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Thursday, April 4, 2013

Malaysia's future lies in Malaysian hands! Electoral system for GE13 ready now?

FINALLY, the curtain has been drawn and the ball is at our feet to decide the destiny of our nation over the next five years.




 The much-awaited announcement on the dissolution of Parliament was made at 11.30am yesterday, exactly four years after Datuk Seri Najib Tun Razak took office as the sixth Prime Minister of Malaysia.

Although everyone waited for the dissolution for quite some time, I think the Prime Minister waited till this day to complete his four years of premiership. And of course, he had a lot on his agenda to be completed especially the Janji Ditepati tour and all his other innovative and transformative plans.

Whether the polls were called last year or not, it’s the prerogative of the PM of the day to call the shots and he had done it well within the stipulated period. He had until April 28 to do so.

Polling should be held within 60 days and my guess is it will be held within 30 days and let’s hope the voters will make good use of this opportunity to elect the right people to run the country.

Our future lies in the hands of 13 million voters and everyone should exercise their vote with utmost sincerity. Whichever divide we support, let’s be rational and civil about it.

At the end of the day, we are talking about our nation, our beloved Malaysia.

I am not propagating whom you should vote for but vote you must, professionally and wisely.

Do not be misled and succumb to empty promises.

We need a leader who is truly a Malaysian at heart, one who cares for the rakyat. Reject the extremists.

As the Prime Minister has said, do not derail Vision 2020. Whoever comes to power should focus their attention on achieving the developed status of our country.

Vision 2020 is not only Tun Dr Mahathir Mohamad’s dream but the dream of all Malaysians.

Policies and plans laid out for the betterment of the country should be complemented. One should always put the nation above self.

To all the parties, especially Barisan Nasional and Pakatan Rakyat, I hope that common sense will prevail before, during and after the polls.

Let’s hope and pray the run-up to the elections will be fair and clean and at the same time the parties concerned will act maturely and ethically.

At the end of the day, common sense should prevail and chaos after the elections should not be an option.

All parties should accept the decision of the voters and the verdict gracefully.

To the winners, syabas and to those who failed, I wish you the best the next time around.

Do not underestimate the intelligence of the voters. We are no more the katak di bawah tempurung - simply put, naive.

We, the rakyat, are very well-informed and would not be easily swayed by sweet talk or fiery speeches. We only want the truth and the best from our elected representatives.

JAYARAJ KGS Sitiawan - The Star

Is Malaysia’s electoral system ready for GE13? 

One of the special features in Malaysia’s multi-ethnic society is the still predominantly race-based party system. UMNO, the long term dominant ruling party was founded in 1946 as a reaction against the granting of citizenship to Chinese and Indian immigrants upon independence. 

With a possible, some say probable, watershed and regime change for Malaysia’s increasingly competitive political system in the pipeline, it is useful to look into the election system and its mechanisms. The media, fascinated with personality clashes, campaign highlights and the outcome of elections, don’t look too often into details of the electoral law. And most voters don’t care much whether the ruling governments tweak the rules in their own favour, most often by changing the boundaries of precincts more or less unnoticed – the old, widespread, and popular gerrymandering. Malaysia is not alone here, but the discrepancies in the electoral size of constituencies in favour of Malay and against Chinese areas have been “adjusted” frequently and helped the United Malays National Organisation (UMNO) to safeguard its dominance over the last decades.

One of the special features in Malaysia’s multi-ethnic society is the still predominantly race-based party system. UMNO, the long term dominant ruling party was founded in 1946 as a reaction against the granting of citizenship to Chinese and Indian immigrants upon independence. The defensive attitude of the Malay (then shaky) majority, understandably insisting on political dominance in their own homeland, led to the formation of other ethnic-based political parties. UMNO, in a successful move to broaden its support base since 1974, managed to co-opt the Malaysian Chinese Association (MCA), the Malaysian Indian Congress (MIC),  the Malaysian People’s Movement Party (GERAKAN) and a number of parties in Sabah and Sarawak into the National Front (Barisan Nasional / BN) coalition (now altogether 13 parties), which enjoyed a huge majority in Parliament until 2008.

Irregularities in most general elections until now have been reported quite regularly. The long list reaches from vote buying, stuffing of ballot boxes, bussing of voters to other constituencies and multiple voting, “phantom voters”, “imported voters”, “missing voters”, manipulated voters lists, to granting citizenship to illegal immigrants (mainly from Indonesia and the Philippines). The latter is now one of the major arguments to attack UMNO and Prime Minister Najib Razak for this citizenship for votes trick. Najib, who has promised his followers to win back the coalition’s two-thirds majority, seems to struggle for political survival now, if rumours and polls are a reliable indicator.

The Barisan Nasional has been only nominally multi-racial but cemented in reality the Malay dominance and privileges (with quite a number of affirmative action measures), which nearly guaranteed so called “safe deposit” constituencies especially in rural areas. Pretending that the Malay political dominance was under threat has always rallied Malay voters behind the ruling coalition. And to make things even more difficult, the competition of the Islamic Party PAS often forced UMNO to demonstrate its religious credentials. With the resentment against this concept among non-Malay minorities (at least about 30%) growing with the frustration about strings of prominent corruption-scandals, it was a logical strategic move for opposition leader Anwar Ibrahim to form a multi-racial party, the Peoples’ Justice Party or Parti Keadilan Rakyat in 2003. Anwar, after being sacked from UMNO and his post as Deputy Prime Minister in 1998, accused under dubious circumstances of corruption and sodomy and imprisoned, is back on the political scene since 2008 and the probable Prime Minister if his opposition “Peoples’ Pact” (Pakatan Rakyat / PR) wins the upcoming election. The Pakatan Rakyat is not without internal problems given the diversity of its members, namely the Malay Islamic rival of UMNO, Parti Islam Se-Malaysia (PAS) and the Chinese Democratic Action Party (DAP). However, given the erosion of the Barisan Nasional component parties Gerakan (officially multi-racial but predominantly Chinese and the Malaysian Chinese Association (MCA), Pakatan Rakyat seems to be a very strong challenger to the ruling coalition.

Inherited from the British colonial master, Malaysia has adopted a clear-cut first-past-the-post majoritarian election system which has helped to keep UMNO and its BN component parties in power so far. The Barisan-coalition contesting the elections practically as one single party gave few choices to the voters and made it more than difficult for opposition parties to make inroads… until 2008 when more voters were fed up with arrogance of power and all too visible corruption. The majority of the BN in 2008 was clear, with 140 seats against 82 for the opposition, which is four times their previous share. But in relative vote shares it was as narrow as 50.27% against 46.75%. And nota bene: in the first-past-the-post electoral system relatively small changes in voter preferences can change the outcome dramatically.

By Wolfgang Sachsenroeder, New Mandala  

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26 Mar 2013

Wednesday, April 3, 2013

Apple CEO apologizes over China warranties


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American technology giant, Apple, has issued a public letter of apology to Chinese consumers over the company’s warranty policies in China. Apple’s CEO Tim Cook signed the statement, saying the company is sorry for any "concerns or misunderstandings" that have been caused.



In the letter, Cook said that over the past two weeks, Apple has received feedback concerning its warranty policies in China and the company has "reflected" on this.

He said APPLE takes the feedback seriously and is seeking to allay concerns that the company was being arrogant by not responding to them. He said this was due to lack of communication on Apple’s part and that it was sorry for any inconvenience caused to consumers.

In the statement, Apple said the company is making four major adjustments to improve its after-sales services for Chinese consumers, including improving its warranty for iPhone 4 and iPhone 4S, enhancing supervision over and training for authorized service providers.

APPLE’s apology comes after the China Consumer’s Association asked Apple to "sincerely apologize" to Chinese consumers and "thoroughly correct its problems," after taking little action to address criticism, started by China Central Television , which exposed Apple’s after-sales services failings in China in a special TV program.

The CCA demanded that Apple inform consumers if refurbished parts are used when repairing broken devices, and that repair costs should be calculated accordingly.

South Korea, Australia and Italy have filed similar claims against Apple, citing cases where refurbished products had been used to repair damaged iPhones, higher prices had been charged and its failure to publish warranty information in those countries.

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Sulu sultanate, Muedzul Lail Tan Kiram gave Datuk Seri title


PETALING JAYA: Muhammad Ridhwan Sulaiman (pic right) carries a “Datuk Seri” title given to him by the so-called Sulu sultanate, a claimant to the controversial throne said.

Muedzul Lail Tan Kiram said he bestowed the title upon Muhammad Ridhwan after his “coronation” on Sept 16 last year.

“I conferred the title to him as an honour because he has helped my people,” Muedzul said from Manila yesterday.

He said Muhammad Ridhwan gave money generously to support his programmes to alleviate poverty among his people, including for hospitalisation and religious activities.

“To our people, he is like a hero. He was a bridge between Malaysia and the Suluk,” added Muedzul, who lives on Sulu island.

He said he didn't not agree with the actions of Jamalul Kiram III, another claimant to the Sulu throne, who sent armed men to Sabah to reclaim it as their territory.

Muhammad Ridhwan, 48, is president of the Al-Ehsan Islamiah charity foundation based in Penang.

He has been detained under the Security Ordinance and Security Measures Act 2012 after turning himself in to police over the incursions in Sabah.

In BUTTERWORTH, Muhammad Ridhwan's family said he did not support terrorists, insisting his dealings with Muedzul were “purely business”.

Nur Rina Abdullah, 39, said her husband, a Kubang Pasu Umno division member, got to know the self-styled sultan six months ago.

“My husband was looking for investment opportunities for Al-Ehsan Islamiah. So, he wanted to explore the virgin coconut oil business and decided to tap its potential in Sulu Island, which has ample supply of coconuts,” she said at their home in Taman Inderawasih in Prai yesterday.

She said her husband, a Hindu known as Ravindran Subramaniam Nair before his father and their entire family converted to Islam about 20 years ago, once ran a legal firm in Kuala Lumpur.

Nur Rina, a Catholic before she embraced Islam, said they later moved to Penang and started a banana leaf restaurant in Bandar Baru Air Itam on the island.

She said the venture failed and Muhammad Ridhwan, who was born in Taiping, set up another legal firm in George Town in 2008.

She joined him as a field officer while their son Muhammad Danish Nair, 22, was the firm's customer service officer.

The couple have four other children, with the youngest aged 14.

“We understand the police need to conduct necessary investigations, but we pray that he will be released soon,” she said.

- Sources: The Star/Asia News Network

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Tuesday, April 2, 2013

Sultan of Sulu, who is the true and legitimate?

Sultan Muhammad Fuad A. Kiram I (The last son of HM Sultan Esmail E. Kiram I - Sultan of Sulu 1947 to 1973) or Sultan Muedzul-Lail Tan Kiram (son of  Sultan Moh. Mahakuttah A. Kiram - 34th Sultan of Sulu 1974 - 1986)
 
Muedzul-Lail Tan Kiram 35th Sultan of Sulu Son of  Sultan Moh. Mahakuttah A. Kiram 34th Sultan of Sulu (1974 - 1986)
Sultan of Sulu - Sultan Jamalul Kiram II (1894-1936).
 
Sultan of Sulu, Al-marhum Sultan Moh. Jamalul Kiram II (1893-1936) was recognized worldwide. During his long reign he signed several treaties with different nations.  
 Sultan of Sulu, Al-marhum Sultan Moh. Jamalul Kiram II
Unfortunately he has no offspring of his own. He passed on his authority to his youngest brother Al-marhum Sultan Mawallil Wasit Kiram (1936).

Al-marhum Sultan Mawallil Wasit Kiram was Sultan Muedzul-Lail Tan Kiram's great grandfather and Al-marhum Sultan Moh. Jamalul Kiram II was his great grand uncle.

Sultan Muedzul-Lail Tan Kiram is the grandson of the 33rd Sultan of Sulu, Al-marhum Sultan Moh. Esmail E. Kiram I (1950-1973)
  
Al-marhum Sultan Moh. Esmail E. Kiram I has granted authority to Philippine government under the administration of President Diosdado Macapagal on 12th of September 1962 and of President Ferdinand Marcos in 1969.

Sultan Muedzul-Lail Tan Kiram's mother Dayang-Dayang Farida Tan-Kiram was the first wife of his father.
Half tausug and half Chinese, she was commonly known as the Princess of Sulu.
His father's second wife is Dayang-Dayang Merriam Tanglao-Kiram, commonly known as the Princess of the South.
 
Al-marhum Sultan Moh. Mahakuttah A. Kiram, 34th Sultan of Sulu had seven children:

1. Dayang-Dayang Zuharra T.Kiram
2. Dayang-Dayang Dinwasa T. Kiram Delos Santos
3. Raja Muda Muedzul Lail Tan Kiram
4. Datu Yldon Tan Kiram
5. Dayang-Dayang Nur Mahal T. Kiram
6. Dayang-Dayang Ayesha T. Kiram
7. Dayang-Dayang Tanya Rowena T. Kiram -Tahil
 
Sultan Muedzul-Lail Tan Kiram is married with H.M. Dayang-Dayang Mellany S. Kiram. They have seven children.

1. Raja Muda Moh. Ehsn S. Kiram
2. Datu Nizamuddin S. Kiram
3. Dayang-Dayang Rahela S. Kiram
4. Datu Jihad S. Kiram
5. Datu Mujahid S. Kiram
6. Dayang-Dayang Redha S. Kiram
7. Datu Mahakuttah S. Kiram
 
Sultan Muedzul-Lail Tan Kiram studied Islam in Lahore, Pakistan (1995-1996). He got a Bachelor of Arts (BA) degree from AE College, Zamboanga. He also served the local community as a government official. At present he is involved as a civil society leader in the Province of Sulu which opposes the US-RP Balikatan Exercises of the Visiting Forces Agreement (VFA).
 
Sultan Muedzul-Lail Tan Kiram was born in Jolo. Jolo was once the capital of a maritime empire that traded with the great  Empire of China and with other kingdoms in Southeast Asia. 

As Raja Muda of Sulu, the Sultanate is Sultan Muedzul-Lail Tan Kiram birthright. There is a sacred bond between the Sultan and his people, the Rayaat, that is handed down from generation to generation between the royal family and trusted people who live in Sabah and in the Sulu Archipelago.

The Sulu Archipelago includes Palawan, Sabah, Zamboanga Peninsula, Basilan, Tawi-Tawi, the Sprately islands and the Balambagan group of islands.  Historically it was part of  Nusantara. According to oral history and traditions, Sulu has been independent and sovereign centuries before the birth of the Republic of Philippines. Sultan Muedzul-Lail Tan Kiram's ancestors contracted treaties with powerful nations and defended Sulu rights to freedom in traditional way of life against invaders.

But from the start of the Philippine Republic which lumped Sulu with the rest of the islands under the name Philippine Archipelago, Sulu has experienced devastation, death and downfall.

The Macaski Judgment over the Sabah issue in 1939 was a blow to the Sulu Sultanate. Sultan Muedzul-Lail Tan Kiram's grandfather, Sultan Moh. Esmail E. Kiram I was one of the recipients of that judgment. The Macaski settlement divided Sulu into divisions

Sabah became a private property and the heirs of the Sultan were divided among themselves. One group wanted Sabah for sale while another group wanted to take it back.

When Sultan Muedzul-Lail Tan Kiram's  grandfather, Sultan Moh. Esmail E. Kiram I, granted authority to the Philippine government through Pres. Diosdado Macapagal and Pres. Ferdinand Marcos, it was with the hope that the Philippine government would become a caretaker of the domain of the Sulu Sultanate to help the Muslims in this archipelago. This transfer of sovereign authority carried with these obligations and agreements.

As Sulu political power is declined, the unity of the Tausug people in the whole archipelago also has weakened. The economic life of the whole region was brought to the lowest level. Then came the Muslim rebellion and the civil war in 1974 that devastated the whole Sulu. Hundreds of thousands innocent people died.
 
In 1974 Sultan Muedzul-Lail Tan Kiram's  father was installed as the Sultan of Sulu. His father's twelve year reign started the slow but steady recovery of Sulu people

However after his death (February 16, 1986) there were several claimants made by pretenders (royals and non-royals) to the title of Sultan.

During the coronation process of Sultan Muedzul-Lail Tan Kiram as the 35th Sultan of Sulu

Sultan Muedzul-Lail Tan Kiram, 35th Sultan of Sulu, together with 
Mellany S. Kiram and Crown Prince Moh. Ehsn S. Kiram.

Sultan Muedzul-Lail Tan Kiram has waited  twenty-two years for the official recognition to succeed his father.

Source :  Royal Sultanate of Sulu Facebook

(Joined Facebook on 12th May 2011)

**********************************************************

Sultan Muhammad Fuad A. Kiram I 
The 35th Reigning Sultan of Sulu 
 The last son of HM Sultan Esmail E. Kiram I 
(Sultan of Sulu 1947 to 1973)
Sultan Muhammad Fuad A. Kiram I 
Indonesia Minister of Religious Affairs granted the rank and tittle of hereditary knighthood 
by Sultan Fuad A. Kiram I
(2nd December 2011)

Chancellor of Al Zaytun granted the rank and tittle of hereditary knighthood 
by Sultan Fuad A. Kiram I
(Al Zaytun is the biggest Islamic boarding school in Indonesia)
  ( 27th November 2011)
Source :  

The Royal Hashemite Sultanate of Sulu & Sabah Facebook
 (joined Facebook on 7th May 2011)

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Monday, April 1, 2013

Will the lessons be learnt from the financial crisis in Cyprus?

This time, it is Cyprus’ turn to face a bitter financial crisis as bank depositors get hit and capital controls are imposed. 


Demonstrators in Athens. The roots of the eurozone crisis lie in its unwillingness to uphold fiscal discipline. Photograph: Louisa Gouliamaki/AFP/Getty Images



THE financial crisis in Cyprus has again shown that over-dependence on the financial sector and an unregulated and liberalised financial system can cause havoc to an economy.

The particular manner in which a financial crisis manifests itself may be different from country to country, depending on the ways the country became financially over-reliant or over-liberalised, and also on how ever-changing external conditions affect the country.

For the past two weeks, Cyprus hit the headlines because of the rapid twists and turns of its crisis, the terms of the bailout it negotiated with its European and IMF creditors, the hit that bank depositors are forced to take, and finally the “capital controls” that the government has imposed to prevent bank runs and capital flight out of the country.

Depositors with more than 100,000 (RM396,000) could lose more than half their savings.

Bank customers can only withdraw 300 (RM1,189) daily; cashing of cheques is prohibited; transfers of funds to accounts held abroad or in other credit institutions are prohibited; transfers due to trade transactions above 5,000 (RM19,832) a day require central bank permission; the use of credit cards overseas is restricted to 5,000 (RM19,832) per account a month; and travellers can only take out 1,000 (RM3,960) or equivalent in foreign currency per trip.

These capital controls, announced on March 28, were highlighted in the media as the first to be imposed by a country belonging to the European Union.

It was like the slaying of a “sacred cow”, because the freedom to move funds out of and into the European countries had been treated almost like a human right.

But it is this total freedom for the flow of funds that has contributed or even been ultimately responsible for so many financial crises in so many countries in the past few decades.

This liberalised system of capital flows enables residents to place their funds abroad or to purchase foreign assets like bonds and shares.

It also enables foreigners to bring in funds either for short-term speculation and investment or longer-term investment and savings.

After the Second World War, capital controls were the rule: flows of funds to and from abroad were mainly restricted to activities linked to the real economy of trade, direct investments and travel.

From the mid-1970s, the liberalisation of capital flows took place in the rich economies and gradually spread to many developing countries.

The finance ministers of Brazil and of other developing countries have been protesting against the easy-money policies in rich countries that have had adverse effects on emerging economies.

When the internal or external situation changes and investor perception changes with it, the inflow of funds turns into its opposite.

The sudden outflow of funds, and depreciation of the currency, can then cause an even more devastating effect on the economy.

In the 1997-99 crisis, East Asian countries that had over-liberalised their financial system found that local banks and companies had borrowed heavily in US dollars.

When their currencies depreciated, many of the borrowers could not service their loans.

The countries’ foreign reserves dropped to danger levels, forcing them to go to the IMF for bailout loans.

Malaysia fortunately had some control over the amount local companies could borrow from abroad, which prevented it from falling into an external debt crisis.

The imposition of capital controls over outflows in September 1998 enabled Malaysia to avoid a financial crisis requiring an IMF bailout.

The immediate response from the IMF and the Western establishment was that the capital controls would destroy the Malaysian economy.

Today, the economic orthodoxy has changed, and most analysts including at the IMF give credit to Malaysia for the capital controls.

The Malaysian controls included a temporary ban on foreigners transferring their ringgit denominated funds (for example in the stock market) abroad, a limit to the funds local travellers could take out of the country, and limits to overseas investments by local companies and individuals.

Today, the IMF itself has changed its position, saying that capital controls in certain situations are not only legitimate but may also be necessary.

It has partially recognised that unregulated capital flows can cause financial instability and economic damage.

In the case of Cyprus, analysts now conclude that its growth model was flawed because it was too reliant on a bloated financial sector, having become a haven for foreign savers, especially from Russia.

But a major factor in its recent crisis was that the country’s biggest banks invested in Greek government bonds.

In October 2011, a bailout package was arranged for Greece by the European Union and the IMF.

Part of the bailout terms was that holders of Greek government bonds would take a “haircut” or loss of about 50%.

This Greek debt restructuring meant a loss of 4bil (RM15.9bil) for banks in Cyprus, a huge amount in a country whose GNP is only 18bil (RM71.4bil).

Now, it is Cyprus’ turn to be reconfigured and re-created as part of a 10bil (RM39.7bil) bailout scheme. The two biggest banks, Bank of Cyprus and Laiki Bank are to be drastically restructured, with the latter to be closed.

The biggest innovation designed by the European Union and IMF creditors is that the bank depositors will have to take losses. Deposits less than 100,000 (RM396,000) are to be spared, after an original plan to also “tax” them by 6.75% was cancelled after a huge outcry and the fear of contagion, with bank runs in many European countries.

The final plan is for deposits over 100,000 (RM396,000) in the two banks to take losses not by the originally planned 9.9% but by much more.

The new European policy of getting bank depositors to take a big hit in bailouts of banks will have big ramifications for public confidence in banks.

The new perception is that money put as savings in banks is no longer safe.

The question remains: will the policymakers learn the real lessons from these crises?


GLOBALTRENDS BY MARTIN KHOR 

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Financial crises a result of governance failures

Sunday, March 31, 2013

Why call US tech giant rotten Apple?

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Apple products have gained huge popularity in China over recent years. Iphones and ipads are the "must-have" accessory, particularly in urban areas while the company’s stores are often overflowing with customers trying out the latest gadgets.

But there’s now a scandal brewing over Apple’s warranty and repair policy, and concern that Chinese consumers are being given a rough ride.

In a recent interview, Apple CEO Tim Cook said China will soon become Apple’s biggest market.

For Apple, business must stay business

Apple Inc has been having a hard time in China since China Central Television (CCTV) revealed on March 15 that the technology giant allegedly applies a different service policy to Chinese consumers than in other countries and regions. A wave of onslaught has surged in Chinese State media in the past few days, with Chinese authorities ordering the company to change its policies or face punishment according to Chinese regulations.

However, many Chinese fans have shown their loyalty toward Apple, allying with some foreign media outlets in saying that this is a "well-coordinated" campaign led by the Chinese government to pinch the US company. It is also said that Apple is merely the victim of China's vengeance against the US government's treatment of Chinese telecom giants. China's Huawei and ZTE have long been restricted in the US markets under security and other accusations.

The drama began as a typical business incident, as CCTV did not only point its finger at Apple in its March 15 exposé. It is no good for either side that the issue is gradually turning political.

Generally speaking, CCTV's annual showcase program on World Consumer Rights Day has played a positive role in digging out business scandals. It is also the reason why the program has remained influential among Chinese viewers for a long time.

Had Apple been more sincere in its response to the criticism, the result could have been different. The statement Apple made right after the CCTV exposé was very different with that of other multinational companies who were also reported to have consumer rights issues. With the sheer weight of the company behind it, Apple's detached tone could easily be seen as proof of arrogance.

Apple has won respect from Chinese consumers with its perseverance in developing leading technologies and styles. But the company is not impeccable. Like its continuing stride in exploring for technological breakthroughs, the company also needs to keep working hard to raise its service quality.

Apple should not follow the media speculation and consider itself the target of political persecution. As for its fans in China, if they do love this brand, they should let the truth emerge instead of joining the speculations.

If the issue developed into a head-on confrontation between Apple and the Chinese authorities, the US company will never be a winner, nor will China necessarily do well. Of course, Apple will suffer the most, as its products are already facing increasing competition in China.

It will be wise for Apple not to entangle itself into political debates. For Apple, it is still a matter of business. -
Global Times

Why call US tech giant rotten Apple?

State broadcaster Central China Television (CCTV) took the first bite. The People's Daily followed, and now others like Guangming Daily and The Global Times have joined the fray.

China's state media has been piling the pressure on Apple since the American tech giant was criticised during CCTV's annual show on March 15 to mark World Consumer Day.

This week alone, the People's Daily has run articles four days in a row to lash out at Apple for allegedly discriminating against its customers in China.

"Why is it that Apple is so incredibly brazen and arrogant in China when it doesn't dare to be so in the United States and other countries?" asked a commentator in the People's Daily, the mouthpiece of the Communist Party. It also likened Apple to a wolf pretending to be innocent.

Many observers are wondering about the real reasons behind the coordinated media attacks.

Could China be retaliating against the difficulties faced by its tech behemoth Huawei in the US? Or is it Apple's lack of advertisements in the state media?

"I wish I knew," Bill Bishop, a Beijing-based analyst and founder of The Sinocism China Newsletter, told The Straits Times.

There are some who say there is nothing more to it than Apple behaving badly.

"When it comes to China, a market with great potential, Apple has taken advantage of its fans' crazy enthusiasm by using incredulous sales tactics," wrote blogger Shu Shusi, a frequent commentator on consumer issues.

Not only are iPhones released later and sold at a higher price in China than elsewhere, their after- sales service is bad too, he added.

Apple might also have violated Chinese regulations, noted others. CCTV on Wednesday said consumers had complained that Apple offered only a one-year warranty for its MacBook Air in China, when the country's rules mandate a two-year warranty for the main laptop parts.

Then there is the sense that Apple needed to be taught a lesson for not being contrite enough.

"Errant companies" featured on CCTV's 315 Evening Gala, like Chinese net firm Netease, had been quick to apologise and make peace. But Apple insisted that its China customers enjoy the highest service standards.

Some wonder whether the attacks are just a case of tit-for-tat.

A US Congressional report last October accused Huawei of being a security threat.

"Just as the US attacked Huawei, China is taking it out on Apple in revenge," claimed "Blank Neo" on his Sina Weibo microblog.

Another possible explanation could be Beijing's unease with the wide usage of iPhones in China.

"There is a serious official desire for an indigenous mobile operating system," noted Bishop.

Also, the iPhone's operating system may be seen as a foreign security threat as it is a closed one and not easily monitored. The Android operating system, in contrast, is open and thus less of a threat, say observers.

The attacks could be a way of attracting eyeballs, suggested a consumer rights advocate.

"Apple has a huge customer base in China. Its news value is high," Wang Hai said.

What can Apple do to stop the rash of attacks?

Said Bishop: "I expect Apple to have to change its policies, express public contrition, and then this particular storm will blow over.

"They may also need to buy some ads on CCTV, as (search engine) Baidu and many other Chinese firms who have been on the receiving end did."

BRICS change the world: doing development differently

A prospective new financial architecture promises to reform and improve development finance for the world.


FIVE countries came together during the week to grab international headlines over how they might, as a group, change the world: Brazil, Russia, India, China and South Africa (Brics).

And they would do so in the most tried-and-tested way imaginable: financially, as a single economic entity. As a bloc Brics may effect change on a global scale, but the grouping would still do so in the traditional way of flexing economic muscle.

The annual Brics summit held during the week in Durban, South Africa, focused on what that muscle can do – challenge the World Bank and the International Monetary Fund in the way development finance is conducted, as well as the Western dominance that has prevailed in both Bretton Woods institutions.

Those institutions were never meant to be that way, of course, as a reading of their founding texts would show. But any initial magnanimity soon gave way to self-interest: US and European dominance of the World Bank and the IMF respectively was to be a Western “consensus” imposed on the world like a global neo-colonial regime.

Interestingly, the original Bric as both a term and a grouping originated not in any of the initial four countries or the developing world, but in the US itself.

None other than Goldman Sachs’ Asset Management Chairman Jim O’Neill coined the term in 2001 for those countries he believed would outpace the US in total GDP by 2020.

At the turn of the century Brazil, Russia, India and China were merely regarded by some as emerging economies developing under their own steam.

After O’Neill’s coinage they held their first summit in 2009 and invited South Africa to join them a year later, and Brics was born.

Since then, Brics as both concept and entity has had vigorous growth and a vibrant youth. It compares favourably with the IMF and the World Bank, both pushing 70 years and weighed down by limiting conditionalities and outmoded economic ideology.

Both institutions typically adopt a cold, mechanistic approach to development that prioritises market interests over human needs. Their Western bias is also a throwback in a 21st-century world of shared global interests and aspirations, and a world in which Western economies themselves are in trouble.

In contrast, Brics as a bloc of emerging economies serves as a bridge between the developing Third World and the developed First World. It seeks to narrow that yawning chasm by focusing on reviving global growth and ensuring macroeconomic stability.

Those virtues that had once been the preserve of the West have become its elusive goals. The “developed” and the “emerging” (mostly, once “developing”) economies have traded places.

The new global bank that Brics wants to establish is expected to emphasise infrastructure development and trade. The first represents solid investment in development for the future, and the second works as an economic multiplier for further growth.

On paper, Brics countries account for almost half the world’s population and just over a quarter of world trade. But more important than these bare figures is how Brics economies have been driving global growth for years, as acknowledged by the World Bank itself.

The idea for a new global bank arose only last year. So how the measured progress at the Durban summit is perceived depends at least as much on the observer: is the glass half-full or half-empty?

Some of the most difficult decisions, such as financing modes, remain unresolved. Its primary purposes like the operation of funds in project financing and a contingency fund as crisis buffer will take more time to work out.

Pessimists may cite how the absence of agreement on even the quantum of fund contribution from each country bodes ill for Brics. Basing the contribution on economic capacity makes sense, but concerns were expressed over how that would inevitably make a hulking China dominant.

A standard sum of US$10bil (RM31bil) from each country as seed capital was then considered, following a Russian proposal, but the final decision was left until later.

Optimists would say that far from weak indecision, this showed an openness about not wanting any country to dominate, with agreement on equality with a fair and manageable quantum for all.

However, realists may say that in such financial matters China would still eventually dominate. To that, it can be said that dominance by a single country was never a problem before, given the prominent US role and influence in the World Bank and the IMF.

At this point some may say it was precisely because of single-power dominance that had compromised the work of the Bretton Woods institutions. It might then be observed that a new global bank dominated by China would only balance the World Bank (and the IMF), which it would complement rather than replace.

Some observers may see crippling incompatibility in the different political systems within BRICS.

But such diversity need not be an obstacle, particularly when all countries now work within a global capitalist system.

President Vladimir Putin, often cited in Western circles as a modern incarnation of the Soviet bear, even insisted that a new global bank “must work on market principles only.” And “communist” China is not only a major and enthusiastic player in global markets, but – to former British foreign minister David Miliband – has even acted as a saviour of Western capitalism.

What worries fans of the IMF and World Bank is not how a new global bank as competitor will “steal their business,” but how it may force both to be more democratic and more sympathetic to the developing world. Who else but those currently dominating them in Washington and Brussels would object?

Japan as an emerging economy itself decades ago had its chance to forge a new alternative in international finance with the Asian Development Bank, but blew it.

The former coloniser in Asia seeking to make good in its post-war period, with US partnership, soon settled into establishment mode alongside its Bretton Woods equivalents. A new global bank established by BRICS will be a welcome addition to the existing financial institutions.

Its continental and political diversity would also make a slide into betraying its noble purpose more difficult.

Late last year, Brazil suggested that the proposed bank should be modelled on Asean’s Chiang Mai initiative.

This is a time for a sharing of experiences when each can learn from the rest, not of jealous exclusion and unfounded fears of rivalry.

In time, perhaps even the World Bank and the IMF can find it in themselves to accommodate and welcome new financial institutions operating on their “turf”.

At least that would help them return to their initial noble calling.

Behind the Headlines
By BUNN NAGARA

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Financial crises a result of governance failures

ROMAN emperor Julius Caesar was famously warned by a seer about the Ides of March, traditionally March 15.

On March 15 this year, banks in Cyprus were closed to allow politicians time to decide how to raise 5.8 billion euros so that the country could qualify for 10 billion euros in bailout funds from the rest of eurozone and the International Monetary Fund (IMF). The solution suggested was to levy a tax on depositors, sparking a realisation that finally, the Europeans had decided to “bail-in” investors and depositors, rather than using public funds to “bail-out” everyone else.

The Cyprus crisis caused a stir in global financial markets, because it punctured expectations that the worst was over. Instead, it demonstrated another episode of muddling through.

Banks in Cyprus re-opened on Thursday with new capital controls on the amount depositors can take out. Larger depositors with over 100,000 euros would stand to lose up to 40% of their deposits. Of course, a significant portion of the deposits in Cyprus banks belong to Russians, who may suffer losses of 4 billion to 6 billion euros. For certain investors, this is the price of putting money in higher risk offshore financial centres. The price to Cyprus of operating as an offshore financial centre is likely to be a drop of GDP of more than 20% in the next couple of years.

The Cyprus outcome is not unexpected. If European governments are to be loaded with heavy debt burdens as a result of the crisis, they will be bound to start “taxing” offshore financial centres, where rich Europeans had been avoiding tax for years. If the eurozone banking union is to have any credibility, they will have to start controlling banking centres which operate largely on tax and regulatory arbitrage. Moreover, having banking assets seven to eight times GDP is no longer considered viable, whether for Cyprus or Iceland.

At the heart of such troubles lies the issue of governance. Financial crises are more governance failures than anything else.

Last week, The End of History philosopher and political scientist Francis Fukuyama published an important blog commentary on “What is governance?” This is the much-awaited part of his promised series on political governance, beginning with his 2011 book The Origins of Political Order. In that book, he looked at the three components of a modern political order a strong and capable state, the rule of law and accountability of the state to its citizens. Since the 2011 book stopped at the French Revolution, most readers would be curious to see how he handled the rise of China, which has a different political system from the West.

Fukuyama's new definition of governance is “a government's ability to make and enforce rules, and to deliver services, regardless of whether that government is democratic or not.” Notice that he has decided to remove any suggestion that democracy is automatically associated with good governance, appreciating that “an authoritarian regime can be well governed, just as a democracy can be mal-administered.”

Accordingly, he uses four approaches to evaluating the quality of governance: procedural measures, input measures, output measures and measures of bureaucratic autonomy. To put it into simple language governance should be measured according to how you govern (the processes); the efficiency of governance (how much tax or resources you need); the effectiveness (outcomes rather than objectives) and whether the bureaucracy is independent of politics or not (the autonomy question).

In dissecting governance into its different dimensions, Fukuyama has helped to clarify the methodology in thinking about the tradeoffs between the ability to have high discretion versus being bogged down by excessive rules, and high capacity to execute, versus low capacity to execute. Critics of that approach would argue that strong states with excessive discretion may not be sustainable. On the other hand, weak states with too many rules and no discretion may not be sustainable either.

Fukuyama is right to point out that the bureaucracy's interests may not be identical to those of the people. The bureaucracy is supposed to be agent of the people (the principal), but many bureaucracies serve their own interests, rather than the public to the extent that civil servants may be neither civil nor servants.

Indeed, the simplistic view that the state is deterministic versus the view of free market self-order misses the fundamental point that large bureaucracies also have self-order. Anyone familiar with working in large complex bureaucracies in China, India or the United States, with many layers of government, would recognise that it is not easy to implement policies from the centre. State or provincial governments have a mind of their own, with very different priorities from that of the centre.

Indeed, in the 21st century, many cities have become more effective instruments of state, and it is not surprising that effective mayors have become national leaders because they show a capacity to deliver close to the people.

The more interesting question about governance is: why are collective action traps so pervasive? In other words, it is understandable why ineffective and weak bureaucracies or political systems are unable to overcome gridlock in their systems, but it is common to see highly effective and capable bureaucracies also caught in gridlock.

These gridlocks are apparent in the resolution of the euro crisis, the stalemate in the Doha World Trade Organisation negotiations and the Durban climate change debates. In the first week of April, the Institute for New Economic Thinking, the Centre for International Governance Innovation and the Fung Global Institute will be hosting a major conference in Hong Kong on how creative and innovative thinking can open up new avenues of thinking on the solutions to global governance. As a respected member of the global economic community, Hong Kong should make its voice heard.

You can watch most of the podcasts on www.ineteconomics.org or www.fginstitute.org.

THINK ASIAN By ANDREW SHENG
Tan Sri Andrew Sheng is president of the Fung Global Institute. 

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