GE13: DAP, a clever ruse to kill two birds with one stone? Naughty, dishonest ROS?

A decision by the Registrar of Societies (ROS) not to recognise the DAP's central executive committee due to its controversial party elections held in December last year has kicked up a storm within the party's top brass. 

Lim Kit Siang in tears

A LETTER from the Registrar of Societies (ROS) on Wednesday has become a bone of contention with DAP leaders, who now want to contest the general election using the PAS and PKR symbols.

At an EGM at the party headquarters on Thursday night, the leaders debated the letter from ROS and at a press conference afterwards they slammed the ROS and its “despicable act” to stop the DAP from contesting in the elections.

The ROS letter, DAP claimed, means that its central executive committee (CEC) is now powerless, that its secretary-general Lim Guan Eng cannot sign any letter of authorisation for election candidates and that the DAP can no longer use its cherished Rocket symbol.

The letter, however, merely states that the ROS is studying the party's registration following a dispute among DAP members over the Dec 15 elections.

The letter also says, pending the final disposal of the dispute, the CEC that came into power after the elections is not recognised.

But the DAP seized the letter as an opportunity to grandstand and turn the blade against the Barisan Nasional, claiming that they have been made powerless and unfit to contest in the elections.

Guan Eng was visibly angry and his father, party adviser Lim Kit Siang, was in tears as they announced, with great emotional effect, the alleged import of the letter a day before nominations.

They also issued an ultimatum that the ROS must withdraw its letter by 3pm yesterday or the DAP will contest under the banner of its allies.

Any verbal reassurances by the Election Commission or ROS that the DAP could continue to use its Rocket banner and issue authorisation letters were not good enough.The ROS letter must be withdrawn.

With an eye on the Chinese voters, the DAP has interpreted the ROS letter as it wants and is laying down impossible conditions that government agencies cannot adhere to.

The ROS has been probing a dispute over the Dec 15 CEC elections after several DAP members lodged complaints with the ROS and demanded action.

Their complaints centred on a rectification of the results announced by the party, nearly a month after the party elections, that an error had occurred in the counting of votes using a spreadsheet software.

In the rectification, Guan Eng's political secretary Zairil Khir Johari, who initially lost in the election of 20 CEC members, had actually won the 20th spot.

The party claimed the delay in announcing the new results was because of the holiday season and on learning the mistake, the DAP had bravely faced it and rectified it.

But members cried foul and started going to the ROS, complaining about various shortcomings in the election, including alleging that there was a deliberate attempt to manipulate the results.

They alleged that no Malay candidates had won and that the party leaders saw fit to “elect” one after the elections were long over.

They also alleged that over 700 party members were not notified of the AGM and had not participated and had they voted, the results would have been different.

The DAP members from Sepang, Seremban and Johor have been persistent in their complaints, even bringing their own counsels to the ROS.

Zairil, after his election as a CEC member, was named as candidate for the Bukit Bendera parliamentary seat, vacated by Liew Chin Tong who has moved to contest the Kluang parliamentary seat.

Whether intentionally or not, the ill-timed letter from the ROS has been seized by the DAP for its own grand theatre ahead of nominations today.

Inevitably, the Barisan is on the receiving end of a drama that is played before the Malaysian public, as a case of outright repression of the DAP.

This despite a statement by ROS director-general Datuk Abdul Rahman Othman, issued late yesterday, that the DAP is not de-registered and that the party can use the Rocket symbol.

Deregistration is not a new thing in our politics and has happened many times before, including to Umno in 1988, and if any such calamities were to fall on the DAP, it is not an exception but the rule. It is how the ROS keeps political parties in check.

But for now, the fact remains that the ROS letter does not even mention deregistration but the DAP leaders are stretching it, for their own political purposes, to read what they want into it an act of repression against the DAP.

As such, they say they have no choice but to use the PAS and PKR symbols.

DAP has been grandstanding on using the PAS symbol since last month and PAS has been reciprocating that the DAP is free to use the party's moon symbol.

The political implications of this are obvious the DAP using the PAS symbol will force Chinese voters to view PAS favourably while at the same time dispelling the notion, held among many Malays, that the DAP is Chinese-centric, anti-Islam and anti-Malay.

It's a clever ruse by the DAP, helped along by PAS, to kill two birds with one stone.

COMMENT
By BARADAN KUPPUSAMY

---------------------------------------------------------------------------------------------------------

Naughty, dishonest ROS

QUESTION TIME  It looks like other Malaysian bodies besides those responsible for curbing corruption are being “naughty and dishonest”, the latest being the Registrar of Societies (ROS) which has draconian powers to oversee societies, including political parties.

Sarawak Chief Minister Abdul Taib Mahmud famously (notoriously?) labelled the Malaysian Anti-Corruption Commission’s (MACC) investigation of himself for graft as “victimisation”, and reserved his cooperation because he believed that they have been “naughty and dishonest”.

"They (MACC) don't deserve my cooperation because they have been naughty... and they have not been honest," he said recently.

Change some names, and the DAP is now a victim of “naughty and dishonest” investigation by the ROS. This is likely closer to the truth than the MACC allegations by Taib who continues unscathed despite everything. What’s more, delve deeper into the latest issue and you will wade deep into a conspiracy theory to rival any book by Jeffrey Archer.

The DAP - yes, to its discredit then - had a “technical glitch” during its December elections for the central executive committee (CEC) which resulted in a minor revision to its election results. The studious ROS began investigations, but only decided not to recognise DAP’s CEC several months later, yesterday - just two days before nomination day. How convenient.

According to DAP secretary-general Lim Guan Eng, the letter was faxed to the DAP headquarters at 5.45pm yesterday in very questionable circumstances.

In a report by Malaysiakini, Lim (above) told reporters that ROS director-general Abdul Rahman Othman had personally met him in his office in Penang on April 5, where the latter agreed to postpone the ‘routine’ investigations in view of the looming elections to May 9, four days after the elections.

“Abdul Rahman personally guaranteed to me that he would not make any decision until investigations are complete, and until he obtains a full report from his investigator.”

But then the letter not to recognise the DAP’s CEC still came.

Lim has cried foul, and indeed that is what it is, coming so late in the day when the ROS has had many months to investigate the “technical glitch”.

Meantime, the Election Commission said that the DAP will be able to field candidates as usual on nomination day, regardless of the Registrar of Societies' decision to suspend the party's central committee.

'No comfort at all for DAP'

Should that not give some comfort to DAP that it can contest under its own banner and put up its own slate? Apparently not, and here is where the conspiracy and plot thickens and links up with the other ingredients for a good, juicy stew.

What gives? If the ROS does not recognise the DAP’s CEC and has given notice to the DAP that it does not recognise the CEC before nomination day, how can the CEC make any legally binding decision on its slate of candidates? There is the possibility that its entire slate of candidates can be disqualified on nomination day itself.

Even if they are not on nomination day tomorrow, post-elections, it is possible to challenge the legality of DAP’s candidates. A compliant judiciary could negate the results of elections where DAP candidates stood. And if DAP MPs and state assemblypersons are suspended on Monday May 6 - the day after the elections - via court injunction, power can’t be handed over.

Thus far, three agencies are implicated in this conspiracy: The ROS with its draconian powers granted during ex-PM Dr Mahathir Mohamad’s (right) dictatorial grip on the country when he tightened laws for societies to bring them under control; the supposedly independent, but not so independent Election Commission and its assurance which may lull DAP into complacency; and a compliant judiciary, courtesy again of Mahathir, which may be willing to play ball.

The bigger question is, who is the puppeteer pulling the strings behind the curtains? And are they actually so desperate and so fearful of losing as to resort to such measures to deny free and fair elections to remain in power? Indeed, is there such a plot in the first place?

Obviously, the DAP cannot and will not take chances, and unless it has iron-clad assurances that it can use its own logo and put up its own candidates, it will go ahead with its plans of standing under the PAS banner in the peninsular, and PKR for Sabah and Sarawak.

If they have to, it will be a major challenge, but the plot will backfire for those who may have engineered this whole thing. It will only help to push the somewhat disparate partners in Pakatan Rakyat even closer together and hasten the day when they will all stand under one banner.

And it is going to sicken further all right-thinking, reasonable and responsible Malaysians who badly - very badly - want to see elections fought on even terrain with everyone given equal opportunity to express their views and get their message across. So no one has an unfair advantage or obstacle.

Any measure which further enhances Pakatan Rakyat’s image as the underdog will help the coalition more than it harms.

BY P Gunasegaram
P GUNASEGARAM is founding editor of KiniBiz. He enjoyed reading Jeffrey Archer’s “First Among Equals”, especially the final twist about who would become prime minister.

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Love triangle led to murder of teenage girl !

PETALING JAYA: A love triangle is believed to be the reason for the brutal murder of Parhwine Lucia Mejia Kaur (pic), whose body was found in a drain near a football field in Bandar Puchong Jaya on Tuesday.

Serdang OCPD Asst Comm Abdul Razak Elias said investigations revealed that the 18-year-old might have been the victim of a love triangle that went awry.

He added that Parhwine's boyfriend, who is in his 20s, was detained a few hours after her body was found at 6.50pm. Her motorcycle was found some 50m away.

“He is the prime suspect. However, there is a possibility that there were others involved as well,” he said yesterday.

It is learnt that Parhwine was murdered after a quarrel with her boyfriend over his “indiscretions” with another woman.

The boyfriend was said to have cheated on her with another girl and sources revealed that the boyfriend was the last person seen with the victim before she died.

ACP Abdul Razak said police were also investigating several blogs which picked up the story on the murder.

“Some blogs had highlighted a comment on the victim's Facebook page, taunting the police saying Parhwine's murderer will never be caught.

“We are working together with the Malaysian Communications and Multimedia Commission to find out who had posted the comment. It may also have been a sick joke posted by a hacker,” he said.

ACP Abdul Razak said a post-mortem revealed that Parhwine died due to loss of blood from severe neck injuries. Parhwhine was reported missing on Monday, a day before her body was found.

Friends and family members told the police that the victim knew the suspect for only four months and that they were always arguing.

ACP Abdul Razak urged anyone with information to call the police hotline at 03-2052 9999 or visit the nearest police station.

By FARIK ZOLKEPLI and AUSTIN CAMOENS The Star

12-year-old Ye Wocheng set to smash age record in golf

Twelve-year-old Ye Wocheng is set to rip Guan Tianlang’s record when he tees off at the Volvo China Open in two weeks’ time.

 

BEIJING: China’s Guan Tianlang astonished the world when he made the Masters cut at the age of 14, but his record as the European Tour’s youngest ever player is set to be ripped up by a boy aged only 12.

In two weeks’ time, Ye Wocheng, a precocious pre-teen from the country’s southern region, will lower Tianlang’s record to scarcely believable territory when he tees off at the Volvo China Open, organisers confirmed yesterday.

It comes just a year after Tianlang played the same event in Tianjin aged 13 and 177 days. He followed that with a bravura performance last week at Augusta National, finishing with the Silver Cup as the Masters’ top-placed amateur.

Should Wocheng make the cut, he will easily outdo Hong Kong’s Jason Hak, who became the youngest player to reach the weekend rounds of a European Tour event, aged 14 and 304 days, at the 2008 Hong Kong Open.

In Tianjin, Wocheng will compete for the spotlight with a group of ultra-young Chinese players, including Tianlang and Andy Zhang, who became the youngest US Open competitor last year at the age of 14.

Bai Zhengkai, 15, is also in the field, thanks to his victory in last year’s Volvo China Junior Match Play Championship, as is America’s Jim Liu, who in 2010 became the youngest US Junior Amateur champion at the age of 14.

They will come up against a strong contingent of seasoned pros at the joint European Tour and OneAsia event, headed by former winner Paul Casey, India’s Jeev Milkha Singh and 2014 Ryder Cup captain Paul McGinley.

“I’m especially looking forward to seeing how young Ye Wocheng gets on, and I know that there are plenty of other youngsters who are soon going to be household names,” McGinley said in a press release from organisers.

Liang Wenchong, 34, one of only two Chinese men to win on the European Tour and his country’s top-ranked player at 170, said the new talent would pose a genuine threat in the May 2-5 tournament at Tianjin Binhai Lake Golf Club.

“Obviously I would love to win my own national Open, but I know the challenge is getting ever greater as our home-grown talent is improving all the time,” said Liang.

Wocheng, from Dongguan near Hong Kong, earned his spot by winning a qualifying tournament in March, while Tianlang and Zhang are both playing on sponsor’s invites. — AFP

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A star in the making: Guan Tianlang in action during  the second round of the Masters at Augusta on Friday. —AFP

CHINESE schoolboy Guan Tianlang rocked the golfing world on Friday by making the cut at the 77th Masters despite being penalised one shot for slow play in the second round.

But he needed to endure an agonising wait of several hours until the final grouping came in to be sure that he had survived.

The 14-year-old from Guangzhou, who is the youngest player in Masters history, was sanctioned as he played the 17th hole. That meant he came in with a three-over par 75 and stood at four-over 148 after 36 holes.

Making the cut were the top 50 and level plus all players within 10 strokes and with the halfway lead later established at six-under 138, Tianlang was safely through, right on the limit, to play at the weekend.

He will be the youngest to play on Saturday and Sunday at the Masters and he is the first player from mainland China to make the cut in the year’s first Major.

Tianlang is also certain to win the Silver Cup, which goes to the top amateur who completes 72 holes, as his five amateur rivals all failed to make the cut.

The Asian prodigy became the youngest player in the history of the Masters on Thursday when he carded a one-over 73 that included four birdies and five bogeys.

On Friday, he dropped two shots at the fourth and seventh, as heavy rain fell on Augusta National, to reach the turn in 38.

But with the weather brightening, he then calmly picked his way around the fearful Amen Corner – holes 11, 12 and 13 – without dropping a stroke.

He was parring his way in from there when referee John Paramor walked onto the course after Tianlang had played his second shot and informed him of the penalty sanction, having warned him already on the 13th hole.

“I played pretty good today,” said Tianlang speaking after his round, but before he knew he had made the cut. “I know the rules pretty good. This is what they can do.”

Tianlang became the first player punished for slow play in a Major since Frenchman Gregory Bourdy at the 2010 PGA Championship.

“This still is a wonderful experience for me,” Tianlang said. “I have enjoyed playing in the Masters and I think I did a pretty good job.”

Playing partner Matteo Manassero said he had sympathy with Tianlang given the gusting winds that affected Augusta National on Friday, but he agreed that the Chinese youngster had been slow to play.

“I think it’s the biggest thing he needs to be careful about, because I think he’s ready,” the Italian said.

“When the caddie pulls the club for him, I think he’s ready. But he just sometimes ... takes a little too long. He just asks questions that I think he knows, as well, but just to be sure, just to be clear in his mind.

“This certainly will be a very valuable lesson. He will never forget it for sure, and he will learn from it.”

The leader at the halfway stage, Australian Justin Day, said he had been unaware that he could have eliminated Tianlang had he birdied one of the last two holes as that would have nudged him out of the 10-stroke zone.

Making the cut at such a high-pressure tournament at the age of 14 was beyond belief, he added.

“He’s 14 years old. He’s got everything to gain and nothing to lose, because he’s got a lot of growing to do. He’s still in school.

“Obviously it’s an amazing achievement to get to the weekend at Augusta. And being able to play and experience what he’s going to experience on the weekend, you can’t buy that stuff.

“The only way you can do that is get to the weekend, and obviously he’s got a boatload of talent.

“You know, he’s been here preparing for two weeks. I talked to him earlier, and he seems like a really, really good kid.

“It’s unfortunate that he received the penalty, but he can learn from that and move on and hopefully can play well over the next two days.” — AFP

U.S.-AUGUSTA-GOLF-2013 MASTERS-GUAN TIANLANG China's Guan Tianlang (Front, R) competes during the second round of the 2013 Masters golf tournament at the Augusta National Golf Club in Augusta, Georgia, the United States, April 12, 2013. Guan shot a three-over par 75 Friday and stood at four-over 148 after 36 holes. (Xinhua/Hunter Martin/Augusta National) 

The 14-year-old Chinese golfer Guan Tianlang, the youngest player ever to compete in Masters, impressed the 77-year-old tournament with a 1-over 73 show on Thursday. Not the best, but good enough.

Guan was also the youngest Major tournament participant in 148 years. Catching four birdies in the 18-hole competition, the schoolboy won the cheer and applause from all around the field.

"It's the most amazing experience I've ever had," said Guan. "I was a little bit shaky at the beginning, but a good first shot erased my nervousness.

"I feel OK for my day. I made no big mistake and hit a couple of birdies. It feels like victory already."

Guan did better than golf legend Arnold Palmer and Jack Nicklaus when they made their first Masters show (both finished at the score of 76), according to ESPN stats. His 1-over 73 was also better than the first two top Chinese golfers to have played at Masters, Zhang Lianwei (2004 tournament, 77) and Liang Wenchong (2008 tournament, 76).

If Guan finished at the same ranking as Thursday's 46th, he would become the youngest golfer and first Chinese to advance into the second round at Masters.

Spanish star Sergio Garcia shared the lead with Marc Leishman of Australia at 6-under 66. Tiger Woods finished 2-under 70.

"I won't put on too much pressure tomorrow," Guan said. "I will keep relaxing as today and focus on every hit."

"I will be happy if I make the cut," he added.

With the title of Asia-Pacific Amateur Golf Championship he earned last November, Guan qualified as the youngest competitor in the history of the Masters. The previous record was established by Matteo Manassero in 2010, when the 16-year-old earned an invitation after winning the British Amateur Championship in 2009.

Actually Manassero was one of the playing partners for Guan, the other was 61-year-old Ben Crenshaw.
"He played like a veteran today," said the impressed Crenshaw. "Played a beautiful round of golf."

Guan arrived at the court almost a month before the tournament, he enjoyed his practice with golf stars including Tiger Woods, Tom Watson and Ben Crenshaw.

"I was happy to practice with Tiger," said Guan, who picked up golf at the age of four. "Actually my golf career partly started because of him. He is my idol."

Guan was already expected to become "Chinese Tiger" or "Asian Tiger" , but there are still a lot of question marks before the junior middle school student can decide his future.

"Always focus and have fun," said Guan. 

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Facebook paparazzi

People should exercise a little consideration and common sense when uploading photos of others. 

I RECENTLY saw some extremely unflattering photos of a friend on Facebook.

One photo shows her at a party with a drink in one hand and a cocktail sausage on a stick in the other. Her mouth is half open as she guides the sausage towards it, and her eyes have a wild, glazed look about them. The caption reads, “Come to Mama!” In another photo, she’s drinking her wine with one eye closed and the other rolling upwards, as she hovers around the half empty platter of sausages. In yet another photo, she’s sitting on a sofa with her blouse unflatteringly bunched up over her stomach, giving the impression that she’s just about to give birth – possibly to a giant sausage.

If you didn’t know this woman, you’d probably mistake her for a humongous wine-glugging sausage scoffer.

Damage

In reality, she’s a moderate drinker of average weight who only ate one sausage that night. But the damage has already been done. The Facebook friends of the woman who posted the photos, many of whom probably don’t know my friend all that well, will have already formed an opinion of my friend just by looking at those photos.

Like who cares what strangers might think about us? Some of you might be saying just about now. And you do have a point, to a certain extent. But what if you’re going for a job interview and the person responsible for hiring you doesn’t know you but remembers seeing you in a Facebook photo stuffing your face and looking as if you like to lubricate yourself way too much? And what if the job you’re after entails operating heavy, dangerous machinery; or dispensing potent medication; or anything to do with air traffic control? Jobs that require a clear head at all times.

All I can say is that you’re screwed. You might as well burn your interview clothes, delete the carefully worded résumé and drown your sorrows in a bottle of chardonnay.

In the same way that celebrities are wary of the paparazzi, who take great pleasure in snapping them falling out of bars and nightclubs in the wee hours of the morning in a dishevelled state, or going to the grocery store for a loaf of bread without any make-up, regular, everyday people now need to be extra careful when someone whips out a camera or an iPhone at a social function.

I have nothing against my photo being taken and subsequently being posted on Facebook, but I wish that people would exercise some consideration and common sense when uploading photos of others.

We all know Facebook is full of narcissistic, egocentric, self-absorbed photographers. We see evidence of their activities in newsfeeds every day. For example, I’ve seen photos of a certain young woman (who shall remain nameless) buying a pair of shoes, photos of her feet in the new shoes, photos of her wearing a dress with her new shoes, photos of her dancing at a party with her new shoes, and photos of her delicately eating sausages and consuming alcohol with her new shoes.

What she doesn’t show you are the photos of her wincing in her bunion-forming shoes after two minutes dancing, photos of her in her new shoes throwing up in the toilet bowl, and photos of her with just one new shoe on, passed out on her bedroom floor …

Such people are usually very careful when it comes to selecting photos that show them in a good light, but when it comes to others, they don’t always accord them the same respect.

Offending photo

Whenever I want to upload a photo that includes other people onto Facebook, I ask myself if those people would be happy seeing themselves as they are depicted. And if the answer is no, I simply delete it. I know it’s easy to remove your tag from a Facebook photo, but the photo still remains online for all to see.

Of course, you could write to your Facebook friend and ask him or her to remove an offending photo. But that would make you sound a bit like a narcissistic, egocentric, self-absorbed twat. And makes you a possible future target for such photographers, who might claim that they’re only having a bit of harmless fun. And besides, where’s your sense of humour?

It would be enough to make you choke on your sausage.

BUT THEN AGAIN
By MARY SCHNEIDER

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N. Korea under restraint by China

China knows when to mount pressure on the DPRK and tell its ally what to do for the sake of its Asian neighbours’ interests in the region, say Chinese political analysts.

North Korea nuclear weapons could hit ....

TALKS that China has lost its influence on North Korea have emerged again as the Democratic People’s Republic of Korea (DPRK) is reported to be ready to launch a missiles attack on the Korean Peninsula.

The standard calm reaction and seemingly lack of action against DPRK by China have been the reasons why the international community feels that the China factor in the DPRK administration is fading.

But, China is not a country that one should underestimate. China knows when to mount pressure on DPRK and tell its ally what to do for the sake of its Asian neighbours’ interests in the region, said Chinese political analysts.

Historically, China and DPRK established solid strategic relations and partnership when the former entered the Korean War in support of DPRK in 1950.

During the war between 1950 and 1953, China sent as many as three million volunteer soldiers to assist the DPRK forces fight the Americans and South Koreans in the name of United Nations on the peninsula.

About 180,000 Chinese soldiers, including Mao Zedong’s son Mao Anying, were killed.

Since the end of the war, China and DPRK have continued their cooperation in security and defence issues. But in recent years, China has turned more of a peacemaker instead when tension occurs between North and South Korea.

In the Takung Pao newspaper’s editorial, veteran political analyst and The International Chinese Newsweekly correspondent Ji Shuoming said DPRK intentionally flexed its muscles to wage war in retaliation of a recent joint South Korea-United States military exercise.

He said the tension on the peninsula had been escalating with the North Koreans telling ambassadors, diplomats and tourists in South Korea to evacuate, as their forces were prepared to launch their missiles.

“At the UN Security Council meeting (in March), in a rare decision, China voted in favour of new sanctions on North Korea in view of its nuclear weapon tests. This has somehow caused North Korea’s hostility against China.

“North Korea is going too far by dragging itself to the edge of a war. The US, South Korea and Japan hope that China will restrain North Korea but some people say China has not been able to restrain North Korea anymore.

The Chinese leaders and the Chinese Communist Party-run newspaper recently sent out a clear message to North Korea, and this shows that China still has a degree of influence over North Korea,” he said.

Ji said that in past conflicts, China would talk about brotherhood and defend North Korea and this had made its ally a spoiled kid and had made it difficult to fundamentally solve the problem.

Today, China has chosen a more international approach. When North Korea goes against the international regulations, China will firmly safeguard the international interests. But this does not mean that China has lost its influence and it’s just that it is assessing the pros and cons of the influence, Ji added.

Nankai University International Relations Department Associate Prof Yang Lei was quoted by Global Times as saying that in the past, North Korea employed the approach of causing tension and then implying the possibility of dialogue and negotiation after achieving its target.

“North Korea continuously escalates its offensive rhetoric to draw the attention of the international community. It hopes that surrounding countries can get involved and provide a way to ease the situation,” he said.

He said China was adjusting its policy on North Korea according to the changing US and South Korean policies on North Korea but China could still continue to impose necessary sanctions on North Korea to make its ally aware of the importance of outside help and the strategic Chinese support.

“Such pressure should push North Korea to ease relations with South Korea.

“Then the next step for China is to persuade North Korea and South Korea to hold dialogue and offer North Korea a way out,” he said.

In its editorial, China Daily said the situation on the peninsula was dangerous and any miscalculation by any party might prove disastrous to the region.

The newspaper said Pyongyang might have adequate reasons to demonstrate its security concerns that was entitled to enhance its national defence and develop its science and technology, but it had no excuse either to defy the UN resolution requiring it to drop its nuclear programme.

“The tactic (employed by North Norea) is dangerous ... As a close neighbour of the two Koreas, China will not allow troublemaking at its doorstep.

“The message is loud and clear that it opposes any move to resolve the dispute by force,” it said.

MADE IN CHINA By CHOW HOW BAN

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Looming danger on contrast and competition of economic models

The successful East Asian model of ‘state-driven capitalism’ is being threatened by TPPA proposals.

The Trans-Pacific Partnership (TPP) is a secretive, multi-national trade agreement that threatens to extend restrictive intellectual property (IP) laws across the globe and rewrite international rules on its enforcement.

MANY articles and books have been published on the contrast and competition between the present Western and the Asian-style economic models.

Western countries are said to have the free-market model based on competition among private firms, with the government taking a hands-off approach.

East Asian countries are branded as practising “state capitalism” in which the government plays a major role in helping the local private sector and the state also fully or partially owns many enterprises.

The Western countries are increasingly attacking the Asian model, claiming that state-owned companies or state-aided commercial firms have an unfair advantage vis-à-vis foreign firms competing with them.

In our region, countries with a substantial role of the state include China, Malaysia, Vietnam and Singapore. Of course, in Japan and South Korea, their domestic firms grew to become world-beaters with the systematic backing of their governments.

For these countries, the so-called state capitalism (or in the case of socialist countries, market-oriented socialism) have worked well through industrial development and relatively high and sustained economic growth.

Some Western countries have been trying to curb or even eventually eliminate the Asian model of state-owned or state-aided capitalism.

This is largely hypocritical because the America, European and Japanese agricultural sectors are highly subsidised and protected; many of their farms could not survive without massive state aid and high import tariffs.

Many of their banks and industrial firms are also subsidised in various ways, including through multi-billion dollar bailouts in the wake of the recent financial crises.

This has not stopped these countries from attacking the Asian model. The latest attempt to curb this model is through the negotiations in the Trans Pacific Partnership Agreement (TPPA), a trade and investment treaty involving the United States, Canada, Malaysia, Singapore, Vietnam, Brunei, Peru, Chile, Australia and New Zealand.

The TPPA contains an important section on State-Owned Enterprises (SOEs), championed by the United States and Australia.

The TPPA drafts are secret, so the text of the SOE section is not known. However, it can be anticipated that the section will contain disciplines to curb and shape the behaviour of three types of SOEs.

The recently concluded US bilateral FTAs contain a competition chapter that deals with two types of SOEs. For example, the US-Peru FTA has disciplines on designated monopolies and state enterprises, and it is likely that the United States will propose something similar in the TPPA.

That FTA says that government monopolies shall act solely in accordance with commercial considerations, including with regard to price, quality, availability, transportation, when buying or selling the monopoly goods or services.

They shall provide non-discriminatory treatment to investments, goods and services of other TPPA members. And they shall not use their monopoly position to engage in anti-competitive practices through its dealings with its parents, subsidiaries or other enterprises with common ownership in a non-monopolised market that adversely affect the investments of other countries.

State enterprises shall similarly provide non-discriminatory treatment in the sale of goods or services to investments of other countries.

More importantly, the United States and Australia are proposing a third type of SOE to be subject to disciplines. According to press reports, Australia has also introduced the principle of “competitive neutrality” to discipline the SOEs.

How this principle will apply can be anticipated from the Australian government’s competitive neutrality guidelines.

This is based on the concept of a “government-owned business”. The state-owned business enterprise which competes with private companies may obtain advantages, impeding the ability of the private sector to compete on equal terms.

According to the Australian guidelines, these advantages include exemptions from taxes; cheaper debt financing (because of the low-risk classification or government guarantees); absence of need to make a commercial rate of return; and exemption from regulatory constraints or costs.

To offset these advantages, the Australian guidelines cover how government businesses should pay taxes in full; pay back to the central government the difference in their loan costs vis-à-vis private sector loan costs; pay licence fees equivalent to the central government; and ensure they obtain a commercial rate of return.

It is likely therefore that the draft of the TPPA will have disciplines along the lines above on a third category of SOEs, government-linked business entities involved in commercial activities that compete with the private sector.

The proposed disciplines could be along the line that “advantages” enjoyed by government-linked businesses such as those mentioned in the Australian guidelines be disallowed.

The implications for Malaysia, Vietnam and Singapore would be serious because their national economies are characterised by important roles of state-owned enterprises or government-linked companies.

The countries would have to move away from their successful development model and economic structure.

Moreover, SOEs have many functions including providing social services to the public, ensuring that poor and vulnerable groups are given special consideration.

This often means that SOEs cannot operate on solely commercial grounds; and that several of them depend on government subsidies and assistance, and there are also cross-subsidies in that the profitable aspect of an SOE may finance non-profitable (but socially important) activities. There is a danger that the TPPA section on SOEs will prevent or hinder the socially useful functions of SOEs.

The TPPA negotiations are still going on, and a text on the SOEs section is not yet final, so there is scope for different views to be expressed.

GLOBAL TRENDS By MARTIN KHOR

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New economic thinking

LAST weekend, over 400 top economists, thought leaders, three Nobel Laureates and participants gathered in Hong Kong for the fourth Annual Institute for New Economic Thinking (INET) conference, co-hosted by the Fung Global Institute, entitled “Changing of the Guard?”



So what was new?

In the opening session, Dr Victor Fung, founding chairman of Fung Global Institute, quoted Henry Kissinger as saying, “Americans think that for every problem, there is an ideal solution. The Chinese, and Indians and other Asians think there may be multiple solutions that open up multiple options.”

That quote summed up the difference between mainstream economic theory being taught in most universities and the need to build up a new curriculum that teaches the student to realise that there is no flawless equilibrium in an imperfect world and that there is no “first-best solution”.

Instead, what is important is to teach the aspiring economist to ask the right questions, and to question what it is that we are missing in our analysis. It is important to remember that theory is not reality, it is only a conceptualisation of reality.

Nobel Laureate Friedrich Hayek, one of the leading thinkers on open societies and free markets, explained why the practice of mainstream economics is flawed. In 1977, he said, “A whole generation of economists have been teaching that government has the power in the short run by increasing the quantity of money rapidly to relieve all kinds of economic evils, especially to reduce unemployment.

Unfortunately this is true so far as the short run is concerned. The fact is that such expansions of the quantity of money, which seems to have a short-run beneficial effect, become in the long run the cause of a much greater unemployment. But what politician can possibly care about long-run effects if in the short run he buys support?”

Sounds familiar on present day quantitative easing?

In his 1974 Nobel Laureate Lecture entitled “The Pretense of Knowledge”, Hayek showed healthy scepticism: “This failure of the economists to guide policy more successfully is closely connected with their propensity to imitate as closely as possible the procedures of the brilliantly successful physical sciences an attempt which in our field may lead to outright error.”

Hayek understood what is today recognised as quantitative model myopia. What cannot be easily measured quantitatively can be ignored. Then it is a small step to assume that what can be ignored does not exist. But it is precisely what cannot be measured and cannot be seen the “Black Swan” effect that can kill you.

In other words, economists must deal with the real world of asymmetry information, that there exists Knightian uncertainty, named after University of Chicago economist Frank Knight, what we call today unknown unknowns.

Unknown unknowns arise not just from accidents of Mother Nature, but from the unpredictability of human behaviour, such as market disorder, which is clearly complex and ever-changing.

If unknown unknowns are common in real life, then a lot of the economic models that appear to give us precise answers may be wrong. In other words, for every question, there is no unique answer and the solutions are “indeterminate”.

George Soros, who helped found INET, explained his theory of reflexivity based on the complex interaction between what he called the cognitive function (human conception of reality) and the manipulative function (the attempt by man to change reality).

His theory of reflexivity in markets differs from mainstream general equilibrium theory in one fundamental aspect. General equilibrium models assume that market systems are self-equilibrating, going back to stable state. Borrowing from engineering systems theory, we now know that this is a situation of negative feedback a system that gets disturbed fluctuates smaller and smaller till it returns to stable state.

The trouble with nature and markets is that positive feedback can also happen. The fluctuations get larger and larger until the system breaks down. Nineteenth century Scottish scientist James Maxwell discovered that steam engines can explode if there is no governor (or automatic valve) to control the steam building up.

At about the same time, English bankers learnt that banks can go into panic regularly without the creation of a central bank to regulate the system. Markets therefore need a third party the state to be the system “governor”. Free market believers think that the market will take care of itself. John Maynard Keynes was the first to recognise that when free markets get into a liquidity trap, the state must step in to stimulate expenditure and get the economy out of its collective depression.

In the 21st century, we have evolved beyond Keynes and free market ideology. Belief in unfettered markets has created a world awash with liquidity and leverage, but the capacity of advanced country governments to intervene Keynesian style has been constrained by their huge debt burden.

Larry Summers has pointed out that Keynes invented not a General Theory, but a Special Theory for governments to intervene to get out of the liquidity trap. The fact that we are still struggling with the liquidity trap means that economists are searching for new solutions, such as borrowing from psychology to explain economic behaviour.

The INET conference introduced the thinking of French literary philosopher, Rene Girard, and his theory of memetic desire, to explain how social behaviour more often than not get into unsustainable positive feedback situations, either excessive optimism or pessimism. How do you get out of such situations? Girard introduced the concept of sacrifice. We will have to wait for the next conference to explore this new angle.

Intuitively, all life is a contradiction. The sum of all private greed is not a public good. It does not add up. Someone has to sacrifice, either the public or a leader.

Schumpeter's great insight about capitalism is that there is creative destruction. He only restated the old Asian philosophy that change is both creative and destructive. But out of change comes new life.

In sum, contradictions are creative. What is new is often old, but what is old can be new.

 
Tan Sri Andrew Sheng is president of Fung Global Institute.