After many years of galloping growth rates, India is grinding to a halt, and countries in the region may soon feel the impact.
To ease pressure on the rupee, the government said it had set up a panel to look at paying for imported items in rupees rather than foreign exchange under bilateral currency swap agreements. Photo: Reuters
INDIA is in the news and for all the wrong reasons. With the rupee
collapsing, the current account deficit exploding and corporate debt set
to melt down (trimming its contribution to Forbes billionaires’ list), China’s strategic challenger looks set to drag the rest of Asia-Pacific into a prolonged economic crisis.
After many years of galloping GDP growth rates, India is grinding to a
halt. Growth in 2012 was 6.3% – this year it will be lucky if it can
get above 3%.
For a proud nation with a US$4.684 trillion (RM15.4 trillion)
economy, its own nuclear bomb and a navy equipped with both aircraft
carriers and submarines, this is a massive loss of face and, indeed,
opportunity.
India may well go down in the annals of contemporary economic history
as being the trigger of the 2013 financial crisis – much as the South
Koreans and Thais were the forerunners of the 1998 meltdown.
So what went wrong in India? Wasn’t the subcontinent’s giant supposed
to be a great developmental success story and what are the lessons for
us in Malaysia?
According to a pair of extremely high-profile economists, Jean Dreze and Nobel Prize winner Amartya Sen, whose book An Uncertain Glory: India and its Contradictions was
launched earlier this year, India allowed its public sector, especially
healthcare and education, to wither. This failure of governance and
execution compounded deeply-rooted iniquities at the heart of its
complex – a caste-driven society.
And with a general election slated for next year, there’s little
doubt that a floundering Congress-led administration under Manmohan
Singh will once again fail to tackle one of the world’s most inefficient
and corrupt bureaucracies.
So, with the precipice fast approaching, it would be wise for
Malaysian readers to acknowledge that India will not suddenly rebound
and we will all be tainted by association. Moreover when the fear sweeps
the markets, the contagion often ends up being far worse than anything
crafted by Hollywood’s merchants of doom.
To be fair, India’s track record has been stellar if you’re middle-class and above.
Opportunities have abounded, despite the odd infrastructural glitch
such as the July 2012 power blackout across Northern India (at the
height of the summer heat).
However, for those at the bottom of the social scale, life has been less enthralling.
Take, for instance, the Indian government’s meagre spending on
healthcare – only 1.2% of GDP alongside China’s 2.7% and Latin America’s
3.8%. Converted into absolute expenditure (at PPP terms), India has
been spending US$39 (RM125) per capita whilst China has spent US$203
(RM655) per capita.
To put things into perspective, Malaysia spends 4.8% of its GDP on
healthcare or about US$400 (RM1,292) per capita. Indonesia spends 2.7%
of its GDP and US$100 (RM323) per capita.
Understandably, India has reaped a bitter harvest from this shocking
under-investment, achieving Quality of Life indices that pale in
comparison even with neighbouring Bangla-desh. This is despite
Bangladesh having a GDP per capita of US$747 (RM2,413) compared to
India’s US$3,557 (RM11,490).
But it’s the weaker sections of society that have been the most
imperilled: women, tribal people and the lower castes. Indeed, female
empowerment in Muslim Bangladesh far surpasses anything in India.
However, the story isn’t uniformly bad. India is a vast nation and
there are differences in the various indices between the country’s North
and West (sub-Saharan African bad) and its South (generally good). So,
if one is to subscribe to the Sen/Dreze formulation, India’s failure is
primarily a failure of governance with more public money being spent on
notoriously corrupt fertilizer subsidies rather than healthcare and
education.
We cannot underestimate the cost of this neglect to invest in its
people: not only due to higher crime and squalor, but also in terms of
lost opportunities via better human capital.
As a result of this terrible under-investment in their own people,
India’s “demographic boom” may well be worthless as its burgeoning youth
population of some 430 million won’t be adequately educated, employed
and/or fed.
Of course, the two men’s thesis hasn’t been uniformly accepted.
Free-market thinkers like Columbia University’s Jagdish Bhagwati have
taken issue with their prescriptions, seeing rather the need for less
state intervention and greater private sector participation. The ensuing
debate between the two prominent thinkers has been sharp and
acrimonious, reflecting the underlying sense of unease.
Ultimately, the correct policy path for India probably lies midway
between the two positions, but for now, we can be sure that little will
be done to improve the lot of India’s hundreds of millions of poor.
Dreze and Sen have also criticised India’s free market and
much-lauded democracy, arguing that neither has helped address its
fundamental inequalities.
Look across the Himalayas to China, however, whose authoritarian
system has brought it great wealth, but also the same inequalities and
social dislocations and things don’t seem that rosy either.
Where should developing economies go then? Perhaps this is the great
paradox of modern capitalism: that nothing countries do will ever be
right in the long run and that periodic market scares, if not an
outright collapse are only to be expected!
Only then will governments be forced to reassess and change their
policies. So as emerging markets ready themselves for the impending
squalls, we in Malaysia should also be sharpening our policy “tools” and
readying ourselves to address the many failings in our policy
“tool-box”.
Contributed by KARIM RASLAN
> The views expressed are entirely the writer’s own.
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Thursday, 5 September 2013
US-Syria drums of war — a familiar beat
The only solution for the Syrian issue is a political one and a peace conference of all actors may stop further bloodshed.
A HORRENDOUS attack with chemical weapons is alleged to have killed 1,429 people in a Damascus suburb on Aug 21.
Use of such chemical weapons is a flagrant violation of international law and the culprits must be hounded and herded to the International Criminal Court.
However, it is not clear who the real perpetrators are.
The Syrian government alleges that US-supported rebels carried out the attack to turn global sentiment against Syria. Obama pins the blame on Assad and is using this as a justification for a threatened war that circumvents the UN, like Bush before him.
The claims of both sides must be investigated impartially by the UN and there should be no resort to unilateral punishment before all facts are established. It is not in accordance with due process for the accusers to arrogate to themselves the role of adjudicators.
In the meantime, one must note that in March, an Independent Commission of Inquiry of the UN headed by Carla del Ponte had concluded that the nerve agent sarin was used by US-supported rebels and not the Syrian government.
It is also noteworthy that the weapons inspection team of the UN was in Syria at the invitation of Assad who is unlikely to have resorted to such an abomination with the UN watching over his shoulders.
The US and UK have a long, catalogued history of murderous lies to construct the pretext for war.
In August 1945, the US concealed the fact that Japan was actively negotiating surrender and went ahead to incinerate hundreds of thousands of civilians in Hiroshima and Nagasaki in a brutal atomic attack.
The US invasion of Vietnam in August 1964 was founded on the deceitful lie that Vietnamese torpedo boats had attacked US ships in the Gulf of Tonkin. The war took the lives of millions of innocent Asians and 50,000 American combatants.
In 2003, lies and skewed facts about Saddam’s alleged weapons of mass destruction led to the pulverisation and conquest of Iraq.
Similar deceitful warmongering led to the attacks and subjugation of Afghanistan and Libya. The Third World is now quite mindful of Western spin masters and their weapons of mass deception.
Assad is on a winning wicket and Western allies are understandably eager to find any pretext to kill him like the way they did Saddam of Iraq and Gaddafi of Libya.
The US, EU and Israel are fomenting civil war in Syria that has so far killed 100,000 for various geopolitical reasons: to weaken Iran and Hezbollah who are the only remaining regional rivals of Israel; to thwart the proposed Iran-Syria oil pipeline; and to kill the plan to sell Iranian oil in currencies other than the almighty US dollar. The Syrian conflict is a proxy war by the US against Iran.
There is also the desire to consolidate an uncompromising version of corporatism that seeks total economic hegemony over the region. Observers have noted that “defence manufacturer” Lockheed Martin’s stock prices rose sharply since news proliferated of the chemical weapons attack!
Any attack on Syria by a “coalition of the willing” on so-called humanitarian grounds will be a gross violation of the UN Charter.
Except for the narrow exception of unilateral self-defence under Article 51, the Security Council of the UN is the only authority empowered by chapter VII, Articles 39-42 to use force against a nation that is guilty of a threat to the peace, breach of the peace or act of aggression.
American-style unilateralism and exceptionalism pose significant potential for abuse. This is evidenced by Nato’s destruction of Gaddafi’s regime in 2011 under the guise of a limited humanitarian operation. One must also note that the terror of war necessarily results in thousands of civilian casualties.
Secretary of State John Kerry’s description of the Damascus chemical attack as a “moral obscenity” is very touching but reeks of hypocrisy. It is well known that the US used napalm and agent orange in Vietnam; depleted uranium in Iraq, Kuwait, Afghanistan and Bosnia; and white phosphorus bombs in Fallujah in 2004.
Saddam Hussein’s chemical attacks against Iran were with Washington’s full knowledge and support. In fact the chemical weapons, the feeder stock and equipment were supplied by the US, UK, Germany and Italy.
While the world has been focused on the horror in Damascus, US supported rebels have carried out a campaign of ethnic cleansing against 40,000 Syrian Kurds to force them to flee across the Tigris into Iraq.
There is not a word of Western condemnation of this atrocity.
The threatened missile attacks against Syria would cost thousands of innocent lives. In typical American style of justice, people will be butchered in order to save them from a dictator!
Weapon depots will explode, resulting in horrendous collateral damage. There is no certainty that Bashar Al-Assad will be toppled.
A broader conflict may result if Syria, Lebanon, Iraq and Iran react against Israel and America’s bases in the Middle East.
US military intervention in Syria’s civil war will, therefore, be an enormous mistake. It will not promote US interests. The use of missiles can change the military balance but it cannot resolve the underlying historic, ethnic, religious and tribal issues that are fuelling this conflict.
The only solution for the Syrian issue is a political one. A peace conference of all actors may stop further bloodshed.
President Obama must remember that you can start a war when you will; you can’t end it when you please!
Reflecting On The Law - contributed by Shad Saleem Faruqi
Shad Saleem Faruqi is Professor of Law at UiTM. The views expressed here are entirely his own.
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Wednesday, 4 September 2013
Microsoft buys Nokia’s phone for $7.2 Billion
Ballmer: Nokia Deal Accelerates Share Position
http://www.bloomberg.com/news/2013-09-03/microsoft-to-buy-nokia-s-devices-business-for-5-44-billion-euros.html
Microsoft Corp. (MSFT) is spending 5.44 billion euros ($7.2 billion) to buy Nokia Oyj (NOK1V)’s handset unit so it can gain ground on Apple Inc. and Google (GOOG) Inc. in a smartphone market it let get away -- gaining a possible new chief executive officer in the process.
Nokia’s devices and services unit, which accounted for half of the company’s 2012 revenue, along with 32,000 employees, will transfer to Microsoft, the companies said. Nokia CEO Stephen Elop, 49, will return to Microsoft after a three-year stint running the Finnish manufacturer. The move stoked speculation he may be a successor to CEO Steve Ballmer, who said last month he’d retire within 12 months.
Microsoft is deepening a push into hardware as dwindling computer sales sap demand for the programs that made it the world’s largest software maker. Nokia shares jumped as much as 48 percent in Helsinki as the sale removes a money-losing handset business and lets it focus on higher-margin networking gear. Even combined, the companies have less than 4 percent of the smartphone market, leaving them far behind Apple and Google.
“The question is whether combining two weak companies will get you a strong new competitor -- it’s doubtful,” said Paul Budde, a telecommunications consultant in Sydney. “Both Nokia and Microsoft really missed the boat in terms of smartphones, and it is extremely difficult to claw your way back from that.”
The shares rose 34 percent to 3.97 euros in Helsinki, valuing Nokia at 14.9 billion euros. The shares of Redmond, Washington-based Microsoft fell 4.6 percent to $31.88 at the close in New York, wiping out more than $12.6 billion in market value. The company’s market capitalization is now about $265.6 billion.
As part of the agreement, Microsoft will pay 3.79 billion euros for Nokia’s devices division and 1.65 billion euros for patents, according to a statement from the companies. The all-cash transaction, subject to Nokia investors’ approval, is expected to be completed in the first quarter of 2014. JPMorgan Chase & Co. advised Nokia on the transaction, while Goldman Sachs Group Inc. worked with Microsoft.
“It’s a big transformation, but that’s what you’ve got to do in the tech business to move forward,” Ballmer told Tom Keene on Bloomberg Television’s “The Pulse.”
Microsoft said it is confident of getting the deal approved by early next year. The transaction will shave 12 cents a share off earnings in the current fiscal year, or 8 cents excluding some items, the company said. In 2015, the cost will be 6 cents based on generally accepted accounting principles. Excluding some costs, the deal will add to profit that year.
Microsoft also expects to get more profit for every device sold -- more than $40 a unit for smartphones, compared with the less than $10 in gross profit it currently gets for Windows Phone sold by Nokia. That doesn’t include the costs of marketing and development, though.
The Microsoft purchase was the second major deal to be announced during the U.S. Labor Day holiday yesterday. Verizon Communications Inc. agreed to pay $130 billion for Vodafone Group Plc’s stake in their U.S. wireless venture in the biggest transaction in more than a decade.
The Microsoft-Nokia deal is the largest for a wireless device maker after Google’s purchase of Motorola’s handset unit in 2012, according to data compiled by Bloomberg. For Microsoft, the deal including the payment to license Nokia’s patents is its second-biggest behind the $8.5 billion purchase of Internet telephone company Skype in 2011.
Google paid about 1.3 times annual operating income for the handset maker, while Nokia’s device and services business reported an operating loss last year, according to the data.
With the latest sale, the original pioneers in the mobile-phone industry -- Motorola, Nokia and Ericsson AB -- have all ceased to be independent handset manufacturers or given up on the business. BlackBerry Ltd. said last month it’s considering putting itself up for sale. Its shares advanced less than 1 percent to $10.21 in today’s trading.
Microsoft, meanwhile, becomes the last major developer of smartphone operating systems to get into manufacturing. Apple makes its own handsets, which use its iOS operating system. Google’s acquisition of Motorola Mobility gave it its own lineup of phones.
To break even on an operating basis, Microsoft will need Nokia to sell about 50 million smartphones a year, it said in a presentation. Nokia has a run-rate of about 30 million units. In the second quarter, Nokia sold 7.4 million smartphones under the Lumia line.
Microsoft acquired the Lumia brand to use with smartphones, while it will license the Nokia brand to use with low-end phones for 10 years, Elop said at a press briefing today. Microsoft will later decide what to call its future smartphones.
Microsoft will face a balancing act owning Nokia and keeping its other hardware partners, including HTC Corp. (2498) and Samsung Electronics Co., committed to its Windows Phone. Aiming to reassure other phone makers that Microsoft will still support them, Ballmer said that the company was “100 percent” committed to helping its manufacturing partners.
Ballmer declined to say whether Elop would become CEO, or had been a candidate to succeed him.
Microsoft and Nokia have had a close relationship through Elop, who had run Microsoft’s Office unit. He left the software maker in September 2010 to take the top job at Nokia.
At the time, Elop likened Nokia’s position to a man standing on a burning oil platform on the verge of being engulfed in flames, facing the option of staying aboard or jumping to the ocean to have a chance to survive.
In February 2011, Elop struck a deal with Ballmer to switch Nokia’s smartphones from its own Symbian operating system to Windows Phone. In exchange, Microsoft ponied up more than $1 billion to pay for Nokia marketing and developing products on Windows.
Still, Nokia remains a top seller of traditional mobile phones -- models that are more popular in developing markets. In total shipments, the company ranks second to Samsung among device manufacturers. Samsung accounted for 26 percent of shipments last quarter, while Nokia had 14 percent. Apple came in third with 7.2 percent.
After the sale to Microsoft, Nokia’s biggest business will be network equipment, which it recently fully took over from Siemens AG (SIE) and renamed Nokia Solutions and Networks. The unit competes with Ericsson, Alcatel-Lucent as well as China’s Huawei Technologies Co. and ZTE Corp. (763)
Ericsson jumped 5 percent to 82.50 kronor in Stockholm. Alcatel-Lucent, which under new CEO Michel Combes is streamlining its business, added 9.2 percent to 2.20 euros in Paris trading.
“Nokia has a highly evolved device design and manufacturing process which will benefit Microsoft greatly,” said Al Hilwa, an analyst at research firm IDC. “This is simply the fastest path in front of Microsoft to achieve something like Apple’s vision on devices.”
Contributed by Bloomberg
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http://www.bloomberg.com/news/2013-09-03/microsoft-to-buy-nokia-s-devices-business-for-5-44-billion-euros.html
Microsoft Corp. (MSFT) is spending 5.44 billion euros ($7.2 billion) to buy Nokia Oyj (NOK1V)’s handset unit so it can gain ground on Apple Inc. and Google (GOOG) Inc. in a smartphone market it let get away -- gaining a possible new chief executive officer in the process.
Nokia’s devices and services unit, which accounted for half of the company’s 2012 revenue, along with 32,000 employees, will transfer to Microsoft, the companies said. Nokia CEO Stephen Elop, 49, will return to Microsoft after a three-year stint running the Finnish manufacturer. The move stoked speculation he may be a successor to CEO Steve Ballmer, who said last month he’d retire within 12 months.
Microsoft is deepening a push into hardware as dwindling computer sales sap demand for the programs that made it the world’s largest software maker. Nokia shares jumped as much as 48 percent in Helsinki as the sale removes a money-losing handset business and lets it focus on higher-margin networking gear. Even combined, the companies have less than 4 percent of the smartphone market, leaving them far behind Apple and Google.
“The question is whether combining two weak companies will get you a strong new competitor -- it’s doubtful,” said Paul Budde, a telecommunications consultant in Sydney. “Both Nokia and Microsoft really missed the boat in terms of smartphones, and it is extremely difficult to claw your way back from that.”
Market-Share Decline
Nokia, based in Espoo, Finland, racked up losses of more than 5 billion euros over nine quarters as Elop’s comeback efforts failed to eat into the dominance of Apple (AAPL) and Google’s Android platform in the smartphone market. The stock has lost more than 80 percent in the five years through yesterday.The shares rose 34 percent to 3.97 euros in Helsinki, valuing Nokia at 14.9 billion euros. The shares of Redmond, Washington-based Microsoft fell 4.6 percent to $31.88 at the close in New York, wiping out more than $12.6 billion in market value. The company’s market capitalization is now about $265.6 billion.
As part of the agreement, Microsoft will pay 3.79 billion euros for Nokia’s devices division and 1.65 billion euros for patents, according to a statement from the companies. The all-cash transaction, subject to Nokia investors’ approval, is expected to be completed in the first quarter of 2014. JPMorgan Chase & Co. advised Nokia on the transaction, while Goldman Sachs Group Inc. worked with Microsoft.
‘Big Transformation’
Nokia said it will book a gain of 3.2 billion euros, with the sale “significantly” accretive to earnings. It also said it aims to return its debt, which is ranked junk by all three major rating companies, to an investment grade. Chairman Risto Siilasmaa, who will become Nokia’s interim CEO, said the company may return excess capital to shareholders.“It’s a big transformation, but that’s what you’ve got to do in the tech business to move forward,” Ballmer told Tom Keene on Bloomberg Television’s “The Pulse.”
Microsoft said it is confident of getting the deal approved by early next year. The transaction will shave 12 cents a share off earnings in the current fiscal year, or 8 cents excluding some items, the company said. In 2015, the cost will be 6 cents based on generally accepted accounting principles. Excluding some costs, the deal will add to profit that year.
Microsoft also expects to get more profit for every device sold -- more than $40 a unit for smartphones, compared with the less than $10 in gross profit it currently gets for Windows Phone sold by Nokia. That doesn’t include the costs of marketing and development, though.
Cost Savings
Based on generally accepted accounting principles, the transaction will add to earnings in fiscal 2016, Microsoft said. The company expects to have annual cost savings of $600 million 18 months after the deal closes.The Microsoft purchase was the second major deal to be announced during the U.S. Labor Day holiday yesterday. Verizon Communications Inc. agreed to pay $130 billion for Vodafone Group Plc’s stake in their U.S. wireless venture in the biggest transaction in more than a decade.
The Microsoft-Nokia deal is the largest for a wireless device maker after Google’s purchase of Motorola’s handset unit in 2012, according to data compiled by Bloomberg. For Microsoft, the deal including the payment to license Nokia’s patents is its second-biggest behind the $8.5 billion purchase of Internet telephone company Skype in 2011.
Motorola Comparison
Microsoft agreed to pay about 0.35 times annual revenue, compared with the median of about 1.4 times for 60 wireless equipment-maker deals tracked by Bloomberg. That also compares with the 0.77 times revenue Google paid for Motorola Mobility, the data show.Google paid about 1.3 times annual operating income for the handset maker, while Nokia’s device and services business reported an operating loss last year, according to the data.
With the latest sale, the original pioneers in the mobile-phone industry -- Motorola, Nokia and Ericsson AB -- have all ceased to be independent handset manufacturers or given up on the business. BlackBerry Ltd. said last month it’s considering putting itself up for sale. Its shares advanced less than 1 percent to $10.21 in today’s trading.
Microsoft, meanwhile, becomes the last major developer of smartphone operating systems to get into manufacturing. Apple makes its own handsets, which use its iOS operating system. Google’s acquisition of Motorola Mobility gave it its own lineup of phones.
Surface Tablet
Microsoft’s other recent significant move into hardware -- the Surface tablet -- has trailed expectations and the company wrote down inventory last quarter.To break even on an operating basis, Microsoft will need Nokia to sell about 50 million smartphones a year, it said in a presentation. Nokia has a run-rate of about 30 million units. In the second quarter, Nokia sold 7.4 million smartphones under the Lumia line.
Microsoft acquired the Lumia brand to use with smartphones, while it will license the Nokia brand to use with low-end phones for 10 years, Elop said at a press briefing today. Microsoft will later decide what to call its future smartphones.
Microsoft will face a balancing act owning Nokia and keeping its other hardware partners, including HTC Corp. (2498) and Samsung Electronics Co., committed to its Windows Phone. Aiming to reassure other phone makers that Microsoft will still support them, Ballmer said that the company was “100 percent” committed to helping its manufacturing partners.
Ballmer declined to say whether Elop would become CEO, or had been a candidate to succeed him.
Microsoft Tie-Up
Ballmer called Nokia’s Siilasmaa shortly after the new year to initiate discussions on an acquisition and the two met in February at the Mobile World Congress in Barcelona, according to Microsoft. Talks heated up in recent months and a deal was lined up before Ballmer announced his retirement last month, the company said.Microsoft and Nokia have had a close relationship through Elop, who had run Microsoft’s Office unit. He left the software maker in September 2010 to take the top job at Nokia.
At the time, Elop likened Nokia’s position to a man standing on a burning oil platform on the verge of being engulfed in flames, facing the option of staying aboard or jumping to the ocean to have a chance to survive.
In February 2011, Elop struck a deal with Ballmer to switch Nokia’s smartphones from its own Symbian operating system to Windows Phone. In exchange, Microsoft ponied up more than $1 billion to pay for Nokia marketing and developing products on Windows.
Losing Share
Nokia had the largest share of the mobile phone handset market until it was overtaken by Samsung (005930) in 2012, according to data compiled by Bloomberg.Still, Nokia remains a top seller of traditional mobile phones -- models that are more popular in developing markets. In total shipments, the company ranks second to Samsung among device manufacturers. Samsung accounted for 26 percent of shipments last quarter, while Nokia had 14 percent. Apple came in third with 7.2 percent.
After the sale to Microsoft, Nokia’s biggest business will be network equipment, which it recently fully took over from Siemens AG (SIE) and renamed Nokia Solutions and Networks. The unit competes with Ericsson, Alcatel-Lucent as well as China’s Huawei Technologies Co. and ZTE Corp. (763)
Ericsson jumped 5 percent to 82.50 kronor in Stockholm. Alcatel-Lucent, which under new CEO Michel Combes is streamlining its business, added 9.2 percent to 2.20 euros in Paris trading.
Mapping Unit
Nokia said it will also keep its mapping and location services unit, called Here, and its technology development and licensing division.“Nokia has a highly evolved device design and manufacturing process which will benefit Microsoft greatly,” said Al Hilwa, an analyst at research firm IDC. “This is simply the fastest path in front of Microsoft to achieve something like Apple’s vision on devices.”
Contributed by Bloomberg
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Tuesday, 3 September 2013
Monday, 2 September 2013
An eventful week on the TPPA
Last week saw a series
of important events on the hot topic of Trans-Pacific Partnership
Agreement, with the official round in Brunei and a round table in Kuala
Lumpur, leading to the question: What next?
LAST week saw many important developments on the Trans-Pacific Partnership Agreement (TPPA).
The 19th round of the negotiations concluded in Brunei after an intense week. It emerged that many issues are still controversial and that the target of signing the treaty by year end cannot be met.
Malaysia’s tone at the negotiations has also changed, with Inter-national Trade and Industry Minister Datuk Seri Mustapa Mohamed informing his counter parts of the domestic opposition to the TPPA and various issues which Malaysia has problems with.
Malaysia’s negotiators earned bouquets from NGOs for tabling a new proposal that tobacco control measures should be excluded altogether from TPPA disciplines.
Meanwhile in Kuala Lumpur, a roundtable workshop on the TPPA brought together 200 people. Keynote speaker Tun Dr Mahathir Mohamad reaffirmed his opposition to the TPPA and urged the Government not to join it.
The Aug 26-27 round table was organised by the MTEM (Malay Economic Action Council) and the Perdana Leadership Foundation.
The participants came up with 75 “red lines”, or positions that are non-negotiatble, that they would like the Government to adopt.
Prime Minister Datuk Seri Najib Tun Razak received the “red lines” document from the MTEM leadership at the group’s Hari Raya open house on Aug 28.
Mustapa also announced that the Government was going ahead with organising two cost benefit studies on the TPPA’s impacts on national interests and on SMEs and the bumiputra economy. Only if there are net benefits will the country sign the treaty.
It looks like the strong views voiced by various groups and politicians have influenced the Government’s thinking.
A strong sign of this was at the ministerial meeting of TPPA countries in Brunei on Aug 22-23. Chaired by the American Trade Represen-tative, the meeting was supposed to give ministers the chance to clear the contentious issues that the technical negotiators could not settle, and thus pave the way to a quick conclusion.
Instead, the ministerial meeting turned into an anti-climax as some ministers did not attend, and some others who attended did not stay for the press conference that lasted only 20 minutes.
And instead of clearing hard issues, the ministerial meeting gave a chance to some ministers to highlight contentious issues themselves.
Mustapa was one of those who took that opportunity. “I drew attention to the growing discomfort domestically arising from Malaysia’s participation in the TPP negotiations, the outreach activities that had been undertaken and the concerns raised by the various stakeholders, specifically on the issue of lack of transparency and disclosure of information on the texts being negotiated,” said the minister in a statement.
He also highlighted the difficulties Malaysia has on government procurement, the need for exclusions of SMEs and preferences for bumiputra which are required for the Malaysian government to continue with its socio-economic development goals and affirmative action policy.
He also underscored that Malaysia had serious difficulties with the current proposal on state-owned enterprises, which is seen to go beyond the stated objective of creating a level playing field as it had serious implications for Malaysian SOEs.
And on intellectual property, he reiterated Malaysia’s strong position on access to affordable medicines while on environment, that there was a need to safeguard the state governments’ jurisdictions.
The following day, Malaysia also caused quite a stir by putting forward a new proposal to totally exclude tobacco control measures from the disciplines of the whole TPPA.
This was warmly welcomed by public health groups, which then called on the US and other countries to agree to the Malaysian position.
At the MTEM round table in Kuala Lumpur, Dr Mahathir gave a 40-minute critique of the TPPA, the problems it would create for domestic policy and why Malaysia can expand its trade even without such agreements. He ended with a strong call to the Government not to sign the treaty.
For two days, the participants discussed specific TPPA issues in six breakout groups and at the closing plenary they adopted 75 “red lines” which they called on the Government to take on as part of its negotiating positions.
The “red lines” include a rejection of the investor-state dispute settlement system, the exclusion of the chapters or sections on government procurement and state-owned enterprises, and demands that the intellectual property chapter does not require obligations that are stronger than the World Trade Organisation’s rules, especially with regard to patents and medicines, and copyright issues.
It should be noted that some of these civil society “red lines” correspond to the concerns that Mustapa had taken up at the TPPA ministerial meeting.
It looks as though the Govern-ment’s position has been affected by the voices of civil society, business and experts.
A key question, of course, is whether in taking up these issues, the minister and the negotiators will make their own “red lines” out of the concerns.
The next question is whether the other TPPA participants will accommodate themselves to Malaysia’s positions. And if not, then what happens next.
In any case, it has been a very interesting week or 10 days, full of events and developments, on the hot issue of TPPA, both at the official meeting and on the home front.
Contributed by Martin Khor Global Trends:
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LAST week saw many important developments on the Trans-Pacific Partnership Agreement (TPPA).
The 19th round of the negotiations concluded in Brunei after an intense week. It emerged that many issues are still controversial and that the target of signing the treaty by year end cannot be met.
Malaysia’s tone at the negotiations has also changed, with Inter-national Trade and Industry Minister Datuk Seri Mustapa Mohamed informing his counter parts of the domestic opposition to the TPPA and various issues which Malaysia has problems with.
Malaysia’s negotiators earned bouquets from NGOs for tabling a new proposal that tobacco control measures should be excluded altogether from TPPA disciplines.
Meanwhile in Kuala Lumpur, a roundtable workshop on the TPPA brought together 200 people. Keynote speaker Tun Dr Mahathir Mohamad reaffirmed his opposition to the TPPA and urged the Government not to join it.
The Aug 26-27 round table was organised by the MTEM (Malay Economic Action Council) and the Perdana Leadership Foundation.
The participants came up with 75 “red lines”, or positions that are non-negotiatble, that they would like the Government to adopt.
Prime Minister Datuk Seri Najib Tun Razak received the “red lines” document from the MTEM leadership at the group’s Hari Raya open house on Aug 28.
Mustapa also announced that the Government was going ahead with organising two cost benefit studies on the TPPA’s impacts on national interests and on SMEs and the bumiputra economy. Only if there are net benefits will the country sign the treaty.
It looks like the strong views voiced by various groups and politicians have influenced the Government’s thinking.
A strong sign of this was at the ministerial meeting of TPPA countries in Brunei on Aug 22-23. Chaired by the American Trade Represen-tative, the meeting was supposed to give ministers the chance to clear the contentious issues that the technical negotiators could not settle, and thus pave the way to a quick conclusion.
Instead, the ministerial meeting turned into an anti-climax as some ministers did not attend, and some others who attended did not stay for the press conference that lasted only 20 minutes.
And instead of clearing hard issues, the ministerial meeting gave a chance to some ministers to highlight contentious issues themselves.
Mustapa was one of those who took that opportunity. “I drew attention to the growing discomfort domestically arising from Malaysia’s participation in the TPP negotiations, the outreach activities that had been undertaken and the concerns raised by the various stakeholders, specifically on the issue of lack of transparency and disclosure of information on the texts being negotiated,” said the minister in a statement.
He also highlighted the difficulties Malaysia has on government procurement, the need for exclusions of SMEs and preferences for bumiputra which are required for the Malaysian government to continue with its socio-economic development goals and affirmative action policy.
He also underscored that Malaysia had serious difficulties with the current proposal on state-owned enterprises, which is seen to go beyond the stated objective of creating a level playing field as it had serious implications for Malaysian SOEs.
And on intellectual property, he reiterated Malaysia’s strong position on access to affordable medicines while on environment, that there was a need to safeguard the state governments’ jurisdictions.
The following day, Malaysia also caused quite a stir by putting forward a new proposal to totally exclude tobacco control measures from the disciplines of the whole TPPA.
This was warmly welcomed by public health groups, which then called on the US and other countries to agree to the Malaysian position.
At the MTEM round table in Kuala Lumpur, Dr Mahathir gave a 40-minute critique of the TPPA, the problems it would create for domestic policy and why Malaysia can expand its trade even without such agreements. He ended with a strong call to the Government not to sign the treaty.
For two days, the participants discussed specific TPPA issues in six breakout groups and at the closing plenary they adopted 75 “red lines” which they called on the Government to take on as part of its negotiating positions.
The “red lines” include a rejection of the investor-state dispute settlement system, the exclusion of the chapters or sections on government procurement and state-owned enterprises, and demands that the intellectual property chapter does not require obligations that are stronger than the World Trade Organisation’s rules, especially with regard to patents and medicines, and copyright issues.
It should be noted that some of these civil society “red lines” correspond to the concerns that Mustapa had taken up at the TPPA ministerial meeting.
It looks as though the Govern-ment’s position has been affected by the voices of civil society, business and experts.
A key question, of course, is whether in taking up these issues, the minister and the negotiators will make their own “red lines” out of the concerns.
The next question is whether the other TPPA participants will accommodate themselves to Malaysia’s positions. And if not, then what happens next.
In any case, it has been a very interesting week or 10 days, full of events and developments, on the hot issue of TPPA, both at the official meeting and on the home front.
Contributed by Martin Khor Global Trends:
Related posts:
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Looming danger on contrast and competition on economic models
ASEAN plans world's largest trading bloc in Asia RCEP, and the US Secrecy in TPP
Sunday, 1 September 2013
The sheriff threatens to strike Syria
People against war: Supporters of the anti-war group Act Now to Stop War and End Racism (ANSWER) Coalition participate in a rally in Washington DC, in opposition to a possible US military strike in Syria. – EPA
For nearly all countries including the US, a military attack on Syria will only make things worse.
TEN years after US President George W. Bush attacked Iraq, his successor Barack Obama is set to do it with Syria.
A secular Muslim autocrat in West Asia, Iraqi President Saddam Hussein, was accused of possessing weapons of mass destruction (WMDs) so he “had” to be removed. Back then, Senator Obama had accused Bush of an unjustifiable and unnecessary war based on a flimsy pretext.
Now a secular Muslim autocrat in West Asia, Syrian President Bashar Assad, stands accused of using chemical WMDs. No evidence against Bashar had been presented before Washington’s decision to punish Syria.
Obama’s supporters may say it is a little different this time – just a little, though not much. Saddam’s case involved accusations of WMD possession, while Bashar’s involves accusations of actual use.
But what real difference is there once the bombs begin to drop? The arguments and circumstantial “evidence” so far are insufficient to support even a misdemeanour in a civil court, let alone a serious action such as war.
Just as the so-called evidence against Saddam’s Iraq was false, the same may be said of the case against Syria so far.
At a time when the US needed to convince the international community to support action against Syria, no evidence against Bashar had been offered. It nonetheless seemed sufficient to get Washington on the warpath again.
The White House says there is no doubt that Syria had used chemical weapons, but doubts persist. The Syrian government insists it did no such thing.
The issue concerns allegations of chemical weapons use in an area controlled by rebel forces just outside Damascus on August 21. The result – about 1400 civilian deaths.
Critics of military action ask why Syria had agreed to a UN arms inspection if it had just used banned chemical weapons, why it should target civilians including children who were not against it, and why it should do so knowing the likely international consequences. They also question the reliability of the evidence linking the incidents to the Syrian government, and the credibility of the source of the alleged evidence itself.
At the same time, motives also exist for falsifying evidence to blame Syria, so that US military action would weaken or dislodge Bashar. The beneficiaries are within and outside Syria.
The strongest “evidence” against Damascus comes from Israel, specifically Unit 8200 of the Israeli Defense Forces that supposedly intercepted the Syrian military’s electronic communications. According to Prof. John Schindler at the US Naval War College, Israel then fed this information to Washington and London for follow-up action against Syria.
Bashar’s Syria is the latest Muslim country in West Asia to be undermined by Israel, following Iraq, Libya and Egypt. In quietly promoting Western military action against these countries, Israel need not spend a single dollar or risk a single soldier’s life.
Western countries inclined to military action often find they have to depend on Israel. They lack the kind of intelligence information on the ground that Israel has, regardless of whether that information is trustworthy.
This also happens to benefit various militant groups hoping to seize power after Bashar – up to a point. Israel expects them to disagree among themselves and neutralise one another as Syria disintegrates, leaving the door open to Israeli interests.
In a US poll on Friday, 52% of respondents believe that once Bashar falls, Syria would be split. Over the medium and long terms, Israel would be the only beneficiary of another dismembered Muslim nation.
Within Syria, the considerable but still limited military strength of the various opposition groups has meant an armed stalemate while Bashar remains in office. The only factor likely to make a difference is Western military intervention, if that could be “arranged”.
On Thursday, an Associated Press news report said Washington remained uncertain where Syria stored its chemical weapons. US intelligence officials acknowledged that proof of Syria’s use of these weapons was still unclear, and that they were even less certain of Bashar’s guilt than they were of Saddam’s.
On the same day, a report released by the British government revealed that London did not understand why the Syrian government would want to use chemical weapons as alleged. Yet Britain was prepared to support the US position that Syria was guilty, nonetheless.
Meanwhile, the overwhelming majority of international opinion is set against military action. This includes the general populations in Britain and the US.
The US Congress is divided on the issue and insists that its prior approval is needed, while the British Parliament on Thursday voted to oppose military action. But US officials have said none of this would change their plans.
Russia says no evidence exists of chemical weapons use, much less to link the Syrian government to such use. China says the UN Security Council should not be pressured on deadlines to approve any action before UN inspections are complete.
UN Secretary-General Ban Ki-moon appealed for calm and for enough time for UN weapons inspectors in Syria to complete their job. Their mission ends this weekend.
Former chief UN arms inspector Hans Blix, in a similar situation a decade ago when the US had already decided to attack Iraq, now questions the right of any country to attack Syria even if it had actually used chemical weapons.
Despite the international ban on chemical weapons, no international law obligates any power to attack a country for the use of WMDs. The US itself is not restrained against its first use of nuclear WMDs.
The official US line is that “punishing” Syria is not intended to topple Bashar. In the heat of hostilities, however, nobody can guarantee there would be no regime change, especially when US forces meet with resistance and risk international embarrassment for not achieving anything substantial.
The US case for an attack also claims the “immorality” of Syria’s alleged chemical weapons use. But the moral argument is defeated when an attack could result in more civilian deaths and suffering than the supposed use of chemical weapons.
The International Committee of the Red Cross has warned that any action that escalates the Syrian conflict would only result in more civilian suffering. Unesco said the looting of Syria’s rich cultural heritage had already begun.
White House spokesman Jay Carney insisted that logically, there was no doubt about the Syrian government’s guilt. But logic remains the biggest impediment to the US argument.
Attacking another country can be legitimate only in a case of self-defence or when approved by the UN Security Council. The latter requires endorsement by all the UNSC’s Permanent Five members.
A US attack cannot cite self-defence because Syria did not attack the US. Neither will there be UNSC approval, since Russia and China are likely to vote against.
Nonetheless, the US proceeded to attack Iraq in 2003 even after China abstained. Obama may now outdo Bush by attacking Syria when both Russia and China object.
US bombs may also hit chemical weapons stockpiles, releasing poison gas and killing many more people. But then only Syrians would be affected.
Obama’s standing in the Muslim world has declined considerably since its height with his 2009 Cairo speech. Where actions speak louder than words, that decline is also happening in the developing world in general.
BUNN NAGARA is a Senior Fellow at the Institute of Strategic and International Studies (ISIS) Malaysia
For nearly all countries including the US, a military attack on Syria will only make things worse.
TEN years after US President George W. Bush attacked Iraq, his successor Barack Obama is set to do it with Syria.
A secular Muslim autocrat in West Asia, Iraqi President Saddam Hussein, was accused of possessing weapons of mass destruction (WMDs) so he “had” to be removed. Back then, Senator Obama had accused Bush of an unjustifiable and unnecessary war based on a flimsy pretext.
Now a secular Muslim autocrat in West Asia, Syrian President Bashar Assad, stands accused of using chemical WMDs. No evidence against Bashar had been presented before Washington’s decision to punish Syria.
Obama’s supporters may say it is a little different this time – just a little, though not much. Saddam’s case involved accusations of WMD possession, while Bashar’s involves accusations of actual use.
But what real difference is there once the bombs begin to drop? The arguments and circumstantial “evidence” so far are insufficient to support even a misdemeanour in a civil court, let alone a serious action such as war.
Just as the so-called evidence against Saddam’s Iraq was false, the same may be said of the case against Syria so far.
At a time when the US needed to convince the international community to support action against Syria, no evidence against Bashar had been offered. It nonetheless seemed sufficient to get Washington on the warpath again.
The White House says there is no doubt that Syria had used chemical weapons, but doubts persist. The Syrian government insists it did no such thing.
The issue concerns allegations of chemical weapons use in an area controlled by rebel forces just outside Damascus on August 21. The result – about 1400 civilian deaths.
Critics of military action ask why Syria had agreed to a UN arms inspection if it had just used banned chemical weapons, why it should target civilians including children who were not against it, and why it should do so knowing the likely international consequences. They also question the reliability of the evidence linking the incidents to the Syrian government, and the credibility of the source of the alleged evidence itself.
At the same time, motives also exist for falsifying evidence to blame Syria, so that US military action would weaken or dislodge Bashar. The beneficiaries are within and outside Syria.
The strongest “evidence” against Damascus comes from Israel, specifically Unit 8200 of the Israeli Defense Forces that supposedly intercepted the Syrian military’s electronic communications. According to Prof. John Schindler at the US Naval War College, Israel then fed this information to Washington and London for follow-up action against Syria.
Bashar’s Syria is the latest Muslim country in West Asia to be undermined by Israel, following Iraq, Libya and Egypt. In quietly promoting Western military action against these countries, Israel need not spend a single dollar or risk a single soldier’s life.
Western countries inclined to military action often find they have to depend on Israel. They lack the kind of intelligence information on the ground that Israel has, regardless of whether that information is trustworthy.
This also happens to benefit various militant groups hoping to seize power after Bashar – up to a point. Israel expects them to disagree among themselves and neutralise one another as Syria disintegrates, leaving the door open to Israeli interests.
In a US poll on Friday, 52% of respondents believe that once Bashar falls, Syria would be split. Over the medium and long terms, Israel would be the only beneficiary of another dismembered Muslim nation.
Within Syria, the considerable but still limited military strength of the various opposition groups has meant an armed stalemate while Bashar remains in office. The only factor likely to make a difference is Western military intervention, if that could be “arranged”.
On Thursday, an Associated Press news report said Washington remained uncertain where Syria stored its chemical weapons. US intelligence officials acknowledged that proof of Syria’s use of these weapons was still unclear, and that they were even less certain of Bashar’s guilt than they were of Saddam’s.
On the same day, a report released by the British government revealed that London did not understand why the Syrian government would want to use chemical weapons as alleged. Yet Britain was prepared to support the US position that Syria was guilty, nonetheless.
Meanwhile, the overwhelming majority of international opinion is set against military action. This includes the general populations in Britain and the US.
The US Congress is divided on the issue and insists that its prior approval is needed, while the British Parliament on Thursday voted to oppose military action. But US officials have said none of this would change their plans.
Russia says no evidence exists of chemical weapons use, much less to link the Syrian government to such use. China says the UN Security Council should not be pressured on deadlines to approve any action before UN inspections are complete.
UN Secretary-General Ban Ki-moon appealed for calm and for enough time for UN weapons inspectors in Syria to complete their job. Their mission ends this weekend.
Former chief UN arms inspector Hans Blix, in a similar situation a decade ago when the US had already decided to attack Iraq, now questions the right of any country to attack Syria even if it had actually used chemical weapons.
Despite the international ban on chemical weapons, no international law obligates any power to attack a country for the use of WMDs. The US itself is not restrained against its first use of nuclear WMDs.
The official US line is that “punishing” Syria is not intended to topple Bashar. In the heat of hostilities, however, nobody can guarantee there would be no regime change, especially when US forces meet with resistance and risk international embarrassment for not achieving anything substantial.
The US case for an attack also claims the “immorality” of Syria’s alleged chemical weapons use. But the moral argument is defeated when an attack could result in more civilian deaths and suffering than the supposed use of chemical weapons.
The International Committee of the Red Cross has warned that any action that escalates the Syrian conflict would only result in more civilian suffering. Unesco said the looting of Syria’s rich cultural heritage had already begun.
White House spokesman Jay Carney insisted that logically, there was no doubt about the Syrian government’s guilt. But logic remains the biggest impediment to the US argument.
Attacking another country can be legitimate only in a case of self-defence or when approved by the UN Security Council. The latter requires endorsement by all the UNSC’s Permanent Five members.
A US attack cannot cite self-defence because Syria did not attack the US. Neither will there be UNSC approval, since Russia and China are likely to vote against.
Nonetheless, the US proceeded to attack Iraq in 2003 even after China abstained. Obama may now outdo Bush by attacking Syria when both Russia and China object.
US bombs may also hit chemical weapons stockpiles, releasing poison gas and killing many more people. But then only Syrians would be affected.
Obama’s standing in the Muslim world has declined considerably since its height with his 2009 Cairo speech. Where actions speak louder than words, that decline is also happening in the developing world in general.
BUNN NAGARA is a Senior Fellow at the Institute of Strategic and International Studies (ISIS) Malaysia
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