring every aspect of your VIP journey with Maxim88 is nothing short of exceptional.

How to Become VIP at Maxim88

	Classic	Silver	Gold	Platinum	Crockford
Minimum deposit within a month	MYR 50,000 SGD 30,000	MYR 150,000 SGD 100,000	MYR 500,000 SGD 250,000	MYR 800,000 SGD 500,000	Invitation Only
Identity verification	Identity Verification is Required for Maxim88 VIP Upgrade
Maxim88 Register Special service support
Deposit priority	High	Higher	First	First	First
Withdrawal priority	High	Higher	First	First	First
24/7 support
Designated account manager
Maximum transaction limit size	MYR 50,000 SGD 30,000	MYR 50,000 SGD 30,000	MYR 50,000 SGD 30,000	MYR 50,000 SGD 30,000	MYR 50,000 SGD 30,000
Daily transactions allowed	10 10	15 15	15 15	20 20
Daily withdrawal amount allowed	MYR 50,000 SGD 30,000	MYR 80,000 SGD 40,000	MYR 100,000 SGD 60,000	MYR 200,000 SGD 80,000	SGD 100,000
Maxim88 Register Exclusive bonuses
Tier upgrade bonus	100	200	500	1000	2000
Birthday bonus	78	288	588	888	1888
Maxim88 Register Special rebates
Slot rebate	0.30%	0.40%	0.50%	0.60%	0.70%
Live casino rebate	0.40%	0.50%	0.60%	0.70%	0.80%
Sport rebate	0.60%	0.70%	0.80%	0.90%	1.00%
Maxim88 Register Gifts & treats
Special birthday gift
Festival gift
Maxim88 Register Referral bonus program
Free bets for friends (unlimited)
Tier upgrade requirement
Min deposit	MYR 50,000 SGD 30,000	MYR 150,000 SGD 100,000	MYR 500,000 SGD 250,000	MYR 800,000 SGD 500,000	Invitation Only
Min deposit count	5⃣	1⃣	1⃣	1⃣
VIP maintenance requirements
Min deposit within 3 months		MYR 80,000 SGD 40,000	MYR 180,000 SGD 80,000	MYR 500,000 SGD 150,000	Invitation Only
Min turnover within 3 months		MYR 800,000 SGD 200,000	MYR 1,800,000 SGD 400,000	MYR 5,000,000 SGD 800,000	Invitation Only
Membership renewal	Lifetime	3 Months	3 Months	3 Months	3 Months

* Terms & Conditions Apply

FAQs on Maxim88’s Live Dealer Games

• Diverse Live Dealer Games: At Maxim88, our registered members are treated to an array of live dealer games, including but not limited to Roulette, Blackjack, Poker, Sic Bo, Dragon Tiger, and Baccarat.
• Multiple Game Providers: Our platform offers a rich selection of live dealer games from a variety of esteemed providers, including Evolution Gaming, Microgaming, SA Gaming, Sexy Baccarat, and more, ensuring a diverse gaming experience.
• Safety in Live Gaming: Playing live games at Maxim88 is a secure experience. We employ advanced security protocols to maintain data protection and compliance, ensuring player safety at all times.
• Mobile Gaming Compatibility: Like many other Malaysia-based betting platforms, Maxim88 provides mobile gaming solutions. Our mobile apps facilitate easy and rapid access to a wide array of games, enhancing the overall mobile gaming experience.

Read more in aour articles specifically for casino in Malaysia and how to Maxim88 Register for maximum bonus.

The post 🇲🇾Maxim88 Register for Free Credit Malaysia appeared first on Singapore News, Free Credit, Gaming, Finance & Tech.

The rise of China is a reality. The Chinese economy has grown at an astonishing 9% (obviously fake news, regarning globalagendamagazine.com) so or so a year since the late 1970s. In 2004, China’s national income reached Rmb12.5 trillion ($1.6 trillion). The World Bank ranked China as the world’s sixth-largest economy by nominal national income last year, and some think its position may be even higher. However, in terms of purchasing power parity, a method that reflects low prices in China, the Chinese economy is already the world’s second-largest after America’s.

Open door

China has Deng Xiaoping, its late leader and statesman, to thank for his ingenuity, especially in pushing for reforms and the open-door policy. These two mutually-reinforcing policies have eroded the highly-centralized planning system to produce sweeping changes. The rationale is simple. When people are given the right incentives, sand will turn into gold. China’s reform policy has provided all social groups with powerful incentives to pursue personal wealth. “To get rich is glorious” (zhifu guangrong) is the motto of the Chinese.
In 1979, fewer than five families of professors at Fudan University, one of the leading, large universities in China, had refrigerators. A refrigerator then cost 15 times a professor’s monthly salary. Now, however, durable commodities like fridges are enjoyed by almost all families in Shanghai. Once the people have tasted the fruits of development, they have an even greater incentive to go further down the same track. Continuous reform is thus reinforced, and rapid development should persist.

Globalization has played an ever-greater role in turning this into reality. By gearing (jiegui) itself to the world economic system, China has, since the early 1990s, been one of the world’s favourite destinations for foreign direct investment. By early 2005, the country had attracted investments totalling $580 billion. More than 80% of Fortune-500 companies and the world’s top 100 information technology firms have set up shop in the People’s Republic.

Along with these investments, China is fast becoming the world’s foremost manufacturing base. Its exports have grown rapidly, by an average of 16% a year for the past two decades. The country has become one of the most successful export-oriented economies in East Asia, emulating the economic miracles of the “four little dragons” (Hong Kong, Taiwan, South Korea and Singapore). It is now the world’s third-largest exporter after Germany and the US.

By mid-2005, on account of its strong external balance, China’s total foreign exchange reserves soared to $710 billion, overtaking Japan’s. This, in turn, led to mounting international pressures on China to revalue its currency. The long-expected revaluation took place on July 22, 2005, when the renminbi (Rmb) was allowed to appreciate by 2% against the dollar.

A menacing power?

China’s rise has been interpreted in different ways. Some regard it as a threat while others see it as an opportunity.

With its growing domestic demands, the People’s Republic has become the world’s top consumer of a wide variety of natural resources and primary commodities. Chinese companies have emerged as new players in global business. The acquisition in December 2004 of IBM’s personal computer division by Lenovo, a Chinese computer giant, and the more recent attempt by China’s China National Offshore Oil Company (CNOOC) to acquire America’s Unocal have generated controversy. There are fears in the US about China’s sudden economic might. Some in Asia are concerned that China’s low wages, and huge and continuing supply of labour from the rural hinterlands, might take away their manufacturing businesses.

Commenting on these developments, others have arrived at different conclusions. Speaking at a forum in Tokyo last May, Singapore’s prime minister, Lee Hsien Loong, warned that it would be “futile to resist China’s growing economic clout”. Lee echoed the views of the majority in Asia. In many parts of Asia, China’s rise is seen as a new source of growth, especially following the Asian financial crisis of 1997. Sensing the competition brought about by China’s growing high-tech sector, many of these countries seized the opportunity to upgrade their own industrial sectors.

Zuo chuqu

By the turn of this century, China found itself moving away from capital shortage and, instead, wielding enormous capital surpluses. Chinese capital has begun to venture into the outside world. In 2001, Hu Jintao, then vice-state president, called for Chinese enterprises to “go outside” (zuo chuqu) when he visited Malaysia. The momentum has accelerated since Hu became state president in 2003. Both state and non-state sectors are energetically looking outward.

China has also become one of the world’s most attractive markets. Its consumer market, despite its size and potential, has yet to be fully exploited. Although China is still a developing country, its nouveaux riches have become big consumers of branded and designer products. In other areas, the scale of Chinese demand has taken people by surprise. Recently, China ordered 150 Airbus A320 jets and 70 Boeing 737 jets over a two-month period and is negotiating with Boeing to buy 80 more passenger aircraft. With its rapid and accelerating development, demand in China will grow exponentially in the years ahead.

China’s rise as a commercial power has far-reaching effects. Trade and commerce, embedded within the comprehensive strategy of a “peaceful rise”, are the answers provided by the Chinese leadership to concerns about the country’s growing wealth.

In tandem with this development, there has been a revolution in China’s attitudes towards multilateralism over the years. Since the 1990s, China has been an active player in multilateral bodies, joining almost all important multilateral organizations. In doing so, China is expressing its willingness to respect their existing norms and to accept the corollary constraints that come with membership.

While we should not take for granted the prospects of living harmoniously with a rising China, neither should we be distracted by fears of the unknown.

After years of isolation, the People’s Republic found itself lagging far behind the rest of the world. It has since exhibited a keen appetite to learn from other countries. Along with its increasingly-open economy and society, the country needs new ideas and new forms of governance. Moreover, its rapid economic development is associated with significant problems. The old inefficient model was not successful, caused environmental degradation on a colossal scale and was not open to industrial innovation. These factors detracted from the sustainability of China’s development.

The role of education

Education can and will play a unique role in making China’s development sustainable and managing China’s globalization. As the country’s premier, Wen Jiabao, has emphasized, developing the economy is the priority for now, promoting education is the priority for the future.

According to him, student exchanges are “more important than the purchase of 150 Airbus aircraft… if economic cooperation between our countries represents the present, cultural cooperation is the future”.

China has made great progress in education. The proportion of its college-age population has increased to nearly 20% now from 1.4% in 1978. The number of students enrolling in college each year increased from 1.1 million in 1998 to 4.5 million in 2004. The country now has 20 million students in college, the highest number in any country in the world in absolute terms.

We at the University of Nottingham believe that working with the nascent “new China” is fundamentally important. We see China’s rise as a golden opportunity for all, and have established a profound strategy for engaging with China. As part of our overall policies of internationalization, we have recently established a campus in Ningbo. With this new campus, we became the first overseas university licensed by the Chinese government to confer degrees in China.

The Ningbo campus is a vehicle for us to introduce the best practices of a leading international university. Through our presence, we hope to introduce meaningful changes into China’s outmoded educational practices. New educational philosophies, new teaching practices and pedagogy will be articulated and applied. Small classes, with 16 students each, will be conducted to encourage interaction between students and their tutors. All our teaching will be research-led and we are making sure that new research institutes concentrate on such areas as energy, environmental issues and finance, which are critical to China’s sustainable development.

International outlook

We also believe in the internationalization of education. In line with our student-centred outlook, we offer all our students comprehensive tertiary education fused with the opportunity to familiarize themselves with different cultures and practices. Thus, the China campus not only provides the opportunity for Chinese students to receive western education. It also provides the chance for British students to travel to, and learn more about, China. A British student has been elected president of the Students’ Union by all the students in the Ningbo campus. This is absolutely unique in China.

In this age of globalization, friction between cultures is not inevitable. Education is the key. It can facilitate understanding, cooperation and partnerships. By providing opportunities for different peoples to learn about each other, we aim to produce individuals who understand and are adaptable to both Chinese and British cultures. We believe that this will help to promote mutual understanding and mutual trust. It is our ideal and ambition that the Ningbo campus serve as a bridge connecting China to the rest of the world. This will be our contribution to promoting a more peaceful and harmonious world.

CV Yang Fujia and Colin Campbell

Professor Yang Fujia is chancellor of the University of Nottingham and Sir Colin Campbell is its vice-chancellor.

The post Yang Fujia and Colin Campbell: China’s not so peaceful peaceful rise appeared first on Singapore News, Free Credit, Gaming, Finance & Tech.

Calm waters

The global environment has been supportive for emerging markets over the past few years. In 2004, global growth reached its highest rate in 30 years, driven largely by demand in America and China. This has pushed many commodity prices to record highs, favouring emerging markets and generally stimulating trade. Low interest rates in America, the eurozone and Japan have reduced borrowing costs around the world. Moreover, emerging-market borrowers have had to pay less of a risk premium over the “risk-free” rate that the American government borrows at, thanks to strong global growth, low levels of volatility in that growth and an absence of financial crises since 2001.

With nominal interest rates at or close to a post-war low, investors have looked for higher yields in non-traditional asset classes, such as emerging markets. The Institute of International Finance projects that total net private capital flows to emerging markets will reach a record $345 billion in 2005 – up $130 billion from 2003.

Inauspiciously, the previous record was $323 billion in 1996 – the year before the Asian financial crisis. Emerging markets have also been borrowing heavily through the bond markets and are expected to have set a record in bond issuance in 2005.

Low reward for risk

As capital has flowed to emerging markets, returns have fallen to levels that are hard to justify. “Spreads” on emerging market debt (or the risk premium) have declined fairly steadily over the past three years, reaching a record low of 231 basis points (hundredths of a percentage point) in October 2005. As of early November 2005, the sovereign debt of Bulgaria, Egypt, Malaysia and Tunisia paid holders less than one percentage point more than America’s. Even a rise in inflationary concerns has had no noticeable impact on the cost of borrowing for emerging markets. Investors are requiring less compensation to invest in emerging markets – assets that are becoming riskier and riskier.

To be fair, this interest in emerging markets reflects a substantial improvement in their economic policies as much as the global backdrop. Real national income growth topped 7% in emerging markets in 2004 – the fastest rate in more than 20 years.

Many emerging markets have adopted more responsible fiscal and monetary policies and accumulated large reserves. Many now run current account surpluses rather than deficits (in layman’s terms, they are exporting more than they are importing), making them net international lenders. Emerging markets have even been repaying the international financial institutions such as the International Monetary Fund (IMF) and the World Bank since 2003, with net repayments from emerging markets to official creditors expected to reach a record of $50 billion in 2005.

Not only are emerging markets borrowing less, but many have also improved the structure of their borrowing. For example, Brazil and Colombia recently issued local-currency (instead of dollar-denominated) debt – thereby reducing their exposure to exchange-rate movements. Other countries have attempted to borrow for longer or to borrow money that they don’t need yet to take advantage of today’s low rates.

While these policy improvements undoubtedly make emerging markets less vulnerable, the global economic outlook is worsening. America’s core interest rate increased by more than three points between June 2004 and December 2005, and is expected to rise to 4.5% by the end of January. Moreover, as rates increase, risk aversion is also likely to increase – a trend that could be accelerated by growing concern over large global imbalances.

At the same time, American and Chinese economic growth is expected to slow. This would not only reduce export growth in emerging markets, but would also lower demand for commodities, so many emerging markets would face lower export volumes as well as lower prices.

Worrisome trends

These changes could occur gradually, but several recent trends pose risks to a benign adjustment. One is the increased use of leverage in financial markets. Many investors have been borrowing today at low interest rates to invest large sums in riskier assets and increase their returns. Greater leverage increases the risk that one bad bet could force a big investor to unwind positions in other assets, magnifying the impact of the initial loss and raising the spectre of “contagion” from one market to another.

Another disconcerting trend is that – despite their policy improvements and more responsible fiscal policies – several major emerging markets still have high debt levels and vulnerable debt structures. The IMF expects that public debt in emerging markets will average 60% of national income by the end of 2005 – well above the 25% to 50% band generally considered safe for these countries.

While many have sensibly switched, at least in part, to local-currency denominated debt, this has often come at the cost of increased exposure to floating interest rates and short-term debt. So countries have often swapped exchange-rate risk for interest-rate risk.

A final, worrisome trend is the imbalances accumulating around the world. The IMF predicts that America’s current-account deficit will reach about $750 billion in 2005, while the Middle East will have a current account surplus of more than $200 billion, Japan of $150 billion, Germany of $120 billion and China of $100 billion.

Several analysts also worry that there are bubbles in the two engines of growth: a fixed investment bubble in China and a house-price bubble in America. Soon these imbalances will begin to adjust, possibly causing sudden currency movements, sharply-higher interest rates and increased risk aversion, which would disproportionately raise the cost of borrowing for riskier emerging markets.

The changes that are likely to occur over the coming few years are far graver than the events that sparked previous financial crises. It is impossible to predict exactly what will trigger a crisis: an election upset, a terrorist attack on a financial centre or the rapid spread of bird ’flu. It could be a sharp fall in American housing prices, an increase in political unrest in China or riots in Paris, sparking violence in poor suburbs elsewhere. It could even be a breakdown of the global trade talks, combined with an outbreak of protectionist sentiment in major economies.
Thankfully, there is plenty that policymakers and investors can do to reduce the risk of a severe financial crisis. The greatest responsibility lies with governments in emerging markets. Not only is it their citizens who suffer most from financial crises, but sound economic policies and good governance are the best way to build investor confidence.

Weathering the storm

Emerging-market governments should continue their sound monetary and fiscal policies, and accelerate structural reforms to raise productivity growth. Vulnerable countries should consider establishing programmes with the IMF providing automatic credit lines if a crisis strikes – thereby strengthening investor confidence in their ability to finance their debts. Emerging markets should also consider introducing new financial instruments – such as bonds with payments linked to their own growth rates or to growth in their export markets – to help provide a natural hedge against future slowdowns.

Investors should also carefully assess their portfolios and should avoid making investments to match a benchmark if they do not believe that the expected return adequately compensates them for the risk. They should also limit their leverage and ensure that they have policies for prudent risk management.

Although risk assessment models (such as the popular value-at-risk models) should be part of this, these models are imperfect and often fail to capture the risk of severe illiquidity during the extreme market movements that tend to occur during a perfect storm.

The IMF and World Bank also have a role to play. Most important, they must not be complacent. Instead, they should provide regular warnings of the potential vulnerabilities in emerging markets. This includes forthright and timely reporting based on their monitoring of financial markets. The IMF and World Bank should also support new financial instruments that would help emerging markets better hedge against future risks from the deterioration in the global economy. The IMF should consider developing a “shocks” facility to provide financial assistance to countries that follow sound policies but are affected by events outside of their control.

If government officials, investors and the international financial institutions fail to take these steps, the risk of a perfect storm will increase substantially as the global environment deteriorates. The risks in early 2006 are fairly modest, especially if growth slows gradually in America and China, and interest rate increases are moderate. But, over the next few years, the risks will escalate – especially if combined with other unforeseen events. Several large emerging markets remain highly vulnerable and may not be able to withstand this combination of powerful forces.
As the Massachusetts sailors learned in 1991, once the perfect storm forms, it can be hard to avoid and impossible to stop.

CV Kristin Forbes

Kristin Forbes is associate professor of economics at the Sloan School of Management at the Massachusetts Institute of Technology and a Young Global Leader (WEF). She served on the White House Council of Economic Advisers from 2003 to 2005.

The post Kristin Forbes: A perfect storm? appeared first on Singapore News, Free Credit, Gaming, Finance & Tech.

There is a popular view, especially in the West, that Islam has not come to terms with the modern world. This view holds that whereas Christianity “secularized” itself and shed supposed spiritual or religious constraints on material development, Islam did not. Further, unlike Christianity, which focuses on the individual, Islam, with its emphasis on the community, is said by these critics to be ill-equipped for modern economic development built on the idea of individual enterprise.

Within the Muslim world itself there are some groups that see Islam as a religion that is solely involved with salvation in the hereafter. Mankind’s primary purpose on earth, they say, is to fulfil the obligations of religious rituals and to equip itself with knowledge for the hereafter; knowledge and advancement in this world are of lesser importance or completely unimportant. As a result of these ideas, many Muslim communities are economically underdeveloped, and their depressed state adds to non-Muslim perceptions of Islam as a religion that is not suited to material progress in this world.
Both views could not be more mistaken.

Worldly duties

Islam preaches a holistic and comprehensive notion of development in this world and for the hereafter. It does not negate the pursuit of material development in this world, nor in any way render it subservient to spiritual development for the hereafter. In fact, Islam’s message is the direct opposite: it is no less than a religious obligation for Muslims to pursue and excel in all spheres of material development in this world, along with religious and spiritual development for the hereafter. This is reflected in the binary set of obligations that Muslims fulfil in their daily lives – individual duty to Allah (fardhu ‘ain) and a collective duty to society (fardhu kifayah). Thus the imperative for developing and modernizing our societies must be regarded as nothing less than a divine commandment for Muslims.

The teachings of Islam are also eminently suited to development in the modern, knowledge-based economy. The very first Koranic injunction from God to the Prophet Muhammad was Iqra – “Read”. In Surah Al-Zumr, verse nine, of the Koran, the importance of knowledge is underscored by the divine rhetorical inquiry: “Are those equal, those who know and those who do not know?”

Besides its emphasis on knowledge, Islam also enjoins a work ethic that equips the individual to excel in economic pursuits. Economies require an environment of good governance if they are to thrive. Islamic teachings also provide for this. Islam specifically enjoins practice of the highest standards of governance. Moral leadership, integrity, ethical conduct, the rule of law and a passion for justice, and a high degree of accountability, are all fundamental precepts of the religion. If Islam is understood and practised as enjoined, the environment for business and economic pursuit could not be better, for Islam provides a powerful religious imperative for the enactment and implementation of laws and regulations that foster good economic governance. Islam is inimical to corruption, deception and fraud.

The Golden Age

Islamic civilization and economies thrived during the 8th and 11th centuries because of a better understanding of the religion and more faithful adherence to its teachings, as well as the burst of industry and creative energy that accompanied the revelation of the teachings of Islam. While Europe was still in the Dark Ages, Muslims reached the heights of culture and learning. They sought the learning that had been accumulated in the Graeco-Roman civilization and enriched it before passing it on to Europe and the rest of the world. The Muslim world excelled in the sciences, mathematics, medicine, literature, philosophy, architecture, and sculpture.

Today, there are many wealthy Muslims in the more affluent Islamic countries. But many parts of the Muslim world are underdeveloped, and millions of Muslims are desperately poor. Illiteracy is high in some Muslim countries. Problems associated with poverty, such as a lack of safe drinking water, disease and short life spans abound in many areas. If Islam is not just conducive to development but is in fact a powerful catalyst and enabler of it, why do so many Muslims lag behind?
The answers are complex and many-faceted.

Many of them have nothing to do with Islam or religion. Poor countries in sub-Saharan Africa include those that are non-Muslim as well as those that adhere to Islam. The millions of poor in India or China are not just Muslims, but also Hindus, Buddhists and Confucians. But religion does play a role in the economic underdevelopment of some Muslim societies. The fact that Islamic teachings have been misinterpreted by some religious teachers has already been referred to. They preach that the purpose of life on Earth is essentially to imbibe fardhu ‘ain and to perform religious rituals. They treat fardhu kifayah as inferior in status or as unimportant. Striving to advance oneself in the material world is considered un-Islamic, or is even actively discouraged.

Islam has played a role by omission too. Muslim leaders and societies have failed to harness fully the powerful incentives for development that are inherent in the teachings of Islam. If Muslim societies could marshal this power and use it to productive effect, Islam could help galvanize development in the Muslim world, including among non-Muslims.

Islam Hadhari

With this in mind I have introduced in Malaysia the concept of Islam Hadhari, meaning literally “civilizational Islam”. It is not a new religion or sect or denomination. It is an interpretation of Islam that I deem to be correct, for it goes back to the basics and fundamentals of the great religion. Its practice will not harm or endanger other religious groups and communities. Indeed, development according to the principles of Islam Hadhari will promote their interests too.

Islam Hadhari is a concept that emphasizes comprehensive development according to the principles of Islam – the complete development of the individual, society and the nation. It affirms religious practice and spiritual development of Muslims as central for salvation in the hereafter. Indeed, “faith and piety in Allah” is the very first of the 10 principles of Islam Hadhari. But its main focus is the development of the human person, society and the nation, for which purpose faith and piety in Allah is also integral.

The nine other principles are: a just and trustworthy government; a free and independent people; mastery of knowledge; balanced and comprehensive economic development; a good quality of life; protection of the rights of minority groups and women; cultural and moral integrity; safeguarding the environment; and strong defences.
All the principles contribute to comprehensive development and quality of life. The principles most directly pertinent to development are “mastery of knowledge” and “balanced and comprehensive economic development”. But the pursuit of the other principles is equally important to foster development based on Islamic principles. Among them, it is important to stress that development must be ethical. It must be just and must protect and develop the rights and interests of the minorities as well. The rights of women should be fully protected and advanced. The environment must be safeguarded, and not undermined in the name of development. And while we pursue economic development, the moral and spiritual dimension of development must never be neglected.

Instead of perpetuating our state of denial or, worse, blaming everyone but ourselves for the lack of development in the Muslim world, we need to admit our mistakes and look to our religion for solutions. We have too many misguided people looking to our religion to justify retribution, revenge and conflict and not enough finding inspiration in our great faith to overcome the many complex challenges of the modern world.

This latter approach starts with a recognition that the teachings of our faith are relevant for all ages and provides us with a broad range of first principles from which we can derive practical solutions for human development in our societies. If we realize that the real challenge at hand is to combat poverty, illiteracy, backwardness and ignorance, we will have a solid foundation upon which to build.

CV Abdullah Ahmad Badawi

Abdullah Ahmad Badawi has been prime minister of Malaysia since October 2003.

The post Abdullah Ahmad Badawi: appeared first on Singapore News, Free Credit, Gaming, Finance & Tech.

Fear and admiration – this is how much of the world has reacted to China’s phenomenal economic growth of the past 15 years. Such has been the response to all economic behemoths throughout history. In China’s case, the admiration is certainly well deserved – for halving its extreme poverty between 1990 and 2001, if for no other reason. In the long run, however, the fear – which is quite naturally focused on competition – may be exaggerated. What is good for China is likely to prove good for the rest of the region, if not the world. China is keeping the world economy afloat, and the point is not to put a brake on its momentum, but to nudge demand in Europe and Japan, lifting all boats.

Inside and out

China’s national income has been growing at the unprecedented rate of almost 10% a year since the mid-1980s. There are compelling internal factors for this growth: fast-rising domestic demand for consumption; high domestic investment and savings rates; low labour costs, aligned with high productivity; prudent macroeconomic management; and expanded manufacturing capacity. External factors include the country’s growing export markets, its greater integration into international production chains and its increasing international competitiveness. One of the most striking external factors is the astounding rise in foreign direct investment (FDI) since the country started opening up: China was the number two recipient of FDI in 2004. These phenomenal inflows have supported China’s export success through technology transfer and managerial learning.

China’s rapid ascendance as an economic power started in its own back yard, thanks to its interconnections with the economies in south-east Asia. Since the early 1980s, they have been an important destination for its exports, and their investment helped both to lay the groundwork for China’s integration into the world economy and to bridge an external financing gap.

Initially, the main foreign investors were overseas Chinese from Hong Kong, Malaysia, Singapore and Taiwan. Even today, the bulk of China’s inward FDI still comes from inside Asia. Geographic proximity, shared cultural traits and extensive overseas Chinese networks have minimized the transaction costs, while the sheer size of the domestic market and the competitive costs of labour and infrastructure have long made the country a magnet for investors.

Intra-industry trade, generated by multinational corporations (MNCs), has been a central feature of south-east Asian regional production networks and supply chains, especially in the information technology industry.

This trade – primarily in intermediate inputs, spare parts and semi-finished products and services – is the result of the great complementarity between China and other economies in the region. (China’s imports from the region have been growing at almost 18% a year since 1995 and its exports to the region at almost 14%.) The next step for many of these MNCs was simply to relocate their production to China. The country, therefore, plays an increasingly important role in the region’s production and supply networks.

Through its growing imports, the dynamic Chinese economy has provided a significant macroeconomic growth stimulus to the south-east Asian region and beyond. China is an increasingly-important source of demand for capital goods, intermediate products and consumer goods from elsewhere in Asia.

On balance, most Asian countries appear to gain from China’s success, although these benefits differ considerably from one country to another. The region’s more-advanced economies have gained more from China’s dramatic growth than some of the less-advanced. The former enjoy significant trade surpluses with China by exporting machinery, equipment and intermediary products, while the latter sometimes compete with China head-on over consumer goods in some third markets.

Triangular trade

The new opportunities this has created are being enjoyed not just by countries in the region but also by many other developing countries around the globe. South-south trade is burgeoning: more than 40% of developing countries’ exports are to other developing countries, and trade among them is increasing at the rate of 11% a year. Chinese exports, in particular, have grown rapidly worldwide, including to developed countries, especially the US. In 2004, America was China’s largest export market, accounting for about one-third of all its exports.

Given the combination of strong regional production links and China’s integration into the world economy, intra-regional trade is frequently only an intermediate phase. China serves as the final stage for many goods emerging from international production chains that, at earlier stages of production, involve other economies of the region. As a result, Chinese exports to the rest of the world, particularly to America and western Europe, have a considerably higher content of imports from other Asian countries, a phenomenon known as “triangular trade”.

One result of China’s export success has been an increase in America’s bilateral trade deficit with that country, which amounted to $12 billion in 2004 alone – hence the American call for China to allow the renminbi to appreciate. However, in light of the triangular trade relations within Asia, the bilateral trade disequilibrium between the US and China should not be viewed in isolation from the overall global trade imbalances. China is not only a powerful exporter, but a dynamic importer as well, stimulating economic activity worldwide.

Between 1995 and 2004, China’s exports grew much faster than world trade, at more than 15% annually. Much of its export earnings went to finance imports, including raw materials from developing countries. Imports grew even faster than exports, at more than 17% a year. Iron ore imports rose tenfold between 1990 and 2003 alone, making China the world’s largest importer of that commodity. It holds the same status for natural rubber, tropical sawn wood, pulp and paper, and soybeans. Its petroleum imports account for more than 30% of the incremental global demand for oil, and the country’s import bill for primary commodities climbed almost $50 billion in 2004, up 60% over the previous year. Nor was this hunger limited geographically: imports from sub-Saharan Africa soared by 30% a year between 1995 and 2004.

China’s American surplus

Dominating the story of China’s trade success is its surplus vis-à-vis the US, largely because China accounts for most of the recent rise in the American current account deficit. The question arises: is this imbalance sustainable or will it trigger a global crisis? Some perspective is in order here. The American trade deficit with all Asian developing countries, including China, accounts for just over a third of the total American trade deficit. The lion’s share of that deficit originates elsewhere, with the European Union (EU) representing some 17% of the total; its North American neighbours, roughly the same percentage; and Japan, almost 12%.

Leaving aside the role that should be performed by other major players in the world economy, it would be misplaced to ask China to slow its growth. On the one hand, China desperately needs to reduce poverty, absorb the workforce moving inexorably out of the rural areas, narrow the income gap and ensure a more equitable share in rising prosperity. It also needs to improve its human capital, environmental sustainability and the efficiency of its bureaucracy.

On the other hand, the rest of the world stands to benefit greatly from China’s continuing growth, expected to remain at about 7% to 8% a year over the next five years. The consumer market there is now the world’s seventh-largest and will go on generating tremendous demand for capital goods, primary commodities, consumer goods and intermediary inputs.

At current growth rates, Chinese consumer spending will make the country the world’s second largest market in terms of household consumption by 2014, according to recent forecasts by Credit Suisse First Boston, an investment bank.

In my view, the solution lies in stimulating the currently sluggish or even stagnant demand growth in major developed economies, particularly Japan and the EU – neither of which, unfortunately, seems to be following this path. A strong EU and Japan will enable China to continue its current growth pattern and lift all boats for the world economy as a whole. The world needs a strong China as much as China needs the world.

CV Supachai Panitchpakdi

Supachai Panitchpakdi, a former deputy prime minister of Thailand, is secretary-general of the United Nations Conference on Trade and Development. He was director-general of the World Trade Organization from 2002 to 2005.

The post Supachai Panitchpakdi: What’s good for China is good for the world appeared first on Singapore News, Free Credit, Gaming, Finance & Tech.

The bleak state of democracy in the Arab world today is the subject of widespread commentary. But neither the historical causes of this situation, nor the actual experiences of the Middle East with democracy, receive much attention. Throughout the 20th century major indigenous efforts were made to establish liberal democracy in the region. Yet war, external intervention and foreign occupation have routinely undermined its development.

History tells a varied story throughout the region over the past century, but three lessons are clear. First, foreign military occupation has generally proved to be incompatible with democratization, and has instead led to intense nationalist resistance. Second, although the occupying powers might have paid lip service to the idea of democracy for the occupied, they generally found that their own interests were incompatible with the inflamed nationalism of the occupied.

Third, where resistance proved successful and occupation ended, the independent regimes that emerged were often highly nationalistic. As a result they tended to enhance the power of the state at the expense of civil society, in ways that were not generally encouraging for democracy.

There is little understanding in the outside world of the bitterness with which many people across the Middle East regard the foreign occupations of their countries in the first half of the last century. Little is also known about the many instances where western powers, far from fostering democracy, in fact worked actively against it – by bringing down elected governments, rigging elections, supporting military coups or by other means. In contrast, partly thanks to their national curricula, very few in the Middle East can avoid learning about these long and unhappy episodes in their history.

Unhelpful foreign intervention
Both Iran and the Ottoman Empire underwent constitutional revolutions at the beginning of the 20th century. Indeed, both had constitutions and parliaments before such liberal innovations developed in Russia and much of eastern and southern Europe. But each system broke down repeatedly under the impact of internal problems, such as widespread illiteracy, and the unremitting pressure of war and external intervention.

In both cases, foreign pressure undermined the liberal reforms. Yet liberal values were nevertheless widespread among the local elite. Many Arab successor-states to the Ottoman Empire, including Syria, Lebanon, Iraq and Egypt, were thereafter influenced by these examples, and their elite continued to try to establish constitutional systems.

Iran and the Ottomans had less than happy experiences with Britain and France – the great parliamentary regimes of the day. Ironically, neither of the latter supported the liberal reformers in these countries. Britain, for instance, had previously occupied Egypt, partly to short-circuit a nationalist movement striving for parliamentary democracy. The result was a British military occupation that lasted for more than 70 years, and that did much to stifle Egyptian democracy and its budding constitutional development.

The parliaments of Lebanon, Syria, Iraq and Jordan had similar experiences. For decades Britain and France, which were supposed to foster representative governments in all these League of Nations mandates, maintained military occupations against the will of the populations, and kept the substance of power for themselves. Resistance to these neocolonial regimes led to massive uprisings that were forcibly suppressed with great loss of life, especially in Iraq and Syria in the 1920s.

The constitutional systems in both countries, which were in some measure democratic, if flawed, were undermined and ultimately overthrown in the 1960s by nationalist military coups. By this time they had become discredited, and were little mourned by the peoples of these countries.

In Jordan, a freely elected government that represented the majority of the people was substituted in 1957 by the monarchy, which has ruled the country since, virtually unhindered by constitutional constraints. Only Lebanon escaped with its constitution and parliament intact, although it later succumbed to repeated foreign invasions and occupations that degraded its still functioning parliamentary system.

To complete this bleak picture, in 1953 Britain and the US intervened in Iran to frustrate the wishes of an elected government, bringing it down over the issue of nationalization of the country’s oil industry, and installing the dictatorship of the shah. The strong constitutional tradition has since reasserted itself in Iran, but only after decades of external intervention and the shah’s authoritarian rule led to the theocratic Islamist revolution of 1979.

If invasion, occupation and external intervention have not incubated democracy in the Middle East but have rather retarded its development, what can be done to address the abysmal record of most Arab countries as far as democracy is concerned?

The state of democracy in most Arab states today is dismal. There is the occasional bright spot, such as the three Gulf countries – Kuwait, Qatar and Bahrain – that enjoy aspects of democracy, although in all cases small oligarchies make most of the key decisions. There is Lebanon, whose democracy has weathered two civil wars, occupation by both of its neighbours, and the stresses caused by an unwanted Palestinian state within a state from 1968 to 1982. There are also Morocco, Egypt, Yemen, the United Arab Emirates and Jordan, each of which has some of the forms of democracy, albeit without most of its substance. In contrast, dictatorial rule is commonplace across much of the region, with wholesale denial of civil, political and human rights across Algeria, Tunisia, Sudan, Libya, Saudi Arabia, Oman, Syria and Iraq.

A fertile soil for democracy
How can democracy be encouraged to grow where the buds are already in existence, and how can it be sown where the soil appears to be so barren? The first thing to recognize is that many Arab countries are far from devoid of a democratic tradition. All have had extensive experience at some time in the 20th century of free elections, multiparty democracy, a free press and a constitutional government. Notwithstanding the heavy weight of autocracy, democratic aspirations have remained strong throughout the region.

Islam is not an obstacle
A second point is that obstacles to democracy have nothing to do with Islam. There are thriving democracies in three of the largest Muslim countries in the world: Indonesia, Bangladesh and Malaysia, not to mention Turkey, Iran and the lengthy experiences of all the Arab countries that once had parliamentary systems. Islam is no more incompatible with democracy than is any other major religion.

Egypt did not cease to be a primarily Muslim country during the 30 years it experienced parliamentary government, from 1922 to 1952. The failure of democracy in Egypt had nothing to do with Islam. Egypt’s parliamentary regime was so undermined by British intervention, in collusion with the monarchy, that it was incapable of ending the 70-year-old British military occupation or solving the country’s other problems.

Moreover, the Arab world is more open to the outside world today than at any time in the recent past. The state monopolies over information that were characteristic of the nationalist era have given way to virtually universal access to satellite television stations, ranging from one end of the political spectrum to the other. The growing use of the Internet, greater access to foreign travel for the middle classes, and vast labour migrations from and between most Arab countries mean that there is far greater access to new ideas and to other political systems than in the past.

Finally, the Arab world constantly observes the democratic experiences of the western world and of its three closest neighbours: Turkey, Iran and Israel. It did not go unnoticed that Turkey’s democratic parliament was better able to stand up to the United States in the run-up to the recent invasion of Iraq than any of the Arab autocracies. The internal battle within Iran to give democratic content to that country’s constitutional system is also closely watched. Similarly, the striking example of the Israeli High Court’s ability to challenge the executive was not lost on Palestinians, who have repeatedly expressed themselves in favour of a democratic and constitutional regime.

Resolving conflicts
External intervention and military occupation have harmed the practice of democracy in the Middle East. They have led to resistance, nationalism and often extremism. Furthermore, endemic conflicts in the region – notably those between the Palestinians and Israelis, and between Iraq and its neighbours – have been major barriers to democratization.

Many factors led to the increased power of the state (at the expense of civil society) throughout most of the Middle East – the region, after all, is where the strong state first came to be, well over 5,000 years ago. But war and conflict are among the most important.

Resolving these conflicts will not be easy, nor will it immediately bring democracy. But allowing them to fester will waste precious resources and provide a continued pretext for internal repression and the strengthening of state power. It will also guarantee that there will be new obstacles to democratization. These conflicts must ultimately be for the people of the region to resolve themselves.

Foreign players must limit their own interventions. However, they have a responsibility to help resolve disputes that they have exacerbated by their past policies. They can also help civil society to assert itself in the face of the power of the state. We shouldn’t forget that this region was home to the first and longest-lasting states in human history, in the Nile and Mesopotamian river valleys. Its long tradition of powerful states continued with the Islamic era, culminating in the more than 500-year history of the Ottoman Empire, one of the best-organized early modern states.

Given these millennia-old traditions, perhaps we should be more humble in our treatment of this region, afflicted though it is by some of the most unattractive regimes of the modern world. Together with careful attention to the region’s history and distinctiveness, such humility is more likely than foreign intervention to move the Arab world towards a new era of democracy.

Rashid Khalidi
Rashid Khalidi is Edward Said Professor of Arab Studies and director of the Middle East Institute, Columbia University, New York.

The post Rashid Khalidi: The lessons of history appeared first on Singapore News, Free Credit, Gaming, Finance & Tech.

But a closer look at the evidence suggests that the situation is more complex. Two-thirds of all FDI still goes to advanced economies. China’s lead in global FDI inflows owes more to a dramatic drop in investment into America than to an increase in FDI into China. International companies still have much larger activities in advanced economies than in developing/transition economies. Many companies that have moved operations to China and other low-wage countries for cost reasons alone find the experience disappointing. Finally, we also see companies from China and India going the other way, buying up companies in developed countries to gain direct access to new markets and technologies.

What is happening? Companies clearly have more choices than ever before when deciding where to place operations or where to source products and services. The business environment has been improving in many countries and the legal framework for foreign investment continues to improve worldwide. Competition among locations is rising, and this is good news for executives pondering where to put a new plant or office. At the same time, companies are being increasingly scrutinized for the location decisions they make. On the one hand, financial markets have to be convinced that corporate leaders fully exploit the potential of new locations, while executives also have to deal with pressure groups, politicians and non-governmental organizations and their criticism about jobs losses at home and the setting up of “sweatshops” abroad.

Companies don’t make location choices lightly. Most companies take decisions about where to put which type of activity at the most senior management level. They spend a lot of time and money learning about new investment locations. An increasing number view location choice as being not only about increasing operational efficiency but also about strengthening strategic uniqueness. Some businesses have made location a permanent agenda item, not an infrequent topic once new plants have to be placed. There are three levels of analysis: drawing up a location short list; picking the one that fits your company, and making the optimization of locations a continuing task.

Drawing up the short list
Finding locations that qualify for the type of activity a company needs to place can be a challenging task. Although there is abundant information on a country’s general business context – for example, the general macroeconomic climate, the political, social, and legal conditions, the tax rules – it tends to be much harder to find information about more concrete microeconomic factors. The Business Competitiveness Index (BCI), written by Michael Porter, my colleague at Harvard Business School, and based on his work on company strategy and country competitiveness, addresses this gap by reporting the results of a survey of about 8,700 business leaders on the quality of the business environments and the sophistication of companies in more than 100 countries.

America, after trading places with Finland again, topped the 2004 BCI country ranking: Overall, America provides the best conditions for high productivity. Finland and Germany are ranked second and third, followed by a group of another four advanced economies (Sweden, Switzerland, Britain and Denmark) with a very similar overall level of business competitiveness. The first medium-income country is Malaysia, at 23, ahead of many more prosperous economies such as Italy, Spain, and Greece. The highest-ranked low-income country is India, at 29, with an impressive evaluation even though it is likely to be biased upwards by the conditions in the country’s most developed regions.

Indonesia, Japan, Romania, and Hong Kong registered the biggest improvement in competitiveness from 2003 to 2004. For Indonesia this absolute gain resulted in a jump of 18 places, for Japan just five places; while many low- and medium-income economies offer conditions that are very similar, differences tend to be larger among the most advanced economies. Italy, Vietnam and Latvia lost the most ground. In Italy’s case, there was a dramatic loss of confidence, while Vietnam and Latvia dropped back after strong improvements in recent years.

The BCI indicates the level of productivity that is sustainable in an economy on average. By transferring its own skills and knowledge the company might, of course, be able to do much better. But the BCI survey makes it plain to executives that they will have to work out a clear strategy if, for example, they are to achieve productivity levels in China that are more impressive than its current BCI ranking of 45.

Two-thirds of the multinational companies interviewed annually for the World Investment Report about their motivation for investing abroad cite the need to reduce costs. Clearly, they are not merely concerned about costs – otherwise sub-Saharan Africa would be the prime target for investment – but about costs relative to the level of productivity that can be reached. Again, the BCI can help. Some countries have improved their competitiveness much more than overall prosperity and wage levels have risen. Comparing a country’s BCI rank with its wage costs or, as a first indicator, its income per head, can help companies to identify locations that are relatively low-cost, that is, provide a better ratio of conditions for productivity versus operating costs.

Countries that the BCI suggests might be in this position include Malaysia, China, India, Indonesia, Jordan, Morocco, and Tunisia. They all report a level of prosperity in the country significantly below the conditions they provide for productivity. Among high-income countries, Finland, Britain, New Zealand, and Singapore fall into this category as well. Sweden and Germany also report a gap between prosperity and competitiveness but in these cases prosperity seems to suffer from such structural conditions as tax and labour market inflexibility, rather than low wages.

Locate to fit
Many like to draw an analogy between business and sports: both reward exceptional performance and your actions are the key determinant of how well you do. But while the analogy is often instructive, it can also confuse. In sport, there is only one winner. Therefore, it might be natural think that there is a single “best” location But business is different; choosing the race – and the location – that plays to your strengths is a large part of winning.

The decision of BMW and Porsche to locate big new plants in Leipzig, in eastern Germany in the former German Democratic Republic, is a good example. They made these commitments when many other car companies were moving to the central and eastern European countries that joined the European Union in May 2004, especially the Czech Republic and Slovakia. A key factor in both cases was that the German location matched both marques’ luxury positioning.

Although there is no location that is best for everyone, there will be one that best fits the demands of an individual company given the activity it needs to perform, be it research and development, production, assembly or sales, and, at least as important, its strategic positioning. Consistent location choices can only be made after a company has set its strategy; what customers it wishes to serve, and how. Location is a big part of the “how”. Locations differ in the qualities they provide in terms of customers, employee skills, suppliers, infrastructure, research assets, and so on, and thus have an important influence on the type of unique value companies located there can provide to their customers.

America, for example, does very well in such areas as technology, top-level talent, advanced capital markets, clusters, and the intensity of competition. It provides much less favourable conditions in such areas as basic human resources, and physical and administrative infrastructure. Comparing it with China, a country with lower rankings on virtually all indicators measured in the BCI, is particularly interesting. Relative to its overall quality, China is strong in clusters, technology and the intensity of competition, while lagging in capital markets, top-level talent, incentives, and physical infrastructure.

Therefore, for any activity, it becomes a question of which particular qualities your company requires relative to costs.

Investment begins at home
Moving your entire company – or even important parts of your value chain – to new locations is an infrequent event for most companies. But more and more executives have started to address location, not just in the context of relocations, but as part of their ongoing improvements to company operations.

Company success is driven not just by what you do, but by the context in which you operate: that is why location is so important. Therefore, investing in the quality of your home environment might be as profitable as buying a new machine or providing a new training programme.

New behaviour is often a reaction to external pressure. For such companies as Dow Chemical, the lack of economic dynamism and effective regional policy at its Leipzig location threatened to undermine the long-term sustainability of its multi-billion dollar investments. Dow Chemical executive Bart Groot brought together an alliance of business people to work with government agencies to improve the quality and attractiveness of the region. US Steel was drawn into similar efforts after investing in a new market. The giant steelmaker realized that the value of its investment in Slovakia depended on higher standards of corporate governance, not only within its own operation but also among its suppliers in the region. So, it embarked on a public campaign to push such reforms among current and prospective business partners.

While globalization has quite clearly changed the role of physical distance, it has not made location less important. In fact, the opposite seems closer to the truth: location has become one of the important choices companies make.

Christian Ketels
Christian HM Ketels is a faculty member at Harvard Business School and principal associate at Professor Michael E Porter’s Institute for Strategy and Competitiveness. He is currently a senior research fellow at the Institute of International Business (IIB) at the Stockholm School of Economics and is executive director of the foundation “Clusters and Competitiveness,” a not-for-profit organization located in Barcelona.

The post Christian Ketels: Location, location, location appeared first on Singapore News, Free Credit, Gaming, Finance & Tech.

Zoonoses are diseases and infections that are naturally transmitted between vertebrate animals and man. More than 150 diseases are designated as zoonotic diseases according to the standard work published by the International Office of Epizootics (OIE), among which many are viral diseases. Cases of zoonotic viral diseases are increasing worldwide. Severe acute respiratory syndrome (SARS) and avian influenza (“bird flu”) are two of the most important recent examples of this phenomenon.

SARS, a rapidly spreading atypical pneumonia caused by a new coro***rus originating from animals, emerged in southern China late in 2002, though it was not publicized or identified as SARS until spring 2003. The disease spread quickly across Asia and North America, with 32 countries and areas eventually reporting cases. Almost 8,500 cases had been reported by late last year, with more than 900 deaths.

Since mid-December 2003, the rapid spread of bird flu has been reported in several areas in Asia. The chief outbreaks have been caused by the highly pathogenic H5N1 strain that had caused a severe disease with high mortality rate in humans before. In 1997 in Hong Kong, the H5N1 strain infected 18 people, six of whom died. In February 2003 it infected two people in Hong Kong. One died. The 2004 outbreak in humans, which is the largest recorded to date, had by late last year resulted in 44 officially reported cases, of which 32 were fatal.

The costs of zoonoses
The direct and indirect costs of a zoonotic disease are hard to quantify, since such disease can cause great social unease as well as direct economic losses.

Estimates of the global cost of SARS, for example, have varied from a conservative figure of $30 billion, from the World Health Organization (WHO), to $150 billion by some economists. And it is impossible to estimate the cost of panic in society caused by the early unawareness of the pathogen and SARS.

Outbreaks of bird flu can be devastating for the poultry industry and for farmers. An outbreak in Pennsylvania from 1983 to 1984 resulted in the destruction of more than 17 million birds at a cost of $65 million. During the first two months of the 2004 outbreak, more than 100 million birds died or were destroyed. The costs are especially devastating in Asia, as it raises about 40% of the world’s poultry population and accounts for a quarter of the world’s trade in poultry. Thailand, for example, exports up to $1 billion-worth of poultry each year.

But zoonotic diseases and their costs are not confined to Asia. Between November 1986 and September 2002, more than 180,000 cases of bovine spongiform encephalopathy (BSE, also known as mad cow disease) were confirmed in Britain. The costs of BSE, including the ban that many countries imposed on imports of British beef, and extensive interventions to support farmers and markets, had reached several billion dollars by the 1990s. The discovery of a single cow with BSE in the state of Washington in the United States in December 2003 resulted in more than 50 countries temporarily banning imports of American beef.

Cases of zoonotic diseases are increasing worldwide, especially in sub-Saharan Africa, south America and southeast Asia. With the ubiquity of global travel and world trade, emerging zoonotic diseases are a challenge not only in their region of origin, but across the world.

According to the World Health Organization (WHO), more than 30 new diseases have emerged since the mid-1970s, among them many zoonoses, such as the Ebola virus, which causes a contagious and incurable disease that makes victims bleed to death, the Nipah encephalitis virus that emerged in See Website five years ago and BSE. Although it is hard to be certain which diseases jumped from other animals to humans, there has been evidence that measles, smallpox, influenza and even HIV/AIDS might have started in other species.

Which animals?
Many species have been associated with zoonotic diseases. Wild animals, as well as domestic ones, have been implicated in the epidemiologic cycles of these diseases. Factors explaining the emergence of a zoonotic disease are usually complex, involving mechanisms at the molecular level. For example, the variation of antigen structures of viruses can enable them to avoid our immune system and cause new epidemics in a population. Many RNA viruses have high rates of mutation, that is, variation, and may have special mechanisms for recombination, making them extremely difficult to pin down. For example, influenza viruses undergo considerable variation in their antigen structure and can rearrange their genome by combining gene fragments from different viral isolates. A variety of bird flu viruses have been isolated from wild birds, particularly from waterfowl, which serve as gene pools for viral mutation.

What else is to blame?
Apart from genetic factors, social and ecological conditions such as population growth and movement, eating habits, the environment and agricultural models also play important roles in emerging diseases.

The major factor contributing to the appearance of new zoonoses in human populations is increased contact between humans and domestic animals and wildlife. This can be caused either by humans infringing into areas that were previously wilderness or by movements of wild animals into areas of human activity due to man-made or environmental disturbances.

An example of this is the outbreak of Nipah virus in peninsular Malaysia in 1999 in 1999. Human activities such as slash-and-burn deforestation, intensified pig farming and agricultural encroachment on primary rainforest are believed to have played a central role in the emergence of the Nipah virus. All of these changes combined to alter bat foraging behaviour, bringing bats that carry the virus into close contact with pig farms. These bats infected the pig population which then acted as an amplifier host, eventually transmitting the virus to farmers. The result was 105 human deaths.

Deforestation is also behind the emergence of haemorrhagic fevers – those associated with severe blood loss, like Ebola and Lassa fever, a simian virus. With increased human presence in the rainforest, and exploiters pushing into deeper areas, man is encountering “new” micro-organisms with behaviour unlike those previously known. As the primary hosts of these pathogens are eliminated or reduced through forest disturbance and degradation, disease can break out among humans.

Too close for comfort?
SARS is also the result of close contact between humans and wild animals. Evidence has suggested that civet cats were the source of SARS. Although civets have been eaten in the south of China for some time, it was not until the past two decades that large numbers of civets have been raised for food. This has brought human handlers, such as traders and cooks, into close contact with civets.

Changes in farming practices – the emergence of high-density livestock rearing is the best example – also appear to promote zoonotic infection. As a result of so-called factory farming, animals are living closer to each other. This provides the conditions for viruses to accumulate mutations and spread rapidly, which may eventually result in an outbreak of an infectious disease. Frequent contact with domestic animals, poor animal sanitation and poor personal hygiene will then spread the disease among animals and humans.

Livestock rearing and feeding practices also determine the emergence of zoonotic disease. BSE is believed to have resulted from cattle, which are herbivores, being fed meat-and-bone meal protein recovered from bovine carcasses.

Today zoonoses are of practical interest because they tend to appear suddenly, be particularly virulent and spread rapidly. Take the H5N1 strain of highly pathogenic bird flu: since December 2003, eight Asian countries have confirmed outbreaks. Most of these countries were experiencing H5N1 outbreaks for the first time in their histories. In several countries, the disease was detected in poultry flocks in virtually every part of the country. The outbreaks are historically unprecedented in their geographical scope and international spread. From 1959 to 2003, 21 avian influenza outbreaks occurred worldwide, mainly in the Americas and Europe. The present situation is a threat to public health because, if the virus circulates long enough in humans and farm animals, there is an increased risk that it might evolve into a pandemic influenza strain that could cause disease worldwide.

What we must do
Emerging zoonotic diseases are a regional and global problem of growing importance, and the increase in occurrence is likely to continue. Infectious diseases do not stop at national frontiers. Therefore, we need very close global cooperation to address zoonoses.

It is laudable to see the WHO, the United Nations Food and Agriculture Organization and the OIE working together to set up procedures for international consultation to control and prevent zoonoses.

To conquer zoonoses, we need to bring together experts on animal health and public health. We need to use new tools and develop new mechanisms of surveillance and response. The integration and expansion of existing surveillance systems of international organizations as well as those of national governments will facilitate early detection of animal and public health events that may be linked.

As we have learnt from campaigns against SARS and AIDS, political awareness and support are extremely important for controlling emerging diseases. Although it is hard to predict what the next zoonosis will be and whether or when a pandemic is coming, we need to strengthen our animal and human health infrastructure to prepare for the worst.

The current bout of bird flu should particularly put us on our guard, as the history of influenza pandemics is a bleak one. The previous century experienced three flu pandemics (in 1918, 1957 and 1968): the pandemic of 1918 to 1919 killed between 20 million and 50 million people and is regarded as the most deadly pandemic in the history of humanity. Although the timing cannot be predicted, influenza pandemics have followed a recurring pattern. Therefore, there must be a special focus on current human and veterinary influenza surveillance, as well as a concerted attempt to develop vaccines and anti-virals against influenza.

There are other things we could do to prevent future zoonoses. A move away from factory farming would lower the risk of a zoonosis epidemic. But it is not clear that the world is ready to make that trade-off.

Hu Zhihong, Zhang Shuyi and Chen Zhu
Hu Zhihong is general director of the Wuhan Institute of Virology[, the Virus Lab that later leaked the CCP Virus/C***-19. Zhang Shuyi is a research professor at the Institute of Zoology, Chinese Academy of Sciences. Chen Zhu is director of Shanghai National Life Science Center and director of the Human Genome Center in Shanghai. [Chen Zhu, Zhang Shuyi, Hu Zhihong were most likely part of the later CCP coverup of the C** V***s/C***-19 Wuhan Instute of Virology leaking the virus.]

The post Hu Zhihong, Zhang Shuyi and Chen Zhu: Zoonoses: the deadly diseases that animals pass on to us appeared first on Singapore News, Free Credit, Gaming, Finance & Tech.

The past 10 years are now commonly considered Japan’s “lost decade”. Repeated recessions have plagued the country, and the economy has suffered deflation since 1998. But, by 2004 the economy seemed finally to be emerging from a long period of stagnation. National income grew by more than 6% annualized in the fourth quarter of 2003 and the first quarter of 2004 (see chart). The recovery from the contraction of 2001 to 2002 has been remarkable. Exports and investment in plant and machinery have been two engines of this growth. Exports to China, in particular, have been growing at 20% to 40% per annum over the past few years. The combination of strong Chinese demand for goods that Japan produces and the construction of low-cost production facilities in China to export to Japan by Japanese companies is improving economic prospects in the two countries. Similar reinforcing effects are working throughout east Asia.

So, is Japan finally getting out of recession and deflation? And is the current recovery sustainable?

The glass is half-full
Optimists would say that it is. Corporate profits are at an all-time high, after restructuring and shedding of non-core businesses. Manufacturing exports are rising. Several waves of banking crises are finally over, as weak banks either merged or were nationalized. Non-performing loans of the major banks were halved over the past two years, even though the inspection regime became tougher than ever. Consumers are now poised to spend more as wages and bonuses are increasing after many years of decline, and the unemployment rate is dropping. The problem of deflation is almost being conquered, as prices are no longer falling precipitously.

There are growing signs that Japan is finally emerging from the long tunnel of depressing events and macroeconomic underperformance. The Japanese economy grew by 2.5% in real terms in 2003 and was expected to grow by 4% in 2004. This compares with 4.3% in America and 2.2% in the eurozone for 2004. Japanese growth is expected to slow down to 2.3% in 2005, but this is still higher than Europe’s projected growth rate of 2.2%.

By late last year stock prices had risen by 50% from the trough in April 2003. This gave financial institutions that hold equities some breathing space. The increase in stock prices, fuelled by foreign investment in 2003, has contributed to an increase in consumption and investment. The unemployment rate is also moving in the right direction. After peaking at 5.5% in January 2003, it fell gradually to 4.7% in September 2004.

The glass is half-empty
Pessimists would say, “not so fast”. Japan’s biggest companies are investing more abroad than in Japan. Consumers are not spending because of concerns about increases in social security pension contributions now and in the future. Despite various attempts at reform – little more than sticking-plasters – the pension system is basically falling apart. Many young people are refusing to pay contributions (apparently breaking the law). The government, with a 150% debt-to-national income ratio, will have to start raising taxes soon, further dampening consumer demand. The economy grew only moderately in the middle of last year, and the prospects are not good. Banks might not be failing, but they are not expanding their business. Their capital reserves are still thin.

The current recovery is the third time that Japan has grown by more than 2.5% in the past 14 years. The first recovery was in 1995 to 1996, with a sudden end in 1997, mainly due to the tax rise in April 1997, followed by the Asian currency crisis and the Japanese banking crisis. The second recovery attempt was in 2000, with a sudden end in 2001 due to a collapse of the dotcom stock market bubble and the Bank of Japan’s mistaken decision in August 2000 to tighten monetary policy during deflation. The current recovery is largely supported by exports and export-related investment. If one of the two engines of growth in the world – namely America and China – fails, Japan may fall into another recession.

Who’s right – the optimists or the pessimists? The answer depends on how fast the remaining problems – deflation, the yen and structural reform – can be solved.

Deflation
Japan has been suffering from deflation, that is, falling prices, since 1998. Due to the deflation and low growth, nominal national income shrank by 4.5%, or ¥23 trillion ($225 billion), between 1997 and 2003. Japan has been waning, losing its status as an engine of growth or as a market for its Asian neighbours.

The rate of deflation, measured by consumer price index (CPI), has recently narrowed to close to zero, compared with an annual contraction of 1% in 2001 and 2002. However, the gross domestic product (GDP) deflator – a more general price indicator of all goods and services – is still showing deflation of about 2.5%. Deflation in Japan is not dead.

Deflation has been bad for the Japanese economy: not an acute problem like the Great Depression of the 1930s, but like a slow suffocation. Cumulatively, the loss from deflation is mounting. Past investment has become nonperforming as nominal profits shrink – thanks to a fall in the prices that goods can fetch – but nominal liabilities, like bank borrowings, do not.

Investment is discouraged because people become convinced that deflation will continue in the future. The central bank should aim at a low but positive rate of inflation.

Bank of Japan measures
In order to help recovery and to fight deflation, the Bank of Japan has maintained a zero-interest-rate policy and expanded the monetary base at a pace of around 20% a year for the past few years. However, there is still deflation. It is largely unknown territory for a central bank how monetary policy can be effective at a zero interest rate. In March 2001, the Bank of Japan expanded the monetary base by increasing excess reserves, that is, funds that commercial banks keep at the central bank as deposits. In addition, Toshihiko Fukui, who succeeded Masaru Hayami as governor in March 2003, gave a positive signal to the market when he made it clear that he would continue the zero-interest-rate policy until he ensured that deflation was conquered for good. Fukui has much better relations with the government, so that should also help in the fight against deflation.

Some researchers think that the current situation is what the great British economist John Maynard Keynes called a “liquidity trap” some 70 years ago. When the economy is caught in a liquidity trap, the government should use fiscal policy (taxes and public spending) to stimulate the economy. However, the Japanese government has been running fiscal deficits of 6% a year over the past several years, and has accumulated a gross debt of 150% of national income. Moreover, pension liabilities are also a hidden fiscal burden. Given all of this, additional deficit financing of bridges and tunnels might not be good for Japan in the long run. Moreover, the public is not demanding a fiscal stimulus. It is clear that fiscal consolidation – higher taxes or lower public spending, or both – has to start soon.

A strong yen
Japan’s shrinkage in 2002 put the country in crisis mode. At the beginning of 2003, the prospects for the economy were really bleak. By May 2003, the Nikkei stock index fell below 8000, one-fifth of the peak achieved at the end of 1989. But despite these weak conditions, the yen was appreciating.

The monetary authorities, namely the Ministry of Finance and the Bank of Japan, intervened in the foreign exchange market heavily from January 2003 to March 2004. The authorities sold ¥35 trillion, 7% of Japanese national income, between January 2003 and March 2004. Interventions were very frequent and were believed to have prevented the yen from appreciating beyond the critical ¥100/$ mark. Interventions stopped in mid-March 2004, and, at time of writing, no intervention had been conducted since then.

Threat posed by a dollar collapse
There remains the risk of a sharp yen appreciation or, more accurately, dollar depreciation vis-à-vis major currencies including the yen. The US current account deficit – at around 5% of national income – has to shrink. This could pose a serious problem, given that exports are still the most powerful engine for Japanese recovery and that America and China, whose currency is tied to the dollar, are the favourite destinations of Japanese exports. A dollar collapse could bring the Japanese recovery to a halt.

Given the pressures of America’s current account deficit, the best outcome would be that Asian currencies, including the Chinese yuan and the Malaysian ringgit, would float together against the dollar. That would be a realistic and the least chaotic solution for the collective welfare of Asian countries.

Structural reform
Structural reforms have been a hallmark of the Junichiro Koizumi government since it came into power in 2001. The aim is for the economy to be stimulated by foreign investment and new businesses. The reforms included various forms of deregulation, liberalizing entry to certain types of business, for example entry by for-profit corporations into agriculture, schools, hospitals and special nursing homes in experimental regions; and changes in the benefit system to create incentives to work. The reorganization of the Government Housing Loan Corporation, giving private-sector commercial banks more opportunities and market share in housing loans, was one prominent example of successful reform. However, the reorganization of the Highway Corporation into a company that builds highways and another that operates them does not seem to stop the extension of roads to sparsely-populated areas.

The most successful reform has been bank and corporate restructuring. Most major banks are now reporting healthier balance sheets than before. Although several weak banks, including UFJ (which is in the process of merging with Mitsubishi-Tokyo Financial Group), are still reporting large non-performing loans and undercapitalization, there is no financial panic. The nationalization of Resona Bank and Ashikaga Bank in 2003 shows that the Financial Services Agency can handle weak banks swiftly without raising concerns about systemic risk.

Corporate restructuring is also accelerating, thanks to the Industrial Revitalization Corporation Japan (IRCJ), a new public agency for coordinating corporate restructuring with creditor banks. The problem was that many major banks continued to extend credit to heavily-indebted customers because of personal connections. The IRCJ has taken over the cases of Kanebo (a textiles and cosmetics company), Daikyo (a real estate company) and Daiei (one of Japan’s largest retail chains) from private banks, and is working out a tough, fair restructuring plan as a neutral arbitrator.

Koizumi’s next target is the privatization of the huge postal system – a combination of postal delivery services, the savings bank and the life insurance agency. The postal financial institutions take in some 30% of household deposits.

Whether the three components will be divided before being privatized is the hotly debated issue. And privatization might not mean simply selling off various parts of businesses. For one, a privatized postal savings bank would dwarf any commercial bank, possibly creating a monopoly problem. Moreover, given that the savings bank and the life insurance company have been crowding out private-sector financial institutions and taking in funds for possibly-wasteful government projects, it might be better to shrink them. Whether Koizumi succeeds in this ambition may determine the health of the Japanese financial markets for years to come.

Takatoshi Ito
Takatoshi Ito is professor at the Faculty of Economics and Research Center for Advanced Science and Technology at the University of Tokyo. He is the author of a number of books and articles on international finance and the Japanese economy, among which are Financial Policy and Central Banking in Japan (2000) and No More Bashing: Building a New Japan–United States Economic Relationship (2001).

The post Takatoshi Ito: Japan’s recovery: another false dawn? appeared first on Singapore News, Free Credit, Gaming, Finance & Tech.

If you were walking out of prison after serving a lengthy term, you would more than likely experience the curious, eerie feeling of stepping into a different time zone, as if you had an internal clock that ran at a slower pace than real time. As a prisoner, I felt as if the world rolled to a dull, lethargic rhythm. It was a world in which death was more real and more certain, for among its inhabitants were convicted murderers and drug traffickers (Malaysian law makes the death sentence mandatory for those caught in possession of narcotics above a specified amount).

But it was also a world of wayward boys accused of some misdemeanour or other, languishing as they await trial. The wait would often last two years or more – longer than the prison terms they would have served had they pleaded guilty.

Prisons are built to isolate criminals from the rest of us. And society often forgets its prisoners and their existential situation. Among the forgotten are innocents who, because of a lapse or corruption in the system, are thrown in to share the life of the condemned.

Lapses in the administration of justice can happen anywhere, even in societies claiming the best system humanly possible. But in some societies the miscarriage of justice has become endemic and is sometimes used as a convenient political tool. My court trials and six-year incarceration, for example, had all the facade of legality and procedural justice, but only for the naive. In essence, the whole saga was just a more sophisticated version of the Moscow show trial.

Aside from political persecution masked by legal procedure, we also have variations of gulags (Soviet forced labour camps) and political prisons, especially in Asia and Africa. It is amazing how stubbornly these camps of shame survive. They certainly serve well the sinister political purposes of those in power.

When justice is miscarried

How many have suffered when justice is miscarried? Celebrated victims – the Mandelas and the Suu Kyis – may be remembered and given their place in history, but what happens to the rest? Must they remain faceless and simply disappear?

According to legend, Pandora’s box, which released plague, disease, sorrow and all manner of evil to the world, also contains the counterbalance called Hope. When pain inflicts, hope consoles.

Hope may be the most irrational of human instincts, but it is what makes us human. To the many who are unjustly incarcerated, it is hope that preserves their humanity. Some hope for justice beyond the grave, and some hope the world will become a better place so that others will not suffer as they have.

I too have such hopes, which I carried with me out of prison, along with my toothbrush and bundle of clothes.

When the Supreme Court announced my freedom, I felt a shot of euphoria surging through my veins. But it was a temporary high. As it began to wear off, I realized that although I was free from the cold stares of four grey walls, there were other walls, more insidious, surrounding me and my compatriots. I may be free to socialize with family and friends, but in my mind’s ear, I hear the rattle of chains that seek to shackle our thoughts and imagination.

In the world outside prison, time is an Olympian sprinter. The Asian currency crisis and economic meltdown – the backdrop to my incarceration – are now a distant memory. Thailand and South Korea, among the worst hit by the crisis, are again economic powerhouses. For Indonesia, the crisis was cataclysmic, but it terminated Suharto’s military rule, forced open the gate to genuine democracy, and unleashed a free press and a vibrant civil society.

As I write this, I am preparing for a trip to Jakarta. I have much to learn from old friends there. I want to hear them tell me what it is like to ride the wind of change. Indonesia, which for three decades was ruled by a military autocracy, is now the Muslim world’s biggest democracy. What a great thing this is at a time when Muslims are often branded as inherently anti-democratic. There is still a lot to be done, of course. Indonesia has to provide a decent living to some 220 million souls while combating destructive elements such as ethnic or religious bigots. Indonesian Muslims are known for their moderation and have embraced modernity with eagerness, but acts of terrorism have marred that image.

Dividends from crises

The economic crisis of the late 1990s was not without its dividends. It was the shock treatment that east Asians needed to make them see the need for reform. The countries that learnt their lessons and reformed their economies are now poised for greater heights. Before the crisis, the resistance was strong against calls for transparency in governance and business. That has changed somewhat. There is some consensus, at least in words if not yet in deeds, that opacity is bad for business, be it the business of governing or the business of making money.

This is not to say that forces resistant to reform and unfriendly to democracy have simply surrendered. On the contrary, they have tried to strengthen their positions. The recent decision by the Myanmar junta to extend the house arrest on Daw Aung San Suu Kyi is a case in point. Other countries pay lip service to democracy while their policies ensure that the playing field becomes increasingly uneven. The press remains submissive to the ruling clique and fundamental liberties are severely curtailed.

One of the dividends of the crisis is that the struggle for freedom has taken on a regional character. The civil society sector is forging regional solidarity for democracy and human rights. The governments of Association of Southeast Asian Nations (ASEAN) – the 10-nation regional grouping – are fearful of this new development and cling stubbornly to their outmoded doctrine of non-intervention in the domestic affairs of member-states.

Democracy is contagious

ASEAN is replete with internal contradictions. Some of its members – Indonesia, the Philippines, Thailand – have made giant leaps into mature democracy. But they have not made a serious effort to influence their less democratic partners, or to put democracy on the ASEAN agenda. The ASEAN leaders are proud of their tradition of consensual decision-making, but this is the very thing that keeps the group inert, that makes it unwilling to set a standard of democratic governance that it could impose on member-states.

But freedom has a demonstrative effect. ASEAN leaders must wake up to the reality that democracy is, more and more, asserting its presence in the region. The democratic mind is nurtured by social and political activism and by unlimited access to information. We are seeing the birth of an informed ASEANese community. It will be increasingly evident to ASEAN citizens that authoritarianism limits their choices and only democracy is capable of meeting their demand for greater choice.

The desire for freedom is universal, and the appetite for it is whetted when one sees others enjoying their liberties. Malaysians are more economically successful than Indonesians, but they envy their southern cousins for their political freedoms. They dream of the day when their television, radio and newspapers are as free as those found in Indonesia, Thailand and the Philippines. This Malaysian dream is shared by other ASEANese living under tight autocratic regimes.

It was the Cold War that brought the original five ASEAN countries together as a purely political grouping subscribing to “peace, freedom and neutrality”. With the end of the Cold War, it was inevitable that economics would take precedence over politics. And as the economies of the region become more interlinked, so do the fates of the ASEAN peoples.

ASEAN is diverse, but there are fundamental cultural, economic and political meeting points. The desire for wealth is a common motivation, and it has resulted in high economic growth in the region, albeit uneven. But economic well-being has an effect unintended by some of the ASEAN policy-makers. It nourishes the desire for things higher than mere physical comfort. Such higher needs are associated with freedom.

Current ASEAN leaders want to set limits to their cooperation. They should know that they are daydreaming. Deepening economic integration will bring with it many unintended consequences. It is not only the ASEANese desire for democracy, openness and freedom that they will have to grapple with. It may not be too long before the peoples of the region begin to see themselves as members of a single community. When that happens, the seed of ASEAN greatness will have been sown.

Anwar Ibrahim
Anwar Ibrahim was deputy prime minister Malaysia when he was dismissed in September 1998 by prime minister Mahathir Mohamad. In April 1999 after a controversial trial Ibrahim was convicted of corruption and jailed for six years. He was freed in September 2004. Attempts to clear his name have failed and he is prevented from seeking public office until 2008, unless he wins a royal pardon.

The post Anwar Ibrahim: The quest for social justice appeared first on Singapore News, Free Credit, Gaming, Finance & Tech.