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Showing posts with label Italy. Show all posts
Showing posts with label Italy. Show all posts

Tuesday, October 12, 2021

Singapore and Japan passports tied for most powerful in the world, Vaccination rates for Asean

 

Holders of Singapore and Japan passports can travel without a prior visa to 192 destinations.PHOTO: ST FILE


SINGAPORE - Singapore and Japan have the most powerful passports in the world, according to the latest update of a global index.

Holders of passports from the two countries can travel without a prior visa to 192 destinations, it noted last week.

This is a change from April, when Japan outstripped Singapore in having the world's most powerful passport, with Japanese passport holders able to travel to 193 destinations without a prior visa, while Singaporean passport holders had such access to 192 destinations.

In the latest update, South Korea and Germany are tied for second place, with such access to 190 countries. The two countries had been tied for third place in April, with access to 191 destinations.

Finland, Italy, Luxembourg and Spain are in third place, with access to 189 nations; while Austria and Denmark are in fourth, with access to 188 countries.

The index, administered by Henley & Partners and updated throughout the year, ranks passport power according to how many destinations their holders can travel to without a prior visa.

The global citizenship and residence advisory firm noted that the gap in travel freedom is at its widest since the index was started in 2006, with Singaporean and Japanese passport holders able to visit 166 more destinations than Afghan citizens, who can travel to only 26 nations worldwide without acquiring a visa in advance.

Britain and the United States have been facing eroding passport strength since they held the top spot in 2014. Both remain tied in seventh place, but have a score of 185, down from 187 in the first quarter of the year.

Egypt is ranked 97th, with its citizens having access to 51 countries without a prior visa, while Kenya is 77th, with access to 72 destinations visa-free.

Meanwhile, Singapore will be allowing vaccinated travellers to travel to nine more countries and return without quarantine, the authorities announced last Saturday (Oct 9).

From Oct 19, vaccinated travellers from Singapore will be able to fly to Canada, Denmark, France, Italy, the Netherlands, Spain, Britain and the US.

The scheme will be extended to South Korea from Nov 15, it was announced last Friday.

These are in addition to Brunei and Germany, which Singapore had already approved for quarantine-free travel for those fully vaccinated.

In total, there will be 11 countries that Singapore approves for quarantine-free travel.

 
Based on data from the International Air Transport Association, the index showed that countries in the global north with high-ranking passports have enforced some of the most stringent inbound Covid-19 travel restrictions.

On the other hand, many countries with lower-ranking passports have relaxed their borders without seeing this openness reciprocated, it noted.

Henley & Partners chairman Christian Kaelin said: "It is pivotal that advanced nations consider revising their somewhat exclusive approach to the rest of the world, and reform and adapt to overcome the competition and not miss the opportunity to embrace the potential."

 
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S'pore & Japan have most powerful passports for visa-free travel to 192 countries

 

Vaccination rates for Asean (%)

Source: Centre for Strategic & International Studies, Aminvestment Bank
 

Malaysia is ranked the 3rd highest among Asean countries. 

 This paves the way for more economic activities to resume although it may not be a full recovery, matching that of pre-covid times.

Analysts are positive on this as the high vaccination rate is a leading indicator that economic activities should recover faster in Malaysia as compared to most countries in Asean.

 

Monday, December 7, 2020

GT investigates: Seeking for virus origin


https://youtu.be/X0dzqLuQPrU 

 Frequent outbreaks triggered by imported frozen products; reports suggesting traces of coronavirus found elsewhere earlier than Wuhan… so is COVID-19 outbreak in Wuhan also result of imported cold-chain products? Check GT special investigative report… 

 


International cooperation urged


Although those virologists have pictured a clear route map to trace the origin of the virus, the real path to finding the origin is laden with difficulties.

The anonymous expert said that in terms of tracing the virus origin, the momentum for international scientists to cooperate has retrogressed compared with the pre-COVID-19 period.

“Scientists are reluctant to become involved in politics, they are eyeing international cooperation. Yet researchers from all over the world are acting with caution, avoiding troubles, and refusing casual communication. I don’t think it’s an ideal atmosphere for cooperation.”

This has drawn attention from international bodies. WHO Director-General Tedros Adhanom Ghebreyesus urged countries on November 30 not to politicize the hunt for the origins of the new coronavirus, saying that would only create barriers to learning the truth.

When talking to Tedros in September, director of China's National Health Commission Ma Xiaowei vowed to enhance cooperation with the WHO on virus prevention, origin tracing and vaccine development. China is pushing forward the work on the virus origin tracing, and is willing to strengthen cooperation and communication with the WHO, Ma said.

Chinese Foreign Ministry spokesperson Zhao Lijian said on November 24 that while tracing the origin domestically, China has been earnestly implementing WHA resolutions.

"We are the first to invite WHO experts in for origin-tracing cooperation." Zhao said, adding that "We hope all relevant countries will adopt a positive attitude and cooperate with WHO like China does, making contributions to global origin-tracing and anti-epidemic cooperation."

“International communication on the virus origin should be frequent and open for all. But some countries weighed in and complicated the issue,” said Yang, who noted that the world has achieved great progress in fighting COVID-19 in the past year, including treatment of the disease and vaccine R&D.

Tracing the virus origin should not be a battle against each other; instead, an information, data sharing mechanism is helpful to bring the virus under control, Yang said.

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Saturday, February 29, 2020

Covid-19 reaches the West


https://youtu.be/F_Jq7ItdHtA

Tourists wearing protective masks walks by the Duomo in central Milan on February 27,2020 amid fears over the spread of the novel Coronavirus. - The number of COVID-19 infections in Italy, the hardest hit country in Europe, hits the 400 mark late on February 26, with 12 deaths. (Photo by Miguel MEDINA/ AFP)

But keep cool, negative volatility will likely be followed by positive volatility


The coronavirus (Covid-19) outbreak has officially reached Western shores.

Since last week, the virus has spread to Europe, Brazil and the Middle East.

New cases have emerged across Europe.

There have been more than 81,000 people infected with nearly 3,000 deaths so far.

Just the previous Wednesday on Feb 19, stocks in the US were complacently at record highs, never mind that Asian markets were roiling and taking huge hits, thanks to the coronavirus that first took roots in Wuhan, China.

Asia has been battling this disease since January. Markets have been volatile but have since recovered as the number of infections have reduced and governments have been diligent at handling the disease.

It is like the domino effect, with the same reactions, panic and emotions that happened throughout Asia now migrating to the West.

It is almost deja-vu, seeing the fear and market reaction, no doubt the impact to the Dow and S&P 500 has a significantly larger impact.

The Covid-19’s largest impact is the fear it has transmitted with rapid speed.

In the US, stocks fell for a sixth straight day on Thursday, with the S&P 500 price index falling 4.4% and bringing this pullback officially into correction territory. On a six-day basis, the Dow Jones was down 13.4% at 25,766.64.

This plummet followed California governor Gavin Newsom’s revealing on Thursday that the state was monitoring 8,400 people for potential Covid-19 infections.

Adding to the bleak outlook, Goldman Sachs slashed its profit outlook and warned the outbreak could cost Donald Trump his reelection in November.

The MSCI all-country global index has dropped more than 7% over this six-day period. Considering stocks were at record highs the previous Wednesday, this is very harsh and painful.

Why, Tesla was all the hype earlier in February. It was US$901 on Feb 21, and new higher target prices were being touted by analysts, nevermind that the stock still didn’t have a price to earnings ratio.

In the last five days, Tesla’s share price had tumbled more than US$200 or 32.7% as of Thursday to close at US$679.

Don’t panic

For the average investor, panic has likely set in.

Whose confidence level would not be shaken with a 12% decline in the S&P 500 in six trading days?

Now talk of a 20% decline is starting to emerge.

Meanwhile the 10-year US treasury yield dropped below 1.3%, remaining in record-low territory.

The downward spiral in oil also continued with WTI crude toppling 2.71% to trade at US$47.41 per barrel on Thursday. Brent oil hovered at the US$51.42 level. So just barely two months into 2020, it is Covid-19 which has been responsible for crushing markets and dismantling profits across the globe.

Many have already slashed market forecasts for the year.

In the past two market stories featured on StarBizweek, readers would know that Fisher MarketMinder thinks that fears over the virus’ market impact are overdone. It thinks that this is part of a longer-running pattern prevalent throughout this bull market.

“The stock market will do what it does – rise and fall.

“If you’ve got a plan based on your risk tolerance and investment horizon, don’t let fear make you swerve in the wrong direction and lose traction.

“Panic is never a good investment strategy, ” says Fisher MarketMinder.

It adds that Covid-19 is grabbing attention because it is new and somewhat novel, but that doesn’t mean its economic effects far outweigh more familiar diseases.

The Center for Disease Control and Prevention estimates that there were 34,200 deaths in the United States from influenza during the 2018-2019 flu season.

For infections of Covid-19 outside of China, the mortality appears very low.

Furthermore, the people who are dying tend to be the old and immuno-suppressed or otherwise sick.

“Supply chain disruptions as officials work to contain the outbreak probably dent growth temporarily, but markets are efficient and likely pricing in these expectations as companies issue statements.

“Short-term volatility could linger, but patience should pay off, in our view, ” it adds.

As legendary investor Ben Graham once said, stocks are a voting machine in the short term and a weighing machine in the long term.

“Sentiment wins in the short term, but fundamentals matter most over more meaningful stretches.

“The ‘why’ and ‘how much’ behind sentiment swings strike us far less important.

“The emotional swing itself is what matters.

“Market fundamentals likely didn’t change on a dime seven days ago, ” says Fisher MarketMinder.

Thursday’s drop simply put US stocks back at mid-October levels.

Furthermore, the world hasn’t fundamentally changed.

While there is no way to know when this drop will end or how much further it will fall, no drop is permanent.

“Whether the rebound starts in days or weeks, whether it is fast or slow, if you have held on thus far, we think you ought to reap the good that comes with the bad.

“Corrections hurt your long-term returns only if you don’t participate in the rebounds that follow them.

“Selling may feel good at a time like this. But when you remove emotion from the equation, all it does is transform a market decline into an actual portfolio loss, ” says Fisher MarketMinder.

Another investor who is cheering is one of the smartest investors in the world, Warren Buffett, chairman and CEO of Berkshire Hathaway.

He says the stock market rout we’re witnessing today is “good for us.”

“We’re a net buyer of stocks over time, ” he says on CNBC.

“Most people are savers, they should want the market to go down.

“They should want to buy at a lower price.”

Buffett’s comments came as Dow futures were down by about 800 points or 3% on Monday as stocks around the world plunged as the Covid-19 outbreak escalated.

Regarding the coronavirus specifically, Buffett made clear that he is “not a specialist.” And he warns that “a very significant percentage of our businesses one way are affected.”

However, he reiterates that investors should be more focused on the long term, not the short term.

“If you’re buying a business, and that’s what stocks are... you’re gonna own it for 10 or 20 years, ” he says.

“The real question is has the 10-year or 20-year outlook for American businesses changed in the last 24 hours or 48 hours?” the legendary investor asks.

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Friday, April 20, 2012

Unemployment Fuels Debt Crisis

Job-seekers wait outside a job center before opening in Madrid, Spain. Spain’s jobless rate has more than doubled since 2008 after the collapse of a real estate market that fueled a decade of economic growth. Photographer: Angel Navarrete/Bloomberg

Surging unemployment rates from Spain to Italy and Greece are threatening efforts to quell the region’s debt crisis and keeping bond yields close to record premiums relative to benchmark German bunds. 

Joblessness is soaring as European nations reduce spending, igniting strikes and protests from Athens to Madrid. Unemployment in Spain surged to almost 24 percent, pushing the euro-region level to 10.8 percent in February, the highest in more than 14 years. Italy’s rate is at 9.3 percent, the most since 2001, hampering efforts to spur economic growth.

Deepening recessions in Italy and Spain contributed to a five-week slide in Italian and Spanish bonds as the shrinking tax base helped lead to both countries raising their deficit targets. The yield premium investors demand to hold Spanish 10- year debt over German bunds reached a four-and-a-half-month high this week.

“The higher the jobless rate, the more that has to be spent on benefits, creating the potential for a negative spiral,” said Christian Schulz, an economist at Berenberg Bank in London and a former ECB official.

Berenberg Bank predicts euro-region unemployment will peak at 11.5 percent in September, he said.

The extra yield investors demand to hold Spanish 10-year bonds rather than similar-maturity German securities was 411 basis points yesterday, compared with an average 130 during the past five years. The rate has risen more than 80 basis points this year. The spread was 376 basis points for Italy and 1,072 basis points for Portugal.

Youth Joblessness

Spain’s jobless rate has more than doubled since 2008 after the collapse of a real estate market that fueled a decade of economic growth. The country is now home to more than one third of the euro-region’s jobless and more than half of young people are out of work.

Hundreds of thousands of Spaniards protested on March 29 in a general strike against Prime Minister Mariano Rajoy’s overhaul of labor market rules and the deepest budget cuts in at least three decades that are pushing the economy deeper into its second recession since 2009.

“Spain faces formidable challenges, especially concerning youth unemployment,” European Union Economic and Monetary Affairs Commissioner Olli Rehn told lawmakers at the European Parliament in Strasbourg Wednesday.

Italy’s jobless rate rose to the highest in more than a decade in February and the International Monetary Fund forecast on April 17 that unemployment will reach 9.9 percent this year. Italian bonds reversed morning gains yesterday after the government cut its growth forecasts and abandoned a goal to balance the budget next year.

Estimate Revisions

Italy’s gross domestic product will contract 1.2 percent this year, more than twice the previous forecast, and the deficit will end next year at 0.5 percent, more than the 0.1 percent previously forecast. The Italian announcement came six weeks after Rajoy abandoned Spain’s deficit goal for next year.

Joblessness in both countries may worsen as the recession deepens and rigid labor market laws are overhauled. Rajoy passed in February a plan to make it cheaper for employers to let workers go, while Italy gave companies more leeway to fire workers without fear of court-ordered reinstatements.

“High unemployment means a very dissatisfied electorate and makes it difficult to get stuff done,” said Padhraic Garvey, head of developed market debt at ING Groep NV in Amsterdam. “It makes it significantly more difficult to pass austerity measures and exacerbates a difficult situation.”

Rajoy’s Challenges

Rajoy probably will face further unrest if he’s forced to implement more budget cuts to meet ambitious deficit goals. His government has now pledged to reduce the shortfall to 5.3 percent of GDP in 2012 from 8.5 percent in 2011 and by more than 2 percentage points next year to get within the EU’s 3 percent limit. Despite a raft of austerity last year, the country achieved a deficit reduction of less than 1 percentage point.

Falling joblessness in Germany underscores the widening gap between the resilience of the euro-region’s largest economy and the so-called periphery. The nation’s adjusted jobless rate slipped in March to a two-decade low of 6.7 percent, according to the statistics office. While the 17-member euro-region economy will shrink 0.4 percent in 2012, Germany’s economy probably will grow 0.7 percent, according to economists’ forecasts compiled by Bloomberg.

“The divergence between Germany and the other economies is here to stay,” said Christoph Rieger, head of interest-rate strategy at Commerzbank AG in Frankfurt. “It provides a structural reason for spreads to stay wider, regardless of what other progress is made on containing the crisis.”

Greek Elections

In Greece, where official data showed unemployment climbed to 21 percent in January, elections scheduled for May 6 may produce a hung parliament, raising questions about the nation’s ability to implement its austerity measures. The nation’s 2 percent bond due in February 2023 trades at about 25 cents on the euro.

In Portugal, where the government forecasts the unemployment rate will average 13.4 percent this year, up from 12.7 percent in 2011, Soares da Costa SGPS SA, Portugal’s third- biggest publicly traded construction company, said it’s expanding abroad and eliminating jobs at home, where it faces a slump in government infrastructure spending. 

“High and rising unemployment is likely to impact at a political level and may make the reforms more difficult to undertake,” said Eric Wand, a fixed-income strategist at Lloyds Banking Group Plc in London. “If the political desire to reform comes in to doubt, then the market wouldn’t like that. There’s good scope for the crisis to get worse in the near term, the economies are still on pretty shaky ground and there’s a lot of political risk.”

By Daniel Tilles at dtilles@bloomberg.net.

Sunday, November 20, 2011

G20, Apec without gusto; Asean for peace; US cold war against China!


G-20, Apec summits – without gusto!

What Are We To Do By TAN SRI LIN SEE-YAN

WHEN President Sarkozy of France assumed the presidency of G-20 for 2011, I was delighted for alas, international monetary reform would take centre stage. That's what he promised. I felt it's high time leadership was put to bear on an issue of critical international concern, where the Americans had for years “ feared to tread,” for obvious reasons: to protect US national interest to preserve (as long as feasible) an archaic international monetary system with the US dollar as its centrepiece and which has outlasted its usefulness.

But this was not to be. Political turmoil in Greece had added fuel to the European financial chaos, with the G-20 meeting scrambling to arrange (and rearrange) emergency measures aimed at preventing the eurozone sovereign debt crisis from contaminating the rest of Europe and the global economy. As they gathered in Cannes on Nov 3-4, leaders from G-20 faced high expectations to confront the festering European turmoil. Instead, the two-day summit in this Mediterranean resort largely resulted in more pressure on Europe to respond more forcefully. The United States, China and others were worried that Europeans may fail to avert a collapse of the Greek economy, bringing with it sovereign default and corporate bankruptcies that would inevitably send shock waves through the global financial system. Priority was placed to quickly resolve the evolving European crisis. It was clear the weight of the crisis had overshadowed other policy goals of the summit.

G-20 and France

France's president had hoped to use the G-20 to burnish his reputation as a global statesman. I gathered Sarkozy had intended to focus the G-20 agenda on French ideas for reducing global imbalances. Instead, he found himself in the midst of a gathering euro-storm, now focused on Greece's sudden decision to call a referendum on its bailout.

Behind the scene, France was itself subject to growing economic stress. The market's verdict on France's finances had since grown increasingly harsh. The spread between the yields on German & French 10-year AAA government bonds widened to a euro-era record of 1.95%-age points. France is a triple-A rated nation in name only because its debt is in danger of spiralling out of control.

Forecast by Fitch Ratings at 86.8% of gross domestic product (GDP) in 2013, it is the highest among AAA-rated nations. Its recent sharp economic downturn has exposed an 8-billion-euro gap in France's efforts to reduce its budget deficit to 4.5% of GDP in 2012 from 7.1% in 2010 more than twice the permissible limit of 3%. At 45% of GDP, France is already among the most highly taxed in the Organisation for Economic Co-operation and Development or the OECD. The recent report by the Lisbon Council ranked France 13th out of 17 for its overall health, including growth potential, unemployment and consumption, and 15th for progress on economic adjustments, including reducing the budget deficit and unit labour cost.

G-20 and Italy

It's quite clear G-20's prime concern is Italy. The country is increasingly unable to raise debt at affordable cost, and its prime minister was struggling to push through austerity measures in the face of mounting labour unrest amid an unfriendly parliament. It was also clear the eurozone isn't equipped to deal with the collapse of Italy. At G-20, although they had indicated a willingness to co-operate, non-European leaders had made it clear they want the eurozone to first rely on its own resources to resolve the crisis. Nevertheless, Europeans did consider seeking outside help, in particular to boost their bailout fund, including asking the International Monetary Fund (IMF) for co-operative support. But no one bit. The very hint of boosting IMF's role underscored deepening worries about the adequacy of Europe's own response. In the end, G-20 leaders agreed only to explore options, including voluntary contributions and using its special drawing rights (SDR) in some fashion.

G-20 has little to show

As in the previous year, an all too familiar G-20 meeting ended with a long list of promises made, many of which reflected a rehash of old ones; with most promises made and then broken in the past; and still others, not known to be kept.

However, one key step did emerge: Italy, the focus of most worries in the European, and indeed the world, markets agreed to permit the IMF to monitor its progress with fiscal reforms. This is as drastic a step as can be expected, given the biggest fear among Europeans is that markets will cease financing Italy, causing a meltdown the eurozone would be quite powerless to stop.

European leaders had hoped G-20 would conclude with an endorsement of their plan announced a week before, that would boost confidence in the markets. It included new efforts to recapitalise European banks, an upgraded bailout scheme for Greece, and an increase in funding available to the eurozone's bailout fund, the European Financial Stability Facility (EFSF).

There was also the hope to enhance EFSF's capacity through parallel “investments” from non-European G-20 members. G-20 had noted the European Central Bank's (ECB) refusal to act as lender of last resort and to provide financing to help leverage the EFSF's 440 billion euro into something much larger, which had led the Europeans to pursue the non-Europeans with large surpluses, such as China.

As the eurozone crisis deepened, much of the wider G-20 agenda to encourage “strong, stable & balanced” global growth fell by the wayside at this time. As I understand it, it would appear the stronger economies, including China, Germany, Canada & Brazil, did agree to limit efforts at fiscal tightening and possibly do more to boost demand at home. This marked a reversal from last year's summit which centred on fiscal deficit reduction.

The G-20 pact 

The more important conclusions reached at the Summit included the following:

● Commitment to take decisions to reinvigorate economic growth, create jobs, ensure financial stability and promote social inclusion; and to coordinate their actions and policies.
● An action plan for growth and jobs to address short-term vulnerabilities and strengthen foundations for growth. Advanced economies committed to adopt policies to build confidence and support growth, and implement clear & credible measures at fiscal consolidation.
● Commitment by (i) countries whose public finances remain strong to take discretionary measures to support domestic demand; (ii) countries with large current surpluses commit to reforms to raise domestic demand; and (iii) all commit to further structural reforms to raise output in their countries.
● Commitment to strengthen the social dimension of globalisation.
● Set-up a taskforce to work with priority on youth unemployment.
● Agreement to (i) ensure the SDR basket composition continues to reflect the global role of currencies; (ii) review the composition of the SDR basket in 2015, or earlier; and (iii) make progress towards a more integrated, even-handed and effective IMF surveillance.
● Commitment to move rapidly toward more market-determined exchange rate systems, avoid persistent exchange rate misalignments, and refrain from competitive devaluation.

Despite the cheering about Europe's debt deal and G-20's role in pressuring Europe to act swiftly, worries continue to mount that the world can't succeed without stronger growth. Europe and the United States are virtually at a standstill. At the present pace of muted expansion, unemployment will stay high and incomes stall. Debt saddled nations will have an even tougher time generating enough revenue to pay bills & service debt. This would spark more default fears or even higher borrowing rates in Italy, Greece and others under pressure.

Latest projections point to the eurozone flirting with recession in 2012. Even in Asia, a critical engine of recovery, prospects are dimming. Yet, nations remain divided on enacting new measures to boost growth or continue focus on deficit reduction. Weak nations like Italy and Greece are under intense pressure to adopt very severe austerity schemes in the face of enormous suffering by its people who fall victim to weakened social safety nets and reduced cashflows.

Towards this end, the G-20 commitments fall far short. Markets worldwide have since responded; their verdict: continuing sell-off of bonds and shares, and continuing high cost of borrowing by Italy and Spain.

APEC Honolulu Declaration

Following the goings-on at G-20, the 21-member Asia-Pacific Economic Cooperation (Apec) economic leaders met in Honolulu on Nov 12-13 to bolster their economies and lower trade barriers as they seek to prop up global growth and shield themselves against fallout from Europe's debt crisis.

They adopted the Honolulu Declaration in which leaders agreed to take concrete steps towards building a “seamless regional economy” to generate growth and create jobs in “three priority areas”: (i) strengthening regional economic integration & expanding trade, (ii) promoting green growth, and (iii) advancing regulatory convergence and co-operation. Apec leaders gathered at a time when “growth and job creation have weakened and significant downside risks remain, including those arising from the financial challenges in Europe and a succession of natural disasters in the region.”

Against this uncertain backdrop, the forum had something more concrete to focus on than the usual bromides about extending free trade. This reflected in part frustration with the long-running (entering its 11th year with no end in sight) world trade talks, and in part, a desire to snap out of the poor global economic outlook. There is also a broader influence from concern about how best to grow and create jobs.

The Trans-Pacific Partnership (TPP), a proposed free trade pact covering nine Apec members (the United States, Australia, New Zealand, Vietnam, Singapore, Malaysia, Brunei, Chile & Peru) account for 35% of the world economy, is unique, making it the blueprint for future global trade agreements since it had taken on new issues including green technologies & the digital economy. An agreement was reached on the broad outline of a deal with a final agreement in sight for 2012.

Since then, three more Apec members (Japan, Canada and Mexico) have expressed interest to join. Together, this would create a market of 800 million, the largest trade deal for the United States. The aim is to eventually cover all 21 members of Apec which accounts for more than one-half of the world's economic output. Apec says: “We recognise that further trade liberalisation is essential to achieving a sustainable global recovery in the aftermath of the global recession of 2008-09.” An expanded TPP would provide the much needed boost.

But no trade agreement in the Pacific is complete without China. Looks like a power play between the United States and China is in the works. As such, optimism about its potential benefits needs to be tempered.

At the conclusion of Apec meeting, leaders agreed to: (i) address two key next generation trade and investment issues, viz. commitment to help the small and medium-sized enterprises grow and plug into global production chains; and to promote effective market-driven innovative policies; (ii) develop by 2012 a list of environmental goods (including solar panels, wind turbines and energy efficient light bulbs) that contribute to green growth on which members resolved to reduce tariffs to 5% or less by end 2015, and to also eliminate non-tariff barriers; and (iii) take steps by 2013 to implement good regulatory practices. In the end, the question remains how far leaders will be able to turn promises into action.

The biggest problem on the Asia-Pacific horizon remains Europe, where fiscal turmoil centred on Italy and Greece will continue to surprise and send shock waves worldwide.

As feared, both summits ended with a whimper, eclipsed by the Italian and Greek sovereign debt drama.

Former banker, Dr Lin is a Harvard educated economist and a British Chartered Scientist who now spends time writing, teaching and promoting the public interest. Feedback is most welcome; email: starbizweek@thestar.com.my.


Asean for Pacific peace

BEHIND THE HEADLINES By BUNN NAGARA

WHEN the US hosted this year’s Apec (Asia-Pacific Economic Cooperation) summit, Honolulu was the natural venue. Hawaii is the only US state in the Pacific, as distinct from merely being on the periphery.

But as regions go, the “Asia-Pacific” itself is a cumbersome construct alien to existing realities. Not only is the Pacific Ocean the largest expanse of water on the planet, making the Asia-Pacific a “region” is a geopolitical attempt to fuse several distinct regions lapped by Pacific waters into a single whole: East Asia, Oceania, North America and Latin America.

That has made an ambitious, 21-member Apec an unwieldy mass of anxieties in search of a higher purpose beyond generalities shared also by much of the rest of the world. With few common interests and fewer shared priorities and modalities, Apec proceedings have progressively suffered from inertia.

In contrast, more natural regions as clusters of nations or economies in and around the Pacific have evolved with greater vibrancy. The late Robert Scalapino, UC Berkeley’s specialist in East Asian affairs, called these “natural economic territories (Nets)”.

On one level, culture, history and trade (economics) have bonded these entities together as identifiable regions: thus the North American Free Trade Agreement (Nafta), Mercosur, the EU and Asean Plus Three (APT, with China, Japan and South Korea). They developed from geographical proximity and social affinity through economic logic and official policy.

Although today’s US-China economic relationship continues to grow, it is at least as competitive as it is complementary. Their non-economic relationship is even more troubled.

On a localised level, Nets are evident in “growth triangles” and various growth polygons in several cross-border regions. Without their non-political elements, however, “regions” become undernourished because they cannot live on strategic concerns alone.

Nets do not deny a unitary global economy with globalised supply chains and markets – or the contagion effect these produce when core economies decline. But Nets do help to explain the distinct economic impulses and motive forces for each region, such as why East Asia remains the world’s most economically dynamic region even when North American and European economies falter.

Politically, East Asia also has no ideological encumbrances when state policy determines economic priorities. Culturally, pragmatism is key, so that eclecticism is often rated above orthodoxy.

Differences between regions are also manifested in the way foreign relations are shaped. For Asean, it is better for countries to agree to disagree without being disagreeable, than for them to confront each other with self-righteous ire and distinct dogmas.

East Asia is also not as hypersensitive to the vagaries of a fickle electorate with sensibilities set to four-year election cycles. National policy therefore has more time to develop, mature and yield dividends.

In the build-up to Apec 2011, Ralph Cossa of Honolulu-based think tank Pacific Forum CSIS said: “China is becoming an 800-pound gorilla. The US is still the 1,600-pound gorilla, so which one would you rather have? ... we’re housebroken; we’re a lot more fun to invite into your living room ...”

China’s impressive rise still marks it as aspiring to only a fraction of what the US has already achieved, economically and more so militarily – if China is aiming for tactical parity at all, which is doubtful.

But Cossa is right only in part. The reality of a post-Cold War world, and one which all Asean countries hope will prevail, is not having to choose between superpowers.

The regional situation is not either-or, “with us or against us”. It is “both and”, so the question of “rather having” one or the other does not arise.

Besides, whether any superpower is, ever has, or can be “housebroken” remains very much in doubt. Nations that have borne the brunt of US military intervention are still hoping to recover.

But Cossa is right in that the US needs to be invited into this region’s “living room” – it is not an Asian country. China, however, has always been an Asian power, and an East Asian giant at that.

How the US today, still bristling with military technology and looking to confront global challenges, responds to a rising China forms the basis of the region’s concerns. Developments in recent days have not been reassuring.

On his way to the East Asia Summit (EAS) in Bali after Apec, President Barack Obama stopped over in Australia and announced plans for stationing US troops there.

Mean­while, the Pentagon has been working quietly on its AirSea Battle concept to counter China (see   next).

On Wednesday the US said it would provide the Philippines with an additional warship to boost Manila’s claims to islands in the South China Sea disputed by China. The next day a US Congressional committee voted to provide Taiwan with new F-16 jet fighters in addition to technical upgrades to its existing fleet, upping the ante in Taipei against Beijing.

On Friday Japan pledged US$25bil (RM79bil) in infrastructure projects for Asean countries, in efforts described as raising its regional profile in competing with China. Following China’s reservations about the US-Australia military arrangements, Canberra warned Beijing not to interfere.

East Asia has tried and tested ways of satisfactorily engaging various powers, regardless of size and strength.

What the region does not need, and can ill afford, is superpower presumptuousness that upsets diplomacy and destabilises geopolitics.

A pragmatic Asean has learnt that bluster, bravado and brinkmanship are not the way to proceed. Its steadier if slower methods are respected internationally, having made it the most successful regional organisation in Asia.

Where US military dominance of the Pacific has ensured safe passage of international shipments, the US is the main benefactor and a resource-importing, export-oriented China the main beneficiary.

If there is any change to the status quo, China would want to be the least involved.


Pentagon planning Cold War against China - AirSea Battle concept

Pentagon battle concept has Cold War posture on China ...

Washington Times: 12 November 2011
The Pentagon lifted the veil of secrecy Wednesday on a new battle concept aimed at countering Chinese military efforts to deny access to areas near its territory and in cyberspace.
 
The Air Sea Battle concept is the start of what defense officials say is the early stage of a new Cold War-style military posture toward China.
 
The plan calls for preparing the Air Force, Navy and Marine Corps to defeat China's "anti-access, area denial weapons," including anti-satellite weapons, cyberweapons, submarines, stealth aircraft and long-range missiles that can hit aircraft carriers at sea.
 
Military officials from the three services told reporters during a background briefing that the concept is not directed at a single country. But they did not answer when asked what country other than China has developed advanced anti-access arms.

** FILE ** A security officer walks on the roof of the Pentagon. (AP Photo/Charles Dharapak) 
** FILE ** A security officer walks on the roof of the Pentagon. (AP Photo/Charles Dharapak)

A senior Obama administration official was more blunt, saying the new concept is a significant milestone signaling a new Cold War-style approach to China.

"Air Sea Battle is to China what the maritime strategy was to the Soviet Union," the official said.
 
During the Cold War, US naval forces around the world used a strategy of global presence and shows of force to deter Moscow's advances.
 
"It is a very forward-deployed, assertive strategy that says we will not sit back and be punished," the senior official said. "We will initiate."
 
The concept, according to defense officials, grew out of concerns that China's new precision-strike weapons threaten freedom of navigation in strategic waterways and other global commons.
 
Defense officials familiar with the concept said among the ideas under consideration are:
 
• Building a new long-range bomber.
• Conducting joint submarine and stealth aircraft operations.
• New jointly operated, long-range unmanned strike aircraft with up to 1,000-mile ranges.
• Using Air Force forces to protect naval bases and deployed naval forces.
• Conducting joint Navy, Marine Corps and Air Force strikes inside China.
• Using Air Force aircraft to deploy sea mines.
• Joint Air Force and Navy attacks against Chinese anti-satellite missiles inside China.
• Increasing the mobility of satellites to make attacks more difficult.
• Launching joint Navy and Air Force cyber-attacks on Chinese anti-access forces.
 
Pentagon press secretary George Little said the new office "is a hard-won and significant operational milestone in meeting emerging threats to our global access."
 
"This office will help guide meaningful integration of our air and naval combat capabilities, strengthening our military deterrent power, and maintaining US advantage against the proliferation of advanced military technologies and capabilities," Mr. Little said.
 
He noted that it is a Pentagon priority to rebalance joint forces to better deter and defeat aggression in "anti-access environments."
 
Earlier this month, Defense Secretary Leon E. Panetta said during a visit to Asia that US forces would be reoriented toward Asia as the wars in Iraq and Afghanistan wind down. The new focus will include "enhanced military capabilities," he said without elaborating.
 
The military officials at the Pentagon on Wednesday did not discuss specifics of the new concept. One exception was an officer who said an example would be the use of Air Force A-10 ground attack jets to defend ships at sea from small-boat "swarm" attacks.
 
China in recent years has grown more assertive in waters near its shores, harassing Navy surveillance ships in the South China Sea and Yellow Sea.
 
China also has claimed large portions of the South China Sea as its territory. US officials said the Chinese have asserted that it is "our driveway."
 
The Pentagon also is concerned about China's new DF-21D anti-ship ballistic missile that can hit aircraft carriers at sea. Carriers are the key power-projection capability in Asia and would be used in defending Japan, South Korea and Taiwan.
 
"The Air Sea Battle concept will guide the services as they work together to maintain a continued US advantage against the global proliferation of advanced military technology and [anti-access/area denial] capabilities," the Pentagon said in announcing the creation of a program office for the concept.
 
Although the office was set up in August, the background briefing Wednesday was the first time the Pentagon officially rolled out the concept.
 
The Army is expected to join the concept office in the future.
 
One defense official said the Army is involved in cyberwarfare initiatives that would be useful for countering anti-access weapons.
 
"Simply put, we're talking about freedom of access in the global commons. Increasing ranges of precision fire threaten those global commons in new expanding ways," said a military official speaking on condition of anonymity. "That, in a nutshell, is what's different."
 
Defense officials said some administration officials opposed the new concept over concerns it would upset China. That resulted in a compromise that required military and defense officials to play down the fact that China is the central focus of the new battle plan.
 
A second military official said the new concept also is aimed at shifting the current US military emphasis on counterinsurgency to the anti-access threats.
 
The office was disclosed as President Obama sets off this week on trip to Asia designed to shore up alliances. He is set to meet Chinese President Hu Jintao in Hawaii on Saturday.
 
The concept grew out of the 2010 Quadrennial Defense Review that, in its early stages, had excluded any mention of China's growing military might.
 
China was added to the review after intervention by Andrew Marshall, director of the Pentagon's Office of Net Assessment, and Marine Corps Gen. James N. Mattis, at the time head of the Joint Forces Command.
 
China military specialist Richard Fisher said the new Air Sea Battle office is necessary but may be "late in the game."
 
"A Pentagon office focused on China's military challenges in Asia or beyond will be insufficient," said Mr. Fisher, of the International Assessment and Strategy Center. "This challenge will require Cold War levels of strategic, political and economic policy integration well beyond the Pentagon's writ."
 
Said former State Department China specialist John Tkacik: "This new Air Sea Battle concept is evidence that Washington is finally facing up to the real threat that China has become an adversarial military, naval and nuclear power in Asia, and that the only way to balance China is to lend the weight of US air and naval forces to our Asia-Pacific allies' ground forces."
 
Source: Washington Times

Saturday, November 5, 2011

Global recession grows closer as G20 summit fails in disarray, Europe stumbles on through debt fog!



G20 ends in disarray as Europe stumbles on through debt fog

Greg Keller
The G20 summit ended in disarray without additional outside money to ease Europe's debt crisis and new jitters about Italy clouding a plan to prevent Greece from defaulting.

In Athens, Greece's prime minister survived a confidence vote in parliament early on Saturday morning, calming a revolt in his Socialist party with a pledge to seek an interim government that would secure a vital new European debt deal.

In the end, only vague offers to increase the firepower of the International Monetary Fund - at some later date - were all the eurozone leaders were able to take home Friday after two days of tumultuous talks.

Greece's PM George Papandreou (R) and Finance minister Evangelos Venizelos smile after winning a vote of confidence.
Greece's PM George Papandreou (R) and Finance minister Evangelos Venizelos smile after winning a vote of confidence. Photo: Reuters

With their own finances already stretched from bailing out Greece, Ireland and Portugal - and the United States and other allies wrestling with their own problems - eurozone countries had been looking to the IMF to help line up more financing to prevent the debt crisis from spreading to larger economies like Italy and Spain.

Italy's fate in particular is crucial to the eurozone, because its economy - the third-largest in the currency union - would be too expensive to bail out. The implications for the world economy are stark: The debt crisis that has rocked the 17-nation eurozone threatens to push the world economy into a second recession.

European leaders could point to one potential catastrophe averted: They stared down Greece's prime minister and berated him into scrapping a referendum that threatened their European bailout plan. Greece's politics are in upheaval as a result, but the shaky bailout plan appears back on track - for now.

"We want Europe to work," French President Nicolas Sarkozy said on French TV when the summit was over. "I think today we can have confidence ... but that's not to say our troubles are behind us."

In the end, the Greek question completely derailed Sarkozy's aim of using the summit to show that Europe had sorted out its debt problem once and for all - and possibly convince some of them to pitch in to the rescue effort.

In the space of days, the already shrunken list of goals set out by France to close out its year as head of the G20 was scrapped, replaced by a nearly constant stream of shocking new developments and reversals in Europe's long-running attempt to get control of Greece's debt crisis.

That reality was perhaps best illustrated at the height of the summit on Thursday evening, when hundreds of journalists dropped what they were doing in the basement of Cannes' Palais des Festivals and gathered around television screens to watch a live transmission from the Greek parliament in Athens, where Prime Minister George Papandreou was speaking.

The week of unending drama in Athens horrified its European partners, spooked global markets and overshadowed the summit in Cannes. The threat of a Greek default or exit from the common euro currency has worsened the continent's debt crisis.

When the week started, Europe had finally reached an intricate, ambitious and fragile deal to try to rescue Greece and stop the crisis from spreading any further. The G-20 summit was supposed to solidify and clarify the deal and get the world economy back on the right track.

Then on Monday night, Papandreou shocked his European partners and domestic allies by announcing he would put the plan to a referendum. Markets panicked, as did many of the leaders coming to Cannes.

Sarkozy and German Chancellor Angela Merkel held a series of frenzied meetings, then summoned Papandreou on Wednesday. If you lose this referendum, you could lose the euro, they told him. And they froze a new (euro) 8 billion ($A10.66 billion) loan that Greece will soon need to pay government salaries.

On Thursday, Papandreou backed down and abandoned the referendum. The U-turn left his 2-year-old government teetering.

Now Europe's leaders may find it is impossible to take back the shocking admission by Sarkozy and Merkel that an exit by Greece from the eurozone was no longer unthinkable.

And even as US President Barack Obama, Chinese President Hu Jintao and other leaders struggled to make sense of the Greek drama's fast-shifting plot, another flashpoint emerged in Italy.

Market confidence in Italy's ability to reduce its public debt and spur growth in its anemic economy has withered over recent weeks as the government weakened. MPs have defected to the opposition and some of Prime Minister Silvio Berlusconi's ministers have openly suggested the government's days may be numbered.

Market fears mounted on Friday in the wake of the confusion about Greece. Italy's benchmark 10-year bond yield jumped 0.32 of a percentage point to 6.43 per cent, indicating a surge in investor worries about the country's ability to repay its debts.

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Global recession grows closer as G20 summit fails

Cameron tells eurozone member states to solve their own problems. Link to this videoA world recession has drawn closer after a fractious G20 summit failed to agree fresh financial help for distressed countries and debt-ridden Italy was forced to agree to the International Monetary Fund monitoring its austerity programme.

Financial markets fell sharply after the two days of talks in Cannes broke up in disarray, amid concerns that Italy will now replace Greece at the centre of Europe's deepening debt crisis.

UK hopes that the Germans would relent and allow the European Central Bank to become the lender of last resort for the euro were also dashed.

On a day of unremitting gloom and yet more market turbulence, the Greek prime minister, George Papandreou, won a late-night confidence vote in his parliament after making a speech in which he promised to start powersharing talks to form a caretaker coalition government. Although he won the vote by 153-145, he is now expected to step down and a national unity government is expected to take over in the coming days.

Papandreou said he would visit the country's president on Saturday to launch power-sharing talks "with the [opposition] parties … for the formation of a government of broad co-operation."

In a sign that the spread of the debt crisis to Italy could break up the single currency, the chancellor, George Osborne, admitted the Treasury was undertaking crisis planning for a eurozone collapse.

The G20 deadlock led David Cameron to issue one of his starkest warnings about the impact on the UK economy, saying: "Every day the eurozone crisis continues and every day it is not resolved is a day that it has a chilling effect on the rest of the world economy, including the British economy.

"I am not going to pretend all the problems in the eurozone have been fixed. They have not. The task for the eurozone is the same as going into this summit. The world can't wait for the eurozone to go through endless questions and changes about this.

"We, like the rest of the world, need the eurozone to sort out its problems. We need more to happen in terms of detail on the European firewall."

Cameron hinted at worse to come, describing this as only "a stage of the global crisis".

There had been hopes that the G20 would agree to increase IMF resources by as much as $250bn to more than $1tn, but disagreements about the wisdom of it, structure, size and contributors to the fund left world leaders forced to pass the issue on to a meeting of G20 finance ministers next February.

The French president, Nicolas Sarkozy, had been eager to flourish a figure both to reassure the markets and to top his chairmanship of the G20.

Cameron revealed the friction, saying: "The very worst thing would be to try to cook up a number without being very specific about who is contributing what. If you cannot do that, it is better to say the world stands ready to increase resources to the IMF as necessary."

In the financial markets an early rise in share prices was reversed after it became clear that divisions in the G20 would prevent a deal in Cannes to boost the firepower of the European financial stability facility (EFSF) or the IMF. The yield on 10-year Italian bonds rose from 6.2% to 6.4%, the highest since the euro was founded, raising fears that the country would face problems financing its huge debts.

Obama, under pressure from Congress, was deeply reluctant to contribute to an expansion of IMF funds without clearer signs that the eurozone was sorting out its problems. Admitting that he had been given a crash course in European politics, Obama urged Greek and Italian parliaments to take decisive action to control their deficits and combat what he described as some of the psychological origins of the crisis.

He also urged the euro area to start putting some resources into the EFSF, which Europe hopes to turn into a bailout fund with at least €1tn to deploy.

But the German chancellor, Angela Merkel, said: "There are hardly any countries here which said they were ready to go along with the EFSF."

Berlusconi was summoned to a late-night hotel meeting with Merkel, Sarkozy, the IMF director general, Christine Lagarde, and Obama, where he was told that the IMF was to start monitoring to ensure tough austerity measures are implemented. The measures include changes to the labour market, pension reform and the sell-off of state-owned assets.

Italy has debts of €1.9tn, or 120% of GDP, and if it followed Greece down the path towards a financial bailout, or default, the impact on the European banking system would be vast. Italy faces new tests in further auctions of its debt this month – it has to raise €30.5bn in November and a further €22.5bn in December.

Sarkozy denied that the demands on Berlusconi represented an IMF coup, saying: "We never wanted to change governments, either in Greece or in Italy. That is not our role, that is not our idea of democracy, but it's clear that there are rules in Europe and if you exonerate yourself from these rules you exclude yourself from Europe."

Berlusconi, facing defections from his own party, insisted he had invited the IMF to offer advice. Berlusconi said on Friday he had rejected an offer of funds from the IMF – "I don't think Italy needs that" – and said his country was more solid than France or the UK.

British officials privately admit that potential economic collapse in Italy is now the single biggest concern gripping world leaders. One said: "We cannot have the Italians meeting in crisis every three days. We need some action."

The UK government will now focus on urging its European partners to make progress, and will continue to support extra cash for the IMF. Cameron said he would not need UK parliamentary approval for this as the Commons has already agreed to an increase that would cover the proposed UK additional contribution.

The EFSF has €440bn ($608bn) available to lend, of which roughly half is expected to be consumed by bailouts of Ireland, Portugal and Greece. Italy has nearly €2tn in debt outstanding.

The European Central Bank has purchased Italian debt since August, but will not carry on doing so indefinitely. The need to bolster the EFSF has led the EU to pursue countries outside the euro zone with surplus cash, such as China. 

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