Malaysia revised budget 2016 to GDP growth 4.0%~4.5% from original 4.0%~5.0%

PUTRAJAYA: The Government’s recalibrated Budget 2016 reinforces its pledge to look after the people in times of economic challenges.

The adjustments – reflected in 11 measures to be undertaken – largely serve to cushion the impact of the increase in the cost of living.

In presenting the adjustments yesterday, the Prime Minister said the recalibration and restructuring of Budget 2016 centred on the need to ensure the economy remained on a strong growth trajectory and to protect and safeguard the welfare and wellbeing of the people.

“These measures are proactive, transparent and realistic, in tandem with the current global economic challenges,” Datuk Seri Najib Tun Razak said in his 46-minute address to a packed audience comprising ministers, senior civil servants, economic stakeholders, foreign missions and representatives of non-governmental organisations.

Also present were Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah, Chief Secretary to the Government Tan Sri Dr Ali Hamsa, Treasury secretary-general Tan Sri Dr Irwan Serigar Abdullah and Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz.

Najib said the recalibration was within the range of initiatives and allocation of the Budget approved by Parliament last year, and emphasised that Malaysia was neither in economic nor technical recession.

He noted that other countries were also affected by the slowdown, with world trade anticipated to be moderate from 4.1% to 3.4% and economies such as the United States, Brazil and China expected to grow at a slower pace.

“This trend proves that we are not alone in facing the global economic challenges. Other countries too, are affected by the uncertainties,” he said, adding the drastic decline in world crude oil prices had a significant effect on the nation’s revenue.

The strengthening of the US dollar also affected the economy and the ringgit, which depreciated by 11.3% from RM3.77 in June last year to RM4.25 as of Wednesday, said Najib.

Other currencies also affected are Brazil’s Real which depreciated by 23.2%, China’s yuan (-5.7%), Cana­dian dollar (-11.3%), Russian ruble (-29.3%) and Singapore dollar (-5.6%) against the US greenback.

“In fact, the ringgit is underva­lued and does not reflect the true economic fundamentals. However, the ringgit is expected to better reflect the strength of the economy when the global financial market stabilises and oil prices recover to more reasonable levels,” said the Prime Minister.

Sources: The Star  mazwin nik anis, foong pek yee, ho wah foon, joseph kaos jr, adrian chan, tho xin yi, tashny sukumaran, victoria brown, nurbaiti hamdan, akil yunus, hanis zainal, joash de silva, andrebecca grace rajaendram

Malaysia can withstand oil shocks

Meeting the media: (from left) Irwan, Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar and Bank Negara governor Tan Sri Zeti Akhtar Aziz at the 2016 Budget recalibration forum

PUTRAJAYA: Malaysia can withstand sustained oil price decline to US$25 (RM105) per barrel.

According to secretary-general of Treasury Tan Sri Mohd Irwan Serigar Abdullah, the various scenario analyses conducted by the Government showed that Malaysia would still be able to sustain its economic growth and its recalibrated Budget 2016 would remain on track as long as crude oil prices remain above US$25 per barrel.

He, however, acknowledges that if oil prices were to go any lower than that, there will be great challenges, not only for Malaysia, but also for the global economy.

“In our estimation (for Budget 2016 revision), we even went to US$25 per barrel and we find that the budget will still be intact ... that is not a problem because we have a lot of measures in place,” Irwan said.

“But if it goes further down to US$20 or US$15 per barrel, it will be a world recession! Every oil-producing country will face a problem,” he told reporters at a forum after the Budget 2016 recalibration announcement here yesterday.

The Government had been forced to revise its Budget 2016 three months after tabling it in Parliament due to the continuous decline in global crude oil prices.

The recalibrated Budget 2016 saw the Government lowering its average-price assumption for Brent, which is the international oil benchmark, to US$30-US$35 per barrel, compared with US$48 per barrel under the original Budget 2016 when it was unveiled in October last year.

Under the recalibrated Budget 2016, the Government’s revenue is expected to decline by 3.5%-4.2% to RM216.3bil-RM217.9bil, compared with the originally estimated RM225.7bil, while its total spending (operating and development expenditure) will be cut by 3.0%-3.6% to RM255.7bil-RM257.2bil from the initially proposed RM265.2bil.

“Most of the forecasts by analysts and research institutes expect oil prices to average at US$30-US$40 per barrel this year. But we have taken a more conservative estimate of US$30-US$35 per barrel.

“If it goes below US$30 per barrel, we can still sustain economic growth; it won’t affect the budget that much, given the various mechanisms we have at hand,” Irwan said.

Brent crude was traded at around US$33.50 per barrel yesterday. Last week, prices of the commodity fell to a 13-year low of around US$28 per barrel.

Irwan said the Government was expecting additional income from various sources to act as “buffer” if oil prices declined further.

He pointed out that the Government had yet to add this additional income into its revenue projection for the revised Budget 2016.

Among the new measures expected to generate extra income for the Government were the sale of telecommunications spectrums and greater reinforcement to reduce leakages in duty-free islands such as Labuan.

As for managing its expenses, Irwan said the Government would continue to optimise and slash unnecessary spending to manage its operating expenditure; and prioritise high-impact projects and programmes for the country’s growth and people’s well-being, while postponing non-critical projects to manage its development expenditure.

“In terms of reprioritising our development expenditure, what we are going to do is to go further into project-implementation planning.

“There are some projects that will be shifted to beyond 2016 but some important projects that will have an impact on people such as rural roads, schools and hospitals will continue to be implemented,” Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar said.

Wahid, together with Irwan and Bank Negara governor Tan Sri Zeti Akhtar Aziz, were the three panellists at the forum yesterday.

Essentially, Wahid said, the Government would continue to pursue its overall fiscal consolidation targets.

On that note, the fiscal-deficit to gross-domestic-product (GDP) target for 2016 remained unchanged at 3.1% under the revised budget.

Malaysia’s GDP growth, however, had been revised to a narrower range of 4.0%-4.5% for this year, compared with 4.0%-5.0% under the original Budget 2016.

“We have detected moderation in domestic demand,” Zeti said. “The key to support domestic demand is to boost private consumption by putting money into the pockets of consumers through income transfers,” she added.

She pointed out that the newly introduced measure to allow employees’ EPF contribution to be reduced by 3% between March 2016 and December 2017 was one of the ways to boost consumer spending.

However, she stressed: “These measures are only temporary because retirement savings are important.”

By Cecilia Kok The Star

Main points of Budget 2016 revision

KUALA LUMPUR: Datuk Seri Najib Tun Razak had on Thursday announced the revised Budget 2016 in the face of the fall in crude oil prices which has affected the government's revenue.

The Prime Minister said the government revenue would be based on Brent crude oil at US$30 to US$35 per barrel when compared with the US$48 when it prepared the Budget 2016 last year.

He also said the economy was expected to grow at a slower pace of between 4% and 4.5% when compared with the earlier forecast of 4% to 5%.

Later, Ministry of Finance Secretary-General Tan Sri Dr. Mohd Irwan Serigar Abdullah said the recalibrated Budget 2016 remains on track even if Brent crude oil prices were to deteriorate further to US$25 per barrel

Main points of Budget 2016 revision:

• Revised Budget 2016 will enable the government to save RM9bil
• Govt will maintain the Goods and Services Tax
• Fiscal deficit target at 3.1% of GDP
• Govt revenue to be based on Brent crude oil at US$30 to US$35 per barrel from US$48
• Trimmed GDP growth outlook for 2016 to 4%-4.5% from 4%-5%
• Govt debt to be reduced to 55% of GDP
• Govt will not peg the ringgit
• Govt to reduce EPF contributions for employees by 3% from March 2016 to December 2017, contributors from employers unchanged Govt to give special tax relief of RM2,000 to individual tax payers earning RM8,000 a month for year of assessment 2015
• Malaysia to restructure foreign labour system
• Govt to give special tax exemption for some selected income groups
• Govt to allocated RM5bil for the Higher Education Fund (PTPTN)
• Govt will liberalise the control on import quotas or approved permits for eight agricultural produce for temporary period. It includes raw coffee beans, buffalo meat, beef and mutton
• To enhance the efficiency and amount of tax collection, govt will double compliance and auditing efforts on tax evaders
• Govt to give special consideration on relaxation for penalty on taxpayers to encourage them to come forward and declare their past years’ income. The tax arrears must be settled before 31 December 2016.
• For duty-free islands, to reduce leakages which resulted in revenue loss of nearly RM1bil, the government will restructure the selling channel of cigarettes and liquors limited to duty-free outlets licensed by the Royal Malaysian Customs Department (RMCD)
• The free duty treatment on imported vehicles in duty-free islands will be tightened.
• However, the restructuring of sales on cigarettes, liquors and vehicles will not affect the tourists and locals who are residing in these duty-free islands
• Govt will optimise the revenue from the telecommunication spectrum through a redistribution and bidding process which will be implemented soon

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Hills clearing in Penang: NGOs not impressed with mitigation work at Botak Hill

http://www.thestar.com.my/metro/community/2016/01/28/searing-queries-on-clearing-ngos-not-impressed-with-mitigation-work-at-botak-hill/
An aerial shot taken from the bald patch on Bukit Relau, George Town, during a visit by the state delegation and NGOs to check on the mitigation work. — Photos: CHARLES MARIASOOSAY.

Chow (left) being briefed by technical consultant Khoo Koon Tai during the visit up Bukit Relau.

THE climb up the steep track on Bukit Relau is an arduous one. And there is little reward now for those who endure the climb.

The infamous Botak Hill seems to be getting balder. It’s a sad sight. What was once a lush hill had become a wide open patch of brown. Now, it is a giant scar of boulder, sand and concrete. The developer General Accomplish-ment Sdn Bhd is carrying out mitigation work which it says will be completed in June this year. For now, however, the hill looks worse than it did before.

The trip up the hill was arranged by the state and led by Local Government Committee chairman Chow Kon Yeow. Others in the entourage included Deputy Chief Minister 1, Datuk Mohd Rashid Hasnon, executive councillors, state assemblyman, Penang Forum and Malaysia Nature Society, Penang.

It was no surprise that the NGO members were not impressed with the mitigation work. The condition of the hill has deteriorated so badly. The only greenery in sight were patches of grass on the boulders.

The NGOs are even more upset that with less than six months before the mitigation work is completed, there seems to be no plan in place to halt the erosion of the hill or to carry out restoration work, which will have to include replanting of trees, the undergrowth and comprehensive hydroseeding.

Roads and drainage systems built right down the hill have destroyed whatever greenery there was. The explanation given was that the roads were needed for the mitigation work rings hollow. “How can you carry out mitigation work and clear more land for the so called roads for mitigation work,” asked a Penang Forum member.

There are metal poles bordering a part of the hill, and it look like some hoarding is about to come up. Is there any development being planned for the spot of the hill?

A spokesman for the developer, General Accomplishment Sdn Bhd said RM20mil has been spent so far for the mitigation work and the amount could rise to RM50mil.

“Why would you want to spend RM50mil for mitigation work if you are not going to do anything with the land,” asked a reporter.

“Well, we are open to development of the land if that is what the people want,” replied the project manager for the developer.

Chow was non-committal when asked if the state would reject any development on the land saying it was a “hypothetical” question as there wasn’t any application (to develop the land).

Despite the long explanation, the burning question remains.

Will the hill be restored to its old state and or is the mitigation work just the start of plans to develop the hill for housing.

It was rezoned for housing in 2012.

By K. Sekaran The Star

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We don't need billionaire philanthropists, we need change !

An elderly woman sitting inside a store at a border village near the demilitarized zone in Yeoncheon, South Korea, Jan on 8, 2016. PHOTO: REUTERS 

Society needs people who adopt business models that can enrich ordinary people's lives and free them from a life bound by servitude and dependency.

These days we praise charitable donations and philanthropy; however, we must understand that they are the symptoms of a dysfunctional society, not the remedy.

It’s similar to the Red Cross during wartime; they can’t stop the war. In many ways, they propagate the dysfunctions because the biggest funders of these temporary resolutions are also the greatest oppressors of our society, from whom these dysfunctions stem.

There are, for example, many people suffering around the world from curable diseases simply because they don’t have access to proper medical assistance. Why do they have no access? Because they are too poor.

That is to say, this problem is derived from the massive income inequality around the world. If they could earn a sufficient living on their own, they wouldn’t need any charitable aid from developed nations. They don’t need rich philanthropists giving them millions of dollars. What they need is rich philanthropists to stop hoarding money and allow them to make a sustainable living.

Let’s look at Bill Gates, who was simply driven to make as much money as possible at any cost. Along the way, he has smothered many smaller companies, copied others’ ideas, and snuffed out many innovative competing products. Yet, all is forgiven and forgotten because now he donates a lot of money.

It is exactly this type of thinking that breeds income inequality around the world, which leads to people dying from poverty, and thus preserves the need for these billionaire philanthropists to remedy the situation.

Another exemplary indication of this problem is Lance Armstrong. He cheated to further his career and eventually got caught. Yet, today he is still a millionaire and is respected by millions of people: 3.8 million followers on Twitter to be exact. Why? Because he is a philanthropist who donated lots of money to cancer charities. None of this would have happened had he not cheated, but people forgive and forget. In our society, winners prosper no matter the means, as long as they become philanthropists in the end.

Take a moment to think of the other cyclists who didn’t allow themselves to cheat. Where are they now? Can you name them? Are they rich and famous?

To address the real origin of the problem, we need to change the way we go about earning and spending money at the very basic level. Instead of being driven to become philanthropists, treat people around you without greed and with consideration. Make your living and enable others around you to do so as well. If you aim to save money in order to be a philanthropist, you provoke everyone to be protective and hoard money also in order to control how the money gets spent. The more everyone does it, the more we are compelled and even forced to do it. We need to stop this vicious circle.

The resolution I’m putting forward is not a utopian concept. We simply need more people investigating and adopting business models that can enrich ordinary people’s lives, which can free us from a life bound by servitude and dependency.

In turn, this would empower us to solve our societal problems without asking such billionaires to solve them for us with their accumulated wealth. Nowadays I’m starting to see more and more entrepreneurs and business owners trying to figure this out, and it is quite inspiring. I think the real change derives from the ordinary things we do.

If this type of mission is to succeed and be sustained, the principal function of business must be ordinary. It is impossible for a sustainable economy to remain healthy and upright if it is only supported by the crutch of charitable donations and philanthropy.

The principal drive to better our society must come from ordinary businesses.

Hero-worshipping rich benefactors and philanthropists encourages everyone to accumulate more wealth than they need. We do not need billionaire philanthropists; we need ordinary business owners who treat other humans with respect and encouragement.

They are not rare or even uncommon; they exist all around us if we look carefully enough. It’s just that we are so busy looking up to iconic figures like the Bill Gateses of the world that we can’t see them.

By Justin Hiraga
  / 
Asia News Network

Justin Hiraga is an assistant professor at the Department of International Business Languages of Seokyeong University in Seoul. He can be contacted at jthiraga@gmail.com. –Ed.

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Support TPPA because Chinese control trade and business in Malaysia?

Hadi: DAP supports TPPA because Chinese control business
PAS President Abdul Hadi Awang accused DAP for supporting the Trans-Pacific Partnership Agreement (TPPA) as the Chinese community controls most of the business in the country.

Penang Chief Minister Lim Guan Eng claimed that his party was firmly against Malaysia signing the deal as it would purportedly cause nearly 40 per cent of SMEs to close down. — Picture by K.E. Ooi

Accused by PAS of backing TPP for Chinese concerns, DAP insists firmly against trade deal - TPPA not about race or religion, Lim tells Hadi

The Trans-Pacific Partnership will be detrimental to Malaysians by causing prices to increase and killing off small— and medium-sized enterprises, Lim Guan Eng said today when reaffirming DAP’s rejection of the trade deal.

Disputing PAS president Datuk Seri Abdul Hadi Awang’s claim that the Chinese domination of local industry meant that DAP was supportive of the TPP, Lim said that race and religion did not factor into the support or otherwise for the free trade agreement.

The DAP secretary-general claimed that his party was firmly against Malaysia signing the deal as it would purportedly cause nearly 40 per cent of SMEs to close down.

“This is a fact that the federal government has yet to address,” the Penang lawmaker said in a statement released today.

“Malaysians would expect such misrepresentation of DAP’s position or a racially-tinged statement from Umno but for a PAS leader to indulge in such baseless untruths shows that PAS is now not only co-operating with Umno but also adopting Umno’s dirty politics of slander against the DAP,” Lim said.

He pointed out that the TPP is initiated by Umno not by DAP and that the the agreement is led by the United States to restrict China’s influence geo-politically.

“Using Hadi’s logic, then Umno must be Chinese too for initiating the passing of the TPP in Parliament. Why then does Hadi continue to work with Umno and even advice the BN federal government?”

He then told Hadi that he should not be against TPP if he is “so anti-Chinese”, but to support the TPP to oppose China.

Lim also asked why Hadi chose not to criticise Umno for spearheading Malaysia’s involvement in the TPP if PAS were sincere in its opposition to the deal, adding that PAS now appeared to be on congenial terms with the lynchpin of the Barisan Nasional (BN) coalition.

Last week, Hadi accused DAP of agreeing to the TPP because the Chinese control trade in Malaysia.

This is despite the DAP announcing that it would vote against the TPP if Putrajaya could not clarify the impact of the agreement.

Parliament will convene a special session this week to discuss Malaysia’s participation in the TPP.

A rally was held during the weekend to oppose Malaysia’s signing of the free trade deal, although Pakatan Harapan parties such as DAP and PKR were poorly represented.

Hadi ticked off over his narrow views of TPPA





KUALA LUMPUR: PAS president Datuk Seri Abdul Hadi Awang (pic right >) has been taken to task for linking support of the Trans-Pacific Partnership Agreement (TPPA) to the Chinese community.

MCA Youth chief Chong Sin Woon chided Hadi for having narrow views of the agreement.

“How can it be of Chinese interest when the agreement includes other nations such as Japan, Canada and the United States?” he asked after opening SMK Cheng Perdana’s Lim Kok Yeong multi-purpose hall here yesterday.

He urged Hadi to “wake-up” to the realities of globalisation where the agreement would benefit the nation as a whole.

“Please don’t use racial lenses to look at everything.

“It is a shame that there are still leaders talking like this even as we are about to become a high income developed nation in four years’ time,” he said.

MCA religious harmony bureau chairman Datuk Seri Ti Lian Ker also said that the TPPA was about trade and should not be turned into a racial issue. It was ridiculous to put a racial tag on trade and commerce, he said, adding that Hadi’s remarks were an attempt to use race or religion for political gain.

In a statement, Ti said he was glad that many Malaysians had woken up to these racial tauntings and the “underhand” move of using the Chinese community as a punching bag or the bogeyman.

He said liberated Malaysians and the educated new generations had moved beyond colour or creed.

Malaysians, irrespective of races, were collaborating in business partnerships and this was a positive trend, he added.

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Ma'sia economy structurally sound despite fall in oil prices, need to invest in people, say Eco World Liew

Star Media Group managing director and chief executive officer Datuk Seri Wong Chun Wai (right) presenting a souvenir to Liew. With them is specialist editor M. Shanmugam.

Eco World to build for first time homebuyers



Eco World chairman says banks and GLCs are in good shape

PETALING JAYA: Eco World Development Group Bhd’s chairman Tan Sri Liew Kee Sin is confident that Malaysia is structurally sound despite the unprecedented fall in oil prices.

Kicking off the first StarLIVE Business Series: Power Talks at Menara Star over the weekend, he said the country today was in a strong position to weather these circumstances.

“The banks are well capitalised while many of our government-linked companies (GLCs) are solid presently such as Khazanah Nasional Bhd. This is the good news, that the banks are not in trouble while none of the GLCs are in trouble. This is our fundamental strength and key to our economy,” Liew said.

“I am very confident that the Government will come up with a good budget next week because the Government is today listening to the people. While the ringgit is bad, the good news is that there is a solution to 1 Malaysia Development Bhd’s (1MDB) woes,” he said.

He said that the solution was being panned out on the markets now because 1MDB’s power assets and Bandar Malaysia had been sold.

“The economy will still grow by about 4%-5% this year despite the news and businesses need to take advantage of this,” he said.

He also rebutted comments by an American fund manager Peter Kohli who reportedly said that investors should stay clear of investing in Malaysia.

“I dispute him because there are a lot of people who still regard Malaysia as a jewel such as the mainland Chinese. Some are concerned that they are being involved but they are paying real money for our assets and bringing money into the country,” he said.

Speaking also on Eco World, which he founded, Liew said he decided to start out with his own property development company after he left SP Setia Bhd, which was also founded by him, pursuant to the takeover of SP Setia by Permodalan Nasional Bhd.

“It was very tempting and my wife told me, why not just relax and enjoy what we have attained. But I told myself that I will not fade away and thanks to my chief executive officers, we managed to recreate a brand once again,” he said.

He said having a solid team behind him in both family and work lives was key to him having being able come this far.

“I don’t play golf, I don’t go drinking often and my friends tell me that I am a boring person, so I decided to go back to work. If we worked together as a team, we will never go down,” he said.

He added that investing in people was the main ingredient behind creating successful brands.

“The people are the DNA of the company and over time, we have developed a DNA for ourselves as well. You need to invest in your people.

“In Eco World, we have the Eco World Learning Academy where all our staff members, irrespective of their education background, are trained,” Liew said.

“So far, in our company, we have been able to create and sustain people who are passionate and committed to their jobs,” he added.

On his family, he said instilling values in children were a priority from a young age.

“For my family, we told our kids that when it comes to food and book purchases, they can spend any amount of money they want to.

“But when it comes to branded items, they cannot buy those without my permission because they do not deserve it yet. We cannot afford to be spendthrift with such luxuries in life,” Liew said.

By Daniel Khoo The Star/Asia News Network

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Don’t blame China for global economic jitters; China contributed >25% global growth

‘There has never been a real recovery in North America and western Europe since 2008.’ Photograph: Kai Pfaffenbach/Reuters

The US stock market has just had the worst start to a year in its history. At the same time, European and Japanese stock markets have lost around 10% and 15% of their values respectively; the Chinese stock market has resumed its headlong dash downward; and the oil price has fallen to the lowest level in 12 years, reflecting (and anticipating) worldwide economic slowdown.

According to the dominant economic narrative of recent times, 2016 was the year when the world economy would recover fully from the 2008 crash. The US would lead this recovery by generating growth and jobs via fiscal conservatism and pro-business policies. Reflecting the economy’s robust growth, the US stock market reached new heights in 2015, although disrupted by the mess in the Chinese stock market over the summer. By last October, US unemployment had fallen from the post-crisis peak of 10% to 5%, bringing it back close to the pre-crisis low. In a show of confidence, last month the US Federal Reserve finally raised its interest rate for the first time in nine years.

Not far behind the US, the story goes, have been Britain and Ireland. Hit harder than the US by the financial crisis, they have, however, recovered handsomely because they kept their nerve and stuck to the right, if unpopular, policies. Spending cuts, focused on wasteful welfare spending, accelerated job creation by making it more difficult for people to live off the taxpayer. They sensibly didn’t give in to the banker-bashers and chose not to over-regulate the financial sector.

Even the continental European economies have been finally picking up, it was said, having accepted the need for fiscal discipline, labour market reform and cutting business regulations. The world – at least the rich world – was finally set for a full recovery. So what has gone wrong?

Those who put forward the narrative are now trying to blame China in advance for the coming economic woes. George Osborne has been at the forefront, warning this month of a “dangerous cocktail of new threats” in which the devaluation of the Chinese currency and the fall in oil prices (both in large part due to China’s economic slowdown) figured most prominently. If our recovery was to be blown off course, he implied, it would be because China had mismanaged its economy.

China is, of course, an important factor in the global economy. Only 2.5% of the world economy in 1978, on the eve of its economic reform, it now accounts for around 13%. However, its importance should not be exaggerated. As of 2014, the US (22.5%) the eurozone (17%) and Japan (7%) together accounted for nearly half of the world economy. The rich world vastly overshadows China. Unless you are a developing economy whose export basket is mainly made up of primary commodities destined for China, you cannot blame your economic ills on its slowdown.

The truth is that there has never been a real recovery from the 2008 crisis in North America and western Europe. According to the IMF, at the end of 2015, inflation-adjusted income per head (in national currency) was lower than the pre-crisis peak in 11 out of 20 of those countries. In five (Austria, Iceland, Ireland, Switzerland and the UK), it was only just higher – by between 0.05% (Austria) and 0.3% (Ireland). Only in four countries – Germany, Canada, the US and Sweden – was per-capita income materially higher than the pre-crisis peak.

Even in Germany, the best performing of those four countries, per capita income growth rate was just 0.8% a year between its last peak (2008) and 2015. The US growth rate, at 0.4% per year, was half that. Compare that with the 1% annual growth rate that Japan notched up during its so-called “lost two decades” between 1990 and 2010.

To make things worse, much of the recovery has been driven by asset market bubbles, blown up by the injection of cash into the financial market through quantitative easing. These asset bubbles have been most dramatic in the US and UK. They were already at an unprecedented level in 2013 and 2014, but scaled new heights in 2015. The US stock market reached the highest ever level in May 2015 and, after the dip over the summer, more or less came back to that level in December. Having come down by nearly a quarter from its April 2015 peak, Britain’s stock market is currently not quite so inflated, but the UK has another bubble to reckon with, in the housing market, where prices are 7% higher than the pre-crisis peak of 2007.

Thus seen, the main causes of the current economic turmoil lie firmly in the rich nations – especially in the finance-driven US and UK. Having refused to fundamentally restructure their economies after 2008, the only way they could generate any sort of recovery was with another set of asset bubbles. Their governments and financial sectors talked up anaemic recovery as an impressive comeback, propagating the myth that huge bubbles are a measure of economic health.

Whether or not the recent market turmoil leads to a protracted slide or a violent crash, it is proof that we have wasted the past seven years propping up a bankrupt economic model. Before things get any worse, we need to replace it with one in which the financial sector is made less complex and more patient, investment in the real economy is encouraged by fiscal and technological incentives, and measures are brought in to reduce inequality so that demand can be maintained without creating more debts.

None of these will be easy to implement, but we know what the alternative is – a permanent state of low growth, instability, and depressed living standards for the vast majority.

By Ha-Joon Chang, Guardian Economics News

China Should Take Advantage of Industry 4.0 to Shift Economy: Bill Gates

Philanthropist and co-founder of Microsoft, Bill Gates attends a panel "Preparing for the Next Pandemic" at the World Economic Forum in Davos, Switzerland, on January 22, 2016. [Photo: Imagine China]

Microsoft founder Bill Gates has urged China to take advantage of the Fourth Industrial Revolution so as to face the challenge of transforming its economy.

He made the remarks on the sidelines of the ongoing World Economic Forum Annual Meeting in Davos.

"Well China's obviously got a lot of people, a lot of smart people. It's moved to not only have more people college educated, but lots of engineers, to raise the quality of those engineering skills. It's created a recognition that if people invent something that they can be rewarded for that, which is leading to all new sorts of companies. Not just the IT space, although that's the most visible, but also more and more in biology, robotics, those things, so China's going to carry its weight. "

Gates also expressed his optimism about China's economic future.

"There are a lot of great talents in China. You know, building up the educational system, you know, I think China has got a very bright future. I have a lot of confidence in China partly because they take long-term view; they look at what other countries are doing. You know China is going to contribute more and more to the world's innovation."

Figures from China's National Bureau of Statistics showed that the country's Gross Domestic Product in 2015 registered an annual growth rate of 6.9 percent, the lowest level since 1990.

Though slowing, China still contributed to more than 25 percent to global economic growth.

The Fourth Industrial Revolution, also termed as Industry 4.0, is marked by convergence of smart technology including artificial intelligence with the industrial sector.- (CRI Online)

China to Contribute More to World's Innovation: Bill Gates

With a strong ambition to promote science and research, China is going to contribute more and more to the world's innovation, Microsoft's founder Bill Gates has said.

In an interview on the sidelines of the World Economic Forum (WEF) Annual Meeting 2016, Gates said China would probably become a huge participant in the Fourth Industrial Revolution, which is already under way and bringing a fast and disruptive change for most industries.

Talking about the new revolution, Gates believed the digital revolution, something he spent most of his life working on, was a huge factor.

The Fourth Industrial Revolution refers to the ongoing transformation of our society and economy, driven by advances in artificial intelligence, robotics, autonomous vehicles, 3D printing, nanotechnology and other areas of science.

A key enabler of much of these new technologies is the Internet where Microsoft and Gates has been a leading contributor to the progress.

"An industrial revolution is coming to increase productivity very dramatically," Gates said, "It creates opportunities, and it creates challenges."

New technology changes would free some labor, so that people can do more in culture sector, according to Gates.

He said China had built some advantages in science and technology through its educational system, and the country had a strong will to promote its contribution in different sciences sectors.

"China obviously has a lot of people and a lot of smart people," Gates said, "Not only a lot of people college-educated, but also a lot of engineers with the quality of engineering skills. "

"With the recognition that people have done something that they can be rewarded for that, many experts have been leaded to have new companies, in IT sector, biology, robots and other those things."

"China is going to carry its weight," he said.

In recent years, the former internet elite has been dedicating to driving innovation in global health and development. As the Co-chair of the Bill & Melinda Gates Foundation, Gates decided to join force with China's Tsinghua University to establish the Global Health Drug Discovery Institute(GHDDI) in Beijing during his Davos visit.

"China has made incredible progress in reducing poverty and shares the foundation's commitment to harnessing advances in science and technology to address the critical health challenges affecting the world's poorest people," Gates said.

"We are excited about GHDDI's potential to drive innovation in global health research and development, and look forward to partnering with Tsinghua University on our continued work to address the world's most pressing global health challenges."

In an article released during WEF, Gates pledged his foundation would invest more in innovation in the coming years. He told Xinhua that the investment that went to China's innovation was expected to increase gradually.

Asked whether he worried about China's economic slowdown, which may hinder innovation progress, Gates said he was quite optimistic about China's economic outlook.

"I have a lot of confidence in China, partly because they take a long-term view, and partly because they look what other countries are doing," he said.

Faced with a challenge of turning the economy into new directions, Gates said China had great talent to achieve its goal.

"Most countries would envy a 6.9 percent growth, I think China has a bright future,"he said, adding "China is going to be contributing more and more to the world's innovation." - Xinhua Web Editor: Zhang Peng

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Healing through hiking mountains

The arduous Pacific Crest Trails offered the author of The Girl In The Woods the chance to take back control of her life after being raped.

The first time I heard of the Pacific Crest Trail was at the recent George Town Literary Festival, when a friend expressed interest in hiking it. Stretching across mountains running along the western coast of the United States, it is a challenging trail that should be attempted by only the hardiest of hikers.

My own experience with hiking is limited to beginner trails in national parks and forest reserves. Hiking is fun, but I know well enough of its dangers – years ago, another friend of mine had gone hiking and disappeared. The friend at the festival who wanted to hike the Pacific Crest is a man in his 30s. In Girl In The Woods, the hiker, who goes by the name “Wild Child”, is a young woman of 19 and a survivor of rape.

Wild Child grew up as Deborah “Debby” Parker, a sheltered child who lived under the wing of her protective mother and influential, high-achieving brother. On the second night of her stay at college, she was raped.

The emotional and psychological effects of the rape, compounded with the lack of empathy from her college and her family, became the catalyst for her decision to hike the entire Pacific Crest Trail.

For Wild Child, the hike was both a method of escaping a society that made her feel vulnerable and of confronting danger and, through that, regaining her sense of control and trust.

Author: Aspen Matis Publisher : William Morrow/HarperCollins, non-fictionNature and the wilderness is often portrayed as a place of peace and isolation, but any illusion that the wilderness of the Pacific Crest Trail is isolated and peaceful is proven false in Wild Child’s experiences along the trail. The Pacific Crest Trail hiking line is a male-dominated environment, peopled with strange men and women, and offers very little protection from physical or verbal violence stemming from racism, misogyny, or sheer sadism.

Following Wild Child’s journey along the trail brings us to very close intimacy with her personality, her decisions, and her pain. Although survivor accounts and articles on the way rape affects psychology exist in abundance, Girl In The Woods vividly shows how rape shatters one’s sense of safety, trust, and control over one’s body and environment; more importantly, the book allows readers to witness the challenges of regaining that lost sense of security and control.

As we follow her journey, we are also made to confront rape culture – both when it is perpetrated by the people around Wild Child and when we are tempted to criticise her lack of self-preservation. Wild Child exposes herself (at times literally) to strangers and dangers, and readers may find themselves finding fault and blaming her for “tempting rape”. We are made to confront and encouraged to unshackle from our own preconceived, perhaps subconscious, perpetuation of victim blaming and rape culture.

The topic of rape may frighten some readers away from the book, but the harsh desert beauty of the Pacific Crest Trail and Wild Child’s own personal resilience tames its violence, so the experience of reading the book is not unpleasant.

Girl In The Woods is a powerful testament of nature’s healing qualities and an intimate examination of surviving rape.

It is an elegant narrative of loss of innocence, regaining of strength, and finding love and self-acceptance.

It is not merely an account of a survivor but an adventure book, a record of a coming-of-age, and a story of personal growth as the protagonist transforms from the insecure Debby Parker to Wild Child the hiker, before finally emerging as Aspen Matis (the name that she answers to now, and the pseudonym used to pen the book), a fully fledged survivor.

The only arguable weakness of Girl In The Woods is that the description of the landscape along the Pacific Crest Trail is rather sparse.

Perhaps this was omitted because it was unnecessary to the narrative, but I would have appreciated more details on the desert, mountains and forests that were traversed.

I tend to notice the beauty of natural landscapes when I travel, and keenly felt the omission of detailed descriptions on the beautiful American rural landscape.

But this is a minor complaint in an otherwise outstanding memoir.


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