It might have seemed like patriotism gone wild when the two members of Georgia's men's beach-volleyball team stitched the nicknames "Geor" and "Gia" onto their uniforms, spelling out the name of their besieged nation. But there's a twist: neither of the players is really Georgian. Renato Gomes and Jorge Terceiro are towering Brazilian imports recruited by Georgian President Mikheil Saakashvili for the sole purpose of representing his country in the Olympics.
More athletes than ever are competing in Beijing under flags (and, in some cases, names) different from the ones under which they were born. While some see this border-jumping as a symbol of how sport transcends nationality, giving some worthy athletes a chance to escape hardship in their home countries, others see it as a potential violation of the Olympic spirit. "What is not legitimate," Jacques Rogge, the International Olympic Committee chief, has said, "is when an athlete sells himself as a mercenary."
The gold medalists in recruiting foreign-born athletes are Qatar and Bahrain, tiny oil-rich Gulf states that have shelled out millions of dollars to persuade top African runners to change their citizenship. But many other nations play this game. Russia, for example, recruited two Americans to lead its men's and women's basketball teams. The strategy can pay off. Moroccan-born Rashid Ramzi gave Bahrain its first-ever track-and-field gold on Aug. 19 when he won the men's 1,500-m. In a globalized era, even athletic excellence can be outsourced.
And it can get much worse for some banks. In the "for what it's worth" department, Iraq's bonds are now considered safer than those of many US banks. The country's $2.7 billion of 5.8% bonds due 2028 have gained 45% since August 2007, according to Merrill Lynch & Co. indexes. Investors demand 4.84 percentage points more in yield to own the debt instead of Treasuries, down from 7.26 percentage points a year ago. The spread is narrower than for notes of Ohio banks National City Corp. and KeyCorp, suggesting Baghdad may be safer for bond investors than Cleveland. National City and KeyCorp, based in Cleveland, have debt ratings of A and spreads of 959 basis points (9.59%) and 7.55 basis points (7.55%), respectively. Iraq debt has no ratings. Clearly the market is ignoring the rating agencies which give the banks an "A" rating. Their debt is priced at the junk level. Go figure. (Source: Bloomberg)
The Obama campaign trotted out its new text messaging trick again tonight.
Last week the campaign said it would text message announce Obama's pick for running mate via text message. It was only partly successful, but the Dems collected thousands and thousands of phone numbers from people who signed up to receive the Veep text message.
Tonight the Democrats had another game for us. On the jumbo video screens inside INVESCO Field, attendees were asked to text in their answer to the following question: "What led you to join the 'campaign for change'?"
Looking around, I was surprised to see how many people with handset in hand typing in their answer. After a while, some of the text messaged answers scrolled across the jumbo screens inside the stadium.
And there's more. Huge maps on the jumbo-trons showed what parts of the country the largest volumes of text messages were coming in from.
While the DNC's particular application of the technology in a gee-whiz manner may be novel, the use of cell phone text messaging in politics is hardly new elsewhere in the world. Instead of merely using the technology for disseminating messages or soliciting opinion, what if I told you that text messaging has already been used to oust a sitting world leader...in 2001? Well, read on. This comes care of Diane Cross on Associated Content:
Text Messaging is IN! It is really not so new in Asia where everyone seems to own a cell phone for some weird reason. This brings to mind something that happened in Manila in 2001 when the people of the Philippines used text messaging to depose then Philippine President Joseph Erap Estrada.
It was called the first peaceful "TEXT REVOLUTION" in the world. It started in January of 2001 when everyone with a cellphone received cell messages exposing the corruption of the regime. Text messages were political jokes, so-called "secrets" and plain gossip. These messages also came with the request "please forward" , which meant that one had the option to forward the message to all those in his/her cell phone directory.
While the Philippine Senate then was voting on the impeachment of their president, everyone seemed to get a text message urging them to go and form some sort of "people power" at EDSA highway which was where the two main military camps were located. After three days, millions of people demanding the ouster of their president were in the streets with their cellphones.The crowd reached four million in two days because of "text messaging power". On the third day, January 17, 2001, the military from both camps decided to back the millions of people who were camped for the last three days and nights in the streets. On the same day, the Philippine president was forced to resign and hand over power peacefully to his Vice President (now President) Gloria Macapagal Arroyo.
Can text messaging be used as a political tool? YES. If text messaging was capable of bringing together the critical mass of a political crowd capable of toppling a President, then I would think that it can be a powerful political medium. Of course, a lot depends on the culture of the people but in Asia, text messages are taken seriously whether they are plain gossip or valid news. The same could work in the Western world , after all, don't most western texters subscribe to mobile news like CNN or BBC to know if there is anything "big" happening?
PC World: for a tech blog, it's quite sad that you are seven years tardy. Been there, done that, saw the movie, bought the T-shirt!
Which brings me to the topic at hand. In the wake of Doha's failure, states in the Association of Southeast Asian Nations (ASEAN) are themselves looking at an even-closed economic union modelled to some extent on the EU. It may surprise the legions of Eurosceptics that so many others--Asians, Middle Easterners, etc.--are keen on replicating a model which they consider to be so odious. Go figure. Led by Singaporean PM Lee Hsien Loong, ASEAN ministers are meeting in the fair city of Singapore to discuss a number of things. Aside from further economic integration eventually leading to a common market by 2015, ASEAN is discussing several trade deals perhaps spurred by Doha failure with--hold your breath--Japan, China, South Korea, India, Australia and New Zealand (ANZ). Jagdish Bhagwati would surely get indigestion from looking at this list. From Bloomberg:
Southeast Asian trade ministers are meeting this week to find ways to boost linkages and advance talks with some of their biggest economic partners as they seek to form a European Union-styled community.Agence-France Presse also has more:
Officials from the Association of Southeast Asian Nations will hold discussions with their counterparts from Japan, China, South Korea, India, Australia and New Zealand in Singapore starting tomorrow. They met with business leaders today.
Southeast Asian nations last year agreed to open up their markets further in a bid to create an economic zone modeled after the EU, without a common currency, by 2015. The group has said that it needs to improve its competitiveness as China and India, the world's two fastest-growing major economies, attract an increasing chunk of global investment.
``To gain our share of investments and jobs, Asean needs to become a well-integrated community,'' Singapore Prime Minister Lee Hsien Loong said today. ``We have to continue strengthening our economic foundations, reducing tariff and non-tariff barriers and simplifying business regulations.''
The 10-member group attracted over $60 billion of foreign direct investment in 2007, Lee said. That's up from about $51 billion the year before. Still, China alone attracted about $83 billion of foreign direct investment last year. ``Foreign investments are critical to all Asean countries because we rely on them to create jobs, to bring in new technology and to open up access to markets around the world,'' Lee said.
ASEAN has a combined population of about 550 million people. It is a diverse group which ranges from high-tech Singapore to poverty-stricken Myanmar, and the world's most populous Muslim nation, Indonesia...
ASEAN is already a free-trade area with 90 percent of goods traded having tariffs between zero and five percent...But officials said the overriding focus would be on efforts to achieve a single market and manufacturing base by 2015 to raise ASEAN's profile in the face of competition from China and India. "To stay in the game, ASEAN must become a strong integrated region," Singapore Prime Minister Lee Hsien Loong said. He warned that, individually, ASEAN states are "only tiny blips on the radar screens of investors."
Indonesian Trade Minister Mari Pangestu said ASEAN is likely to focus more on implementing and strengthening its free-trade agreements (FTAs) than on planning for a massive 16-nation pact including its key regional trading partners and covering about half of the global population. But she agreed the FTAs could evolve in the future. "What we are seeing is that ASEAN is at the focal point of all these trade agreements," Pangestu told AFP, noting that all the ASEAN deals with individual countries are similar in structure. "Eventually, when you consolidate the FTAs, it is possible that you could end up with something like that (an Asia-wide FTA)."
Regional FTAs could gain fresh momentum after the latest attempt to end a seven-year deadlock in the so-called Doha Round of global trade talks broke down in July because of a dispute between India and the United States over agricultural tariffs.
The Asian Development Bank (ADB), in a recent study on Asian regionalism, said "substantial gains could be realised from consolidating the many FTAs into a single, region-wide one" and from adopting practices to guide future regional and sub-regional FTAs.
But while Asia is forging ahead with trade linkages, the region has a major task in integrating its financial markets which are now larger, deeper and more sophisticated than they were a decade ago, it said. The region also has to make sure the benefits of economic progress reach a larger number of people, especially the poor, the Manila-based ADB said.
"Governments need to connect the poor to the thriving regional economy by eliminating labour market barriers, investing in workers' capabilities, and building infrastructure to connect disadvantaged regions with economic centres," said the agency, which aims to reduce poverty. The region was on the right track, however, the ADB said. "We are witnessing the beginnings of a strong, prosperous, outward-looking Asian economic community, regionally integrated yet connected with global markets, and with responsibility and influence to match its economic weight," the ADB said.
The Singapore meetings is also a milestone of sorts for ASEAN as it is the 40th such congregation. For all its foibles, long live ASEAN!
Our cyberfriend Daniel Altman says given the continued inability of the Doha round to finally be completed, the incentives for Russia joining are getting even less attractive. After fifteen years of laying the groundwork for eventual WTO accession, Russia is effectively throwing it all away. Not only is it becoming increasingly belligerent toward its would-be club members, but it is also pooh-poohing the supposed benefits that membership holds. I don't quite agree with the IHT blogger that WTO membership would have been a much greater prize had the Doha round succeeded as the gains to be had from its completion are incremental at best.
There is also a transatlantic divide on how to address the issue. US Commerce Secretary Carlos Guttierez has suggested that the US will raise Russia's perceived rough treatment of Georgia as a bargaining chip. Seeing America's intentions, Russia probably decided that walking away instead of being seen as kowtowing to pressure from Washington was a better decision. OTOH, the European Union--more dependent as it is on Russia's oil and natural gas supplies--actually think the Georgia episode should spur faster Russian accession. (Or, at least it did prior to Moscow's latest stunt of recognizing South Ossetia and Abkhazia.)
In any event, I leave you with the the news agency RIA Novosti's take on the matter. As it is pretty close to the official version of events, it should suffice for now:
Russia wants to join the WTO, but doubts it will be accepted into the global trade body within the next 12 months, the country's first deputy prime minister said on Monday. "The government says WTO accession is in line with Russia's strategic interests, and we will do everything necessary for talks to conclude with Russia joining. However, for the time being, we must note that we see no prospects for WTO accession within several months or a year," Igor Shuvalov told journalists.
He said that Russia would continue the accession process, but at the same time would terminate some of the trade agreements it had previously reached with the WTO as being too onerous." Russia intends to notify its WTO partners about its withdrawal from accords that are in conflict with its interests," he said.
The latest round of WTO talks collapsed in late July, but Russia's top negotiator said the parties could still return to the negotiating table later this year. Talks in Geneva between trade ministers from the largest WTO member countries broke up on July 29 after nine days of meetings to discuss agricultural subsidies and customs duties on industrial and agricultural products, and also try to fix a date for a conference aimed at achieving a breakthrough in the Doha round of talks on liberalizing global trade.
Maxim Medvedkov said that the parties had reached a common understanding on 18 of the 20 issues under discussion, including on the need to cut agricultural subsidies. At the same time, developed and developing nations failed to agree on protection of agricultural imports and reduction of industrial import tariffs. The Doha Round began in Qatar's capital in 2001, but has stalled due to disagreements over farming subsidies in the U.S., the EU and Japan, and trade tariffs in emerging economies.
Indian farmers in the Bengali state have protested against the provincial government allegedly misappropriating their farmland. Interestingly, Bengali state government is Communist-led. Given that similar accusations of expropriation are rife in China, I am led to believe that socialist regimes have more relaxed atitudes towards property rights than elsewhere. In any event, legal wranglings threaten to hold up the rollout of the "One Lakh Car." Indeed, Tata--owner of the famous British marques Jaguar and Land Rover--may just give up on producing cars in the state altogether and start anew elsewhere in India. From the Times of London:
The Economic Times has a host of articles on the Singur siege. Current West Bengal Chief Minister Buddhadeb Bhattacharjee is looking for a compromise on the contested 400 acres with the militant opposition which has called for the Tata factory siege. Meanwhile, Andhra Pradesh's Chief Minister Rajasekara Reddy is saying that his province is more than willing to host the plant. Indeed, many other Indian states would likely be willing to do so. Last, workers at the plant are urging Tata to relocate in West Bengal rather than pull out if push comes to shove. I'd challenge you to find a better definition of "political risk" in the developing world than this episode. Also, it's somewhat perverse how dyed-in-wool communists in China and now India have become so darned...capitalist. These are changing times.
The high-profile launch of the world's cheapest car - the £1,250 Tata Nano - was in jeopardy last night after tens of thousands of protesters gathered at the factory being built to produce the vehicle, complaining that the land had been taken illegally from small farmers. Demonstrators blocked roads leading to the plant at Singur, about 20 miles from Calcutta in the northern Indian state of West Bengal. About 4,000 riot police were drafted in to protect the factory, which is due to start producing the Nano this autumn. Security was tight and water cannons were on standby amid fears that the protests could turn violent.
Activists at Singur said that they would call off their protest only if the state government handed back about 400 acres to farmers - a move that could derail the Nano project. Tensions in the area earmarked for the Nano factory have been simmering for two years amid allegations that the communist-led state government of West Bengal had seized land illegally from local small farmers.
Mamata Banerjee, the head of the main opposition Trinamool Congress party in West Bengal, called for an indefinite siege of the factory. Farmers have not accepted any compensation. Kajal Das, the wife of a farmer who lost land to the project, said: “We have gathered today to get back our land. Money cannot compensate our loss.”
The demonstrations threaten to ruin the commercial debut of the Nano, one of the most closely watched launches in the car industry in decades. At its unveiling in January, the Nano was lauded as marking a revolution in the industry, allowing millions in India's emerging middle classes to buy a car for the first time.
On Friday, Ratan Tata, the Tata chief executive, said that he was ready to abandon the Singur plant if the long-running series of demonstrations did not abate. Such a decision would involve the company writing off up to $350 million (£189 million) in investment.
Already there are fears that the car's ultra-low-cost business model could be scrambled by sharp increases in raw materials and that Tata will make heavy losses on the first batch of Nanos sold. Indian analysts forecast that Tata will need to produce nearly 400,000 Nanos a year to make a profit, well above a planned initial capacity of 250,000. Any delay to production capacity coming online, therefore, could prove hugely expensive for the conglomerate.
Tata has not commented on the margins that it expects to make on the Nano. It has said only that the car will be profitable over the long term. The economics underpinning the Nano make it especially vulnerable to price movements in the commodity markets. Since Tata began to develop the Nano in 2003, raw material costs have increased from about 13 per cent to about 23 per cent of its price before taxes, according to an estimate by Global Insight, the consultants. By contrast, raw materials account for about 7 per cent of the cost of an average American car - or about $1,600, up from about $800 five years ago.
8/26 UPDATE: The ET has an op-ed well-worth reading on the matter. It's a long story, but there are two, not just one, socialist parties in India. There's the Communist Party of India (CPI) and the Communist Party of India - Marxist or CPI(M). Largely due to its control over West Bengal state for 31 years, the CPI(M) has been more visible in Indian politics. A few weeks back, it withdrew support from PM Manmohan Singh's United Progressive Alliance (UPA) over Singh welcoming US help with its nuclear programme. Still, the UPA survived a motion of confidence in rather dramatic fashion at the height of the 2008 WTO mini-ministerial.
Meanwhile, the opponent of Bengal's communist leadership, Mamata Banerjee, is known as a champion for farmers' causes to her supporters and a Luddite to her critics in her efforts to stop the CPI(M)'s industrialization efforts in West Bengal. At stake in the fight between the CPI(M) leadership and Banerjee's Trinamool Congress is the former maintaining an electoral advantage in West Bengal. The ET op-ed suggests Banerjee is wisely using this latest fracas to support her bid when elections in the Indian lower house (Lok Sabha) come around. Highlighting farmers' causes may tilt the electoral balance away from the CPI(M). If farmers have willingly elected Communist leaders well after the demise of the Soviet Union, what's stopping them from eventually putting Banerjee in office to replace the CPI(M)?
Right now, it would perhaps be wrong for anybody to assume that the lady (Banerjee) does not want the Tatas to be in West Bengal, whatever the rhetoric might be. All she is interested in is securing West Bengal’s rural votes and Singur, by far, gives her the best opportunity for that.
The Lok Sabha elections are just a few months away and if she can win the Battle of Singur and not make any unforced errors of her own in the coming months, she would perhaps be successful in weaning away a major portion of CPI(M)’s largest vote bank. If she is able to do that, she has more than a good chance of hounding the Reds out of Writers’ Buildings sometime in future.
Recent news, this piece care of Bloomberg, now says that Australian regulators have allowed the Chinese to increase their stake in Rio. It could be that the regulators down under frown on the merger of BHP and Rio because (1) they're afraid of offending China, customer numero uno and/or (2) they're not keen on burgeoning monopoly control of Aussie commodities:
Rio Tinto Group, fending off a hostile $143B takeover bid from BHP Billiton Ltd., rose in Sydney trading after biggest shareholder Aluminum Corp. of China, or Chinalco, was given Australian approval to raise its stake.
Rio, which has about half its operations in Australia, rose 1.1 percent to A$122.30 at the 4:10 p.m. Sydney time close on the Australian stock exchange. Its London stock is trading 14 percent below the 6,000 pence a share price paid by Chinalco and Alcoa Inc. when they bought their 9 percent stake in February. BHP fell 0.4 percent to A$40.00.
Chinalco can raise its stake in London-based Rio, the world's third-largest mining company, to 11 percent after Australia's Federal Treasurer Wayne Swan said yesterday he had no objections to the transaction. Chinalco would have to reapply to further increase its stake and had agreed not to seek representation on Rio's board, Swan said. [Ownership without representation = protectionism?]
Chinalco was pleased it had been given approval to increase its stake ``should it choose to do so'', the Beijing-based company said in a statement yesterday.
While large-scale migration is still officially frowned upon, backdoor routes to employment in Japan are becoming commonplace. Still, there are emerging cultural frictions, in this case between the natives and the Chinese migrants who perform unskilled labour in the Land of the Rising Sun. If I were a dyed-in-wool Marxist, I'd probably be crying "exploitation":
Another interesting IHT article concerns the perhaps lamentable trend of bourgeoisification among younger Japanese students. Unlike their predecessors who excelled at engineering and were undoubtedly part of their country's emergence as an industrial powerhouse, many of today's jaded generation prefer more Western pursuits like finance or hoity-toity creative fields. Not only are the remaining graduates in engineering fields being heavily courted by Japanese firms, but so too are some gaijin (foreign) engineers. Still, xenophobia dies hard:
With one of the world's most rapidly aging populations and lowest birthrates, Japan is facing acute labor shortages not only in farming towns like Kawakami but also in fishing villages, factories, restaurants and nursing homes, and on construction sites. Closed to immigration, Japan has admitted foreign workers through various loopholes, including employing growing numbers of foreign students as part-timers and temporary workers, like the Chinese here, as so-called foreign trainees.
But that unofficial supply route has left some businesses continually scrambling for a dependable work force and the foreigners vulnerable to abuse. With Japan's population projected to decline steeply over the next decades, the failure to secure a steady work force could harm the nation's long-term economic competitiveness.
"It's not only in farming but everywhere else," said Kenichiro Takano, an official at Kawakami's agriculture cooperative. "If we don't at least start by allowing in unskilled laborers for a limited period and for a limited number of times, and then come up with long-term solutions, Japan won't have a sufficient work force. The deadline is approaching."
The labor shortage has grown serious enough that a group of influential politicians in the long-governing Liberal Democratic Party recently released a report calling for the admission of 10 million immigrants in the next 50 years.
Junichi Akashi, an immigration specialist at the University of Tsukuba who advised the group, said its members had come to realize how Japan had come to depend on foreign laborers. "There is no doubt about that," Akashi said. "They've increased sharply in the last two to three years."
The foreign work force in Japan rose to more than one million in 2006 from fewer than 700,000 in 1996. But experts say that it will have to increase by significantly more to make up for the expected decline in the Japanese population. The government projects that Japan's population, 127 million, will fall to between 82 million and 99 million by 2055. Moreover, because the population is graying, the share that is of working age is expected to shrink even faster...
By all accounts, the Chinese workers here, who are technically considered foreign trainees and are not counted among Japan's foreign workers, are treated well compared with others in the same category.
The foreign trainee system was established in the mid-1990s, in theory to transfer technical expertise to young foreigners who would then apply the knowledge at home. After one year of training, the foreigners are allowed to work for two more years in their area of expertise. But the reality is that the foreign trainees — now numbering about 100,000 — have become a source of cheap labor. They are paid less than the local minimum wage during the first year, and little emphasis is placed on teaching them technical skills. Advocates for the foreign workers have reported abuses, unpaid wages and restrictions on their movements at many job sites. Nakamura, the Liberal Democratic politician, said the foreign trainee system was "shameful," but added that if it were dismantled, businesses would not be able to find Japanese replacements.
The problem is likely to worsen, because Japan has one of the lowest birthrates in the world. "Japan is sitting on a demographic time bomb," said Kazuhiro Asakawa, a professor of business at Keio University. "An explosion is going to take place. They see it coming, but no one is doing enough about it." The shortage is causing rising anxiety about Japan's competitiveness. China turns out some 400,000 engineers every year, hoping to usurp Japan's place one day as Asia's greatest economic power.
Afraid of a hollowing out of its vaunted technology industries, Japan has been scrambling to entice more of its younger citizens back into the sciences and engineering. But labor experts say the belated measures are limited and unlikely to fix the problem.
In the meantime, the country has slowly begun to accept more foreign engineers, but nowhere near the number that industry needs. While ingrained xenophobia is partly to blame, companies say Japan's language and closed corporate culture also create barriers so high that many foreign engineers simply refuse to come, even when they are specifically recruited. As a result, some companies are moving research jobs to India and Vietnam because they say it is easier than bringing non-Japanese employees here...
...Kizou Tagomori, director of recruitment at the computer maker Fujitsu, said it and its affiliates routinely fell about 10 percent shy of their annual hiring goal of 2,000 new employees. Fearing chronic shortages, the company has begun hiring foreigners to work in Japan.
Starting in 2003, Fujitsu began hiring about 30 foreigners a year, mostly Asians who had graduated from Japanese universities. Yet, many managers were reluctant to accept them initially. Tagomori said they are now gaining acceptance. Fujitsu's 10 Indian employees in Japan won over some of their co-workers by organizing a cricket team, he said.
But Fujitsu remains an exception. In an Economic Ministry survey last year, 79 percent of Japanese companies said they either had no plans to hire foreign engineers or were still undecided. The ministry said most Japanese managers still feared that foreigners would not be able to adapt to Japan's language or corporate culture.
To combat these attitudes, the ministry launched the Asian Talent Fund, a $30-million-a-year effort to offer Asian students Japanese language training and internships in order to help them find work here. "If these students do well, they can change Japanese attitudes drastically," said Go Takizawa, deputy director of the ministry's Human Resource Policy Division.
Nonetheless, labor experts warn that Japan may be doing too little, too late. They say it has already gained a negative reputation as discriminating against foreign employees, with weak job guarantees and glass ceilings. Experts say engineers from India and other countries will often opt for more open markets like that in the United States.
Indeed, a growing number of Japanese companies are having more success by building new research and development centers in countries with surpluses of engineers. Toyo Engineering, which designs chemical factories, said it and its affiliates now employ more engineers abroad - 3,000, mostly in India, Thailand and Malaysia - than in Japan, where they have 2,500 workers.
With corporate Japan still reluctant to accept foreigners, a half-dozen staffing companies have stepped into the breach by hiring Chinese and South Korean engineers to send to Japanese companies on a temporary basis. One of the biggest is Altech, which has set up training centers at two Chinese universities to recruit engineering students and train them in Japanese language and business customs. Of Altech's roughly 2,400 engineers, 138 are Chinese, and the company plans to hire more at a rate of 200 per year.
The consulting firm PriceWaterhouseCoopers (PWC) has an informative profile on Malaysia's place in the Islamic banking firmament. What is Malaysia's competitive advantage? Tax breaks and more tax breaks. It remains to be seen though whether such incentives are attractive enough to entice those in Arab states to park their petrodollars in Malaysia:
- Islamic banking and finance has become a force to be reckoned with in the global economic scenario. It often forms part of the equation in international finance, whether at a government-to-government or the private sector levels. Its significance has grown over the years and is now present in over 60 countries.
- Islamic banking assets: RM113.5 billion (US$30.9 billion).
- Takaful assets: RM6.2 billion (US$1.7 billion).
- Largest Islamic private debt securities (IPDS) market: 45.5% (RM125 billion or US$34 billion) of domestic corporate bonds.
- Active Islamic money market channelling about RM30 billion - RM40 billion monthly.
- Critical mass of diversified players - Islamic banks, investment banks, takaful companies, development financial institutions, savings institution, fund management companies, stock brokers and unit trusts.
- Pioneering many Global Islamic Banking and Finance initiatives
- Robust regulatory framework
Malaysia has a comprehensive regulatory and supervisory framework that caters to the unique characteristics of Islamic finance. Stronger standards have been set for corporate governance, transparency, disclosure, accountability, market discipline, risk management and customer protection.
- Shariah Framework
Operate in an environment that offers conducive and effective legal and Shariah framework. The Islamic Banking Act 1983 and Takaful Act 1984 were enacted to govern the conduct of Islamic banking institutions and takaful operators respectively.
- Liberal Foreign Exchange Regime
This includes the establishment of the:
- A wide range of tax exemptions across the Islamic finance spectrum
The Malaysian Islamic financial sector is seen as one of the most progressive and attractive in the world given the numerous incentives planned and further liberation in the coming years.
Malaysia is the Largest Islamic Banking and Financial Market
Progressive industry developments
The international financial community has taken note of Malaysia's strategic direction in developing and nurturing Islamic banking and finance. With this, they have acknowledged Malaysia as the leading Islamic financial centre. The strategies are being implemented through clear and deliberate policies spelt out in both the Financial Sector Master Plan as well as the Capital Market Master Plan. Its progressive industry developments include:
International Centre for Leadership in Finance (ICLlF)
International Centre for Education in Islamic Finance (INCEIF)
What is seemingly odd is that unions have long since gone out of fashion in Japan. How are contemporary Japanese supposed to take it to the Man? Still, in these times of economic insecurity, there is a growing backlash against "neoliberal" practices which are accused of eroding traditional Japanese ideas about loyalty and equality. While "lifetime employment" was never as widespread as commonly believed, the less certain economic picture of Japan does invite more angst over future employment, especially among the young. Indeed, the rising consciousness about the plight of temporary workers was magnified when 25-year-old Tomohiro Kato went on a murderous rampage in the Akihabara electronics district. Notable too is Japanese curiosity about Marxist themes without necessarily buying the idea of class struggle. Marx once said that religion was the opiate of the masses. Perhaps Marxism is performing that very same role in modern-day Japan. With demographic challenges steadily increasing, matters can only become more pointed. Many feel...alienated. From Reuters:
A Marxist novel written in 1929 has climbed to the top of Japan's best seller list, reflecting growing anxiety about job security and widening income gaps in the world's second-biggest economy. "I think people are feeling keenly that the economy is starting to slow down and things are getting more difficult," said 27-year-old Sota Furuya, a marketing consultant who recently read the book. Furuya is one of the many Japanese readers who have put "Kanikosen", or "A Crab-Canning Boat", on bestseller lists in recent months. It is near the top of several of Japan's leading bestseller lists, almost unheard of for a book of this genre.
"A Crab-Canning Boat" tells the tale of a crab boat crew working in harsh conditions under a sadistic captain. It was written by Takiji Kobayashi, a communist who was tortured to death by police at the age of 29 in 1933. Most of the novel is devoted to the crew's struggle to unite and coordinate a strike, and the story ends with their vow to topple their capitalists masters. The book has long been a favorite of scholars of Marxist literature, but it gained mainstream attention after an advertising campaign linked it with the concept of working poor, said Tsutomu Sasaki of Shinchosha Publishing Co, which reprints the pocket-sized book. The book has been on bestsellers' lists since around May.
Experts say the novel's popularity reflects anxiety over job security, widening wage gaps and the hardships suffered by growing ranks of low-paid part-time and contract workers. "I think the keywords here are sympathy and similarities," said Hirokazu Toeda, a professor at Tokyo's Waseda University. "Young people are sympathizing because they see themselves and today's situation today in the novel."
But while the story resonates, the novel is unlikely to hold practical lessons for workers in present-day Japan, where labor union membership has been in decline for decades and only a tiny minority of voters back leftist political parties. "The sympathy is sporadic and I don't think it will lead to organized movements," Toeda said. "The readership is too fragmented."
Once famed for its life-time employment system, Japan has seen the number of workers hired by the day and on short-term contracts, often without medical or pension benefits, grow in the years since its economy slumped in the early 1990s. Critics say economic reforms introduced during the 2001-2006 term of prime minister Junichiro Koizumi sped up the trend.
The average number of non-permanent workers rose to 17.3 million in the year to March 31, 2007, government data show. That was up 19 percent from five years earlier and more than 50 percent from a decade ago. The plight of such workers grabbed headlines in June after a 25-year-old temp worker stabbed seven people to death in a popular Tokyo shopping district, after posting messages on the Internet complaining about his work and loneliness.
For decades, a majority of Japanese considered themselves middle class. As employment conditions change, economic inequalities are widening, although the gap between rich and poor is still much narrower than in the United States. Many Japanese are also anxious about their future pensions, given the growing costs of a fast-ageing society in which two in five people will be 65 or over by mid-century.
The economic angst among younger Japanese is reflected in the readership of "A Crab-Canning Boat." About 30 percent are in their 20s, 30 percent in their 30s and 40s, and another third in their 50s and 60s, Shinchosha's Sasaki says. Fans of similar classics in the past have been mostly students or retirees.
"Things are different now from the stable employment conditions of Japan's period of high economic growth," said Waseda University's Toeda. "Life-time employment is gone and it's uncertain whether people will receive their pensions. "I think such insecurity attracts people to this text."
That said, readers agreed they were unlikely to take to the streets against their capitalist employers. "The novel's like a dream ... everyone uniting, fighting, and winning together," said Toru Sakai, a 24-year-old blue-collar worker. "But I doubt we'll see that type of reaction now." Marketing consultant Furuya agreed. "Society today is too diverse so there isn't one thing that people can bond over," he said. "It isn't as simple as it was in the novel."
On the wackier side of things, however, have I got one for you. Curses are most often spoken of in sports, where superstition is rife. For the Chicago Cubs, you have the Curse of the Billy Goat. For Japan's Hanshin Tigers, there's the Curse of the Colonel. As you would expect, currency trader are generally a less superstitious lot. While the business world has its own set of rituals like the opening bell that augurs a new trading day and whatnot, out-and-out superstition does not feature much. However, I recently came across a fairly amusing article in Reuters about a Spanish shopkeeper who, while tallying up his day's labours, came across a doctored euro coin. One of the interesting things about euro currency is that EU members can place their national symbols on one side of locally minted notes and coins even if they are usable elsewhere in the Eurozone.
Lo and behold, the image of the generally well-liked Spanish King Juan Carlos had been replaced on the one pound coin by the likeness of that famous American icon, Homer Simpson [!] In the report, it is said that the shopkeeper told of his finding last Friday. If you look at the chart above, the looooong red line represents Friday's trade when the euro lost a whopping 3.3 cents in a single day. Coincidence? Perhaps not.
The discovery of this act of desecration may have set off forces beyond the reach of monetary officials or currency traders. Superstition aside, I lie in wait for a good opportunity to rid myself of my remaining dollar holdings as I am a firm unbeliever in the monetary and fiscal policies of the United States (more on this later). The euro may take some lumps in the meantime that will enable me to find a good price at which to sell dollars and buy euros. Maybe a cartoon character had something to do with it:
A one euro coin has turned up in Spain bearing the face of cartoon couch potato Homer Simpson instead of that of the country's king, a sweetshop owner told Reuters on Friday.
Jose Martinez was counting the cash in his till in the city of Aviles, northern Spain, when he came across the coin where Homer's bald head, big eyes and big nose had replaced the serious features of King Juan Carlos.
"The coin must have been done by a professional, the work is impressive," he told Reuters.
The comical carver had not taken his tools to the other side of the coin displaying the map of Europe. So far, no other coins of the hapless, beer-swilling oaf have been found in circulation.
Going forward, there are three possible ways for the United States and China to pursue their economic and trade relations: robust engagement, dispute resolution through multilateral and bilateral enforcement measures, or punitive legislation. Since a retributive policy would be counterproductive and would harm U.S. economic interests, the U.S. government has chosen the first two approaches.
And rightly so. Since Washington stepped up its economic engagement with Beijing through the SED two years ago, the U.S.-Chinese relationship has deepened and expanded. By encouraging top-level discussions of the two countries' long-term strategic priorities, the SED has found effective ways to manage short-term tensions surrounding trade disputes. It has alleviated a complex set of concerns in the U.S. Congress in a way that has led to a significant appreciation of the renminbi and forestalled dangerous protectionist legislation. At the same time that U.S. consumers were growing deeply concerned about product safety, the SED developed a comprehensive plan for improving the quality and regulatory oversight of foods and drugs imported from China (the effort could even serve as a global model for product safety). And as the world was becoming more eager to reduce its dependence on oil, the SED initiated the Ten Year Energy and Environment Cooperation Framework to help expedite the United States' and China's efforts to increase their energy efficiency. The SED has enabled progress on significant noneconomic issues and more progress on economic issues than otherwise would have occurred.
These successes have created a foundation of mutual understanding and trust and a platform for further progress. History has shown that the ties between the United States and China have been most stable and mutually beneficial when a common interest has united leaders in Washington and Beijing. During the Cold War, balancing the Soviet Union's power in Asia was that shared interest. It generated trust for a very young U.S.-Chinese relationship and facilitated substantial bilateral cooperation. Now, the SED has reoriented U.S.-Chinese relations based on the strategic rationale of sustaining global economic growth. This unifying theme will motivate policymakers in both countries and offers the chance to redefine the terms of the two countries' relationship from simple cooperation to joint management and, perhaps eventually, even genuine partnership. Such a recasting will be an invitation to China to participate in global affairs as an equal -- a position that Beijing covets.
I have learned firsthand that the United States is much more effective at resolving global issues when it approaches them multilaterally rather than unilaterally. On every major economic, political, and security issue, the path that China chooses will affect the United States' ability to achieve its goals. This will also be true under the next U.S. administration. The SED must be used to help manage the myriad economic issues that will undoubtedly arise and help keep the vital U.S.-Chinese relationship on an even keel, productively advancing shared interests while working through enduring differences. It is possible to manage these challenges in a way that advances both U.S. and Chinese interests. And it is my hope that the next U.S. president will expand on the SED to take U.S.-Chinese relations to the next level.
(1) Fatcat corporate sponsors with a lot of courtesy tickets haven't used their allocations that much for preliminaries--they're waiting to use them for later, medal-bearing events;
(2) Blame officials with tickets, be they from the media, the teams, or the national olympic comittees who are also not taking their places;
(3) The PRC is actively persecuting ticket touts (scalpers to the non-King's English speakers);
While many resent ticket scalpers, I have always thought that they provide an important economic function. Especially for in-demand events, they maintain a semblance of market functioning even moments before or even during an event. Unfortunately, the overzealous Chinese organizing committee doesn't seem to agree. According to the Canadian Press, Olympic ticket scalpers risk being sent off to re-education camps [!] and labour camps [!!] for their heinous activities. Does the punishment fit the crime? Somehow, I think this a bit extreme. To what extent the fear of being sent to the Chinese gulag (laogai) factors into empty seats alongside the other two reasons is something that certainly raises interesting questions:
There may be swarms of security volunteers and police officers posted every 30 metres along Beijing's main roads, but scalpers are still managing to find unguarded pieces of sidewalk to tout the hottest tickets in town. "Oh-limp-ick-uh tickets!" says a man in broken English, leaning by a tree. As the Olympic Games launch in the Chinese capital, scalpers are selling the coveted sporting billets despite threats of being sent to labour camps if caught. "Boxing," the man said in Chinese, raising his fists to highlight the sport. "Track and field," he offered, declining to give his name.
The police have told Chinese media that ticket scalpers can be detained for 10 to 15 days, but also raised the threat of re-education camps, where Chinese can be sentenced to manual labour without trial. Amnesty International as well as other human rights groups have called on China to eliminate the practice.
While microchips have been embedded in all Beijing Olympics tickets, only opening and closing ceremony tickets contain photos and passport data. Authorities have said holders can transfer a ticket only once by going to a Bank of China branch, but tickets purchased outside China do not have such restrictions.
An American graduate student studying in Beijing, who would only give his first name, Aaron, because he was worried about being identified, said he bought 100 tickets in the U.S. lottery a year and a half ago and sold them to foreigners in Beijing for three times the original amount. "I knew I was coming to Beijing a long time ago for the Olympic period. I didn't think I would get many tickets, so I asked for a ton, and I ended up getting every one I asked for," he said.
Ticket sales in China kicked off Oct. 30 on a first-come, first-served basis, but the system was suspended the next day after demand overwhelmed the system. Organizers reverted to a lottery system, under which people could only get eight tickets compared with the 50 given previously.
"The men's basketball match between China and U.S. has sold out. Yesterday it was over $1,460 (US) and it has kept changing by the day," another scalper, who sells his tickets outside the Worker's Stadium in central Beijing, said Saturday. He did not want to give his name for fear of arrest. He offered tickets for Chinese hurdler Liu Xiang's final match at $875. Another man offered tickets for the 110-metre men's hurdling for five times the original price at $292.
The Beijing Olympic Organizing Committee also has ordered Web sites not to hawk Olympic tickets. While one website was still offering tickets on Saturday and a search brought up other links, many posts had been taken down.
A notice on the website of the Beijing Municipal Public Security Bureau in May said that since March 18, the police had caught 316 scalpers and detained more than 200 of them, including two who were punished with sentences to labour camps.
Re-education through labour was established by the Communist government in 1955 for routine non-violent offenders, with prostitutes and drug addicts typical targets. The maximum term is three years, but a fourth can be added if the offender misbehaves.
Nicholas Bequelin of Human Rights Watch in Hong Kong said the population of labour camps has not decreased despite some reform efforts within China. The system totally bypasses criminal law, he said. "I think the issue here is that nobody should be deprived of his or her liberty without the benefit of a trial," he said. "Re-education through labour is completely illegal under international law. This is arbitrary detention." In a report released in July, Amnesty International said the government has used the Olympics as a pretext for extending the use of re-education through labour.
Mr. Zhang, a spokesman for the Beijing Municipal Public Security Bureau who like many Chinese officials would only give his last name, said they deal with scalpers under the law. "We deal with scalpers according to how serious the case is, including the number of tickets they resell, the profits they make and whether they repeatedly break the law. So it's hard to say whether we re-educate scalpers through labour if they resell tickets," he said.
Today's post concerns two of the greatest thinkers of political economy being subject to similar scrutiny: what a leveller it would indeed be if the fellow who wrote the Theory of Moral Sentiments and the founder of Marxism himself could be brought down to the gutter of modern-day tabloid fare. Tall poppy syndrome, indeed. The thing is, we no longer have these gents around to do Edwards-style "ah huv sinned" confessions or investigators to dig up the dirt. Really, what we can go by is not enough to have the characters of Smith and Marx impugned.
Let us begin with Adam Smith. It may surprise many that this great champion of commercial activity was an active contributor to charity throughout his life, and that he left most of his estate to charity in the absence of an heir. Nevertheless, there has always been a passage which has raised the eyebrows of the chattering classes in the Wealth of Nations. While discussing the nutritional properties of potatoes, of all things, Smith offers anecdotal evidence that the Irish--including Irish prostitutes--look plenty hale and hearty to him. While Smith says that the Scots who mostly consume oatmeal bread do not appear as healthy to him as the wheat bread eating English, the Irish appear to be similarly nourished as the English:
The chairmen, porters, and coal-heavers in London, and those unfortunate women who live by prostitution, the strongest men and the most beautiful women perhaps in the British dominions [!?], are said to be, the greater part of them, from the lowest rank of people in Ireland, who are generally fed with this root [the potato]. No food can afford a more decisive proof of its nourishing quality, or of its being peculiarly suitable to the health of the human constitution.This rather odd allusion to Irish prostitutes being "the most beautiful women in the British dominions" suggests to some that, yup, Adam Smith was a john. In a book review of a biography on Smith, Bloomberg columnist Matthew Lynn writes:
The Scotsman never married, nor has Buchan dug up any serious liaisons. Smith did once assert that the Irish prostitutes of London were the world's most beautiful women, which suggests to Buchan that the price mechanism might have governed that aspect of his life [!--and double--!!]Hearsay and innuendo, eh? Would we have a lower opinion of Smith if he indeed used the price mechanism to get some of what Marvin Gaye sang about? I haven't come across the Buchan book yet, although it certainly pushes the limits of speculation. 'Tis tabloid fodder.
Let us now move to the famously hirsute Karl Marx. I first encountered the suggestion that the housekeeper of the Marx family, Helene Demuth, bore Karl an illegitimate son, Freddie Demuth, in Francis Wheen's Karl Marx: A Life. In that book, it is treated as sordid fact that Karl Marx got his housekeeper with child yet kept her in his residence together with the rest of the Marx clan until his death. This bit of historical curiosity about the life and times of Karl Marx has never been firmly established, however, unlike how Wheen makes it seem. Given that the father of Freddy Demuth was never identified, the circumstances which led to Helene Demuth's son being born have always attracted attention:
Professor Terrell Carver at Bristol, a well-regarded scholar on Marx who I've had the pleasure of meeting before, avers that the balance of the evidence weighs against Karl being the father of Freddy Demuth:
Freddy would be an altogether minor character in any consideration of Engels’s life or Marx’s, were it not for a document, first published in extracts in 1962. According to the story recounted there, Freddy is suddenly a relation of Marx and his family and – in an ambiguous way – of Engels himself. Ostensibly the tale concerns Marx and his alleged affair with the housemaid, but it is Engels who plays the central role in the supposed narrative.
This typewritten document appears to be a letter dated 2-4 September 1898, written by Louise Freyberger née Strasser (1860-1950), three years after the Engels household broke up. As Louise Kautsky, the recently divorced wife of the prominent German socialist Karl Kautsky (1854-1938), she had been asked by Engels, within a month of Lenchen’s death, to keep house for him, and she arrived post haste from Vienna. In 1894 she married Dr. Ludwig Freyberger, another émigré, and he came to live in Engels’s house, too – much to Eleanor’s displeasure, as she disliked Louise and her influence over Engels, then in his seventies (2 K 444; 2 H 725-6).
The document spins a lurid tale of deathbed revelations by Engels to Eleanor Marx, principally the claim that Marx himself was Freddy’s father. Fearing gossip imputing paternity, Engels is said to have declared ‘the truth’, in case he should be accused, after his death, of treating Freddy shabbily. The date on the document is some six months after Eleanor’s suicide, so if there was a letter, Eleanor was conveniently out of the way, though others mentioned as in on the story to some degree – such as Sam Moore (c. 1830-1911), Marx’s English translator, and Eleanor’s sister Laura – clearly were not. The addressee of the supposed letter, the prominent German socialist and trade unionist August Bebel (1840-1913), or anyone else who had been the recipient of such tales from Louise, could have checked with them.
Reasons for believing that Marx was Freddy’s father:
- a circumstantial and reinterpretive ‘fit’ between Louise’s account/Engels’s alleged claim and various letters that survive;
- testimony in their own letters that Bebel and Zetkin believed Louise’s account/Engels’s alleged claim based on their respective close relationships with Louise and Engels (Bebel) and with Eleanor Marx (Zetkin).
Reasons for not believing that Marx was Freddy’s father:
- no direct evidence that bears unambiguously on this matter;
- direct evidence from correspondence that those in contact with Freddy were not concerned with his paternity;
- direct evidence from correspondence that those concerned with the original ‘scandal’ were not at odds with each other from 1850 onwards;
- direct evidence that the 1895 Engels ‘deathbed’ revelations made no difference to those involved;
- no source for any concern about this issue other than Louise’s account/Engels’s alleged claim (in the 1890s and after the 1960s), other than the suggestion from Bebel that Louise had told him something about Engels/Marx/Freddy in the early 1890s; the recollection from Zetkin that Eleanor had told her that Marx was Freddy’s father; and Frederick’s self-interested and otherwise unsupported claim to be ‘the son of the great Marx’;
- lack of recorded comment on the subject from numerous people who are all said (by Louise or Zetkin) ‘to know’, e.g. Frau Marx, Moore, Eleanor Marx, the Lafargues, Jenny (Marx) Longuet, Engels, Ludwig Freyberger, Lessner, Pfänder, Parvus [pseud. Alexander Lazarevich Gel’fand or Helphand], Tanya Helfand [Parvus’s wife], ‘a friend of Bernstein’s’ etc. ... other than the self-declared sceptics Bernstein and Kautsky (in so far as we have their directly recorded comments, which neither Louise nor Zetkin take up directly);
- Bernstein (in 1898) and Kautsky (in 1929) say directly that they don’t believe Louise’s account/Engels’s alleged claim, or that they are not convinced by what they’ve heard of it, giving their reasons (e.g. that it was out of character for Marx, and that Louise’s character lent itself to fantasy);
- confusion about the one (supposed) letter that would confirm the ‘Engels accepted paternity to get Marx off the marital hook’ thesis (of course, Freddy’s father might really be someone else anyway, even if Marx had had an affair and thought he was the father, and so wanted to ‘transfer’ this to Engels);
- Louise had 52 more years in which to tell the tale, and no obvious reason why not (i.e. unlike Zetkin, she was not a political figure, nor even a party stalwart).
What is interesting to me given that Russia is trying to accede to the WTO [1, 2, 3] is how this conflict will affect the outcome of its WTO accession negotiations. Russia needs the assent of all current WTO members--including Georgia. Now, I may not be exceedingly bright, but going to war with someone you are trying to gain the favour of is generally not in the Dale Carnegie playbook. Would you like some fries with that?
(As an aside, it seems to me that now is the best time for Taiwan to declare independence. With the eyes of the world on the Olympics, China can ill afford to attempt invading Taiwan for a fortnight or so. I guess it's good that the Taiwanese nationalist Chen Shui-Bian is no longer president.)
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