Saturday, July 30, 2011

Let's be clear, the Republicans are to blame

THE facts of the crisis over the debt ceiling aren't complicated. Republicans have, in effect, taken America hostage, threatening to undermine the economy and disrupt the essential business of government unless they get policy concessions they would never have been able to enact through legislation.

By Paul Krugman
And Democrats - who would have been justified in rejecting this extortion altogether - have, in fact, gone a long way towards meeting those Republican demands.
As I said, it's not complicated. Yet many people in the news media apparently can't bring themselves to acknowledge this simple reality. News reports portray the parties as equally intransigent; pundits fantasise about some kind of 'centrist' uprising, as if the problem were too much partisanship on both sides.
Some of us have long complained about the cult of 'balance', the insistence on portraying both parties as equally wrong and equally at fault on any issue, never mind the facts. I joked long ago that if one party declared that the earth was flat, the headlines would read 'Views differ on shape of planet'.
But would that cult still rule in a situation as stark as the one we now face, in which one party is clearly engaged in blackmail and the other is dickering over the size of the ransom? The answer, it turns out, is yes. And this is no laughing matter: The cult of balance has played an important role in bringing us to the edge of disaster. For when reporting on political disputes always implies that both sides are to blame, there is no penalty for extremism. Voters won't punish you for outrageous behaviour if all they ever hear is that both sides are at fault.
Let me give you an example of what I'm talking about. As you may know, President Barack Obama initially tried to strike a 'Grand Bargain' with Republicans over taxes and spending. To do so, he not only chose not to make an issue of GOP extortion, but also offered extraordinary concessions on Democratic priorities: an increase in the age of Medicare eligibility, sharp spending cuts and only small revenue increases. As The Times' Nate Silver pointed out, Mr Obama effectively staked out a position that was not only far to the right of the average voter's preferences, but it was if anything a bit to the right of the average Republican voter's preferences.
But Republicans rejected the deal. So what was the headline on an Associated Press analysis of that breakdown in negotiations? 'Obama, Republicans trapped by inflexible rhetoric.' A Democratic president who bends over backwards to accommodate the other side - or, if you prefer, who leans so far to the right that he's in danger of falling over - is treated as being just the same as his utterly intransigent opponents. Balance! Which brings me to those 'centrist' fantasies.
Many pundits view taking a position in the middle of the political spectrum as a virtue in itself. I don't. Wisdom doesn't necessarily reside in the middle of the road, and I want leaders who do the right thing, not the centrist thing.
But for those who insist that the centre is always the place to be, I have an important piece of information: We already have a centrist president. Indeed, Mr Bruce Bartlett, who served as a policy analyst in the Reagan administration, argues that President Obama is, in practice, a moderate conservative.
Mr Bartlett has a point. The President, as we've seen, was willing, even eager, to strike a budget deal that strongly favoured conservative priorities. His health reform was very similar to the reform Republican presidential candidate Mitt Romney installed in Massachusetts. Romneycare, in turn, closely followed the outlines of a plan originally proposed by the right-wing Heritage Foundation. And returning tax rates on high-income Americans to their level during the Roaring Nineties is hardly a socialist proposal.
True, Republicans insist that Mr Obama is a leftist seeking a government takeover of the economy, but they would, wouldn't they? The facts, should anyone choose to report them, say otherwise.
So what's with the buzz about a centrist uprising? As I see it, it's coming from people who recognise the dysfunctional nature of modern American politics, but refuse, for whatever reason, to acknowledge the one-sided role of Republican extremists in making our system dysfunctional. And it's not hard to guess at their motivation. After all, pointing out the obvious truth gets you labelled as a shrill partisan, not just from the right, but from the ranks of self-proclaimed centrists.
But making nebulous calls for centrism, like writing news reports that always place equal blame on both parties, is a big cop-out - a cop-out that only encourages more bad behaviour. The problem with American politics right now is Republican extremism, and if you're not willing to say that, you're helping make that problem worse.
The writer, a Nobel prize winner in economics, is professor of economics and international affairs at Princeton University.

A tale of two flood-hit Pakistani villages

Pakistani children pumping water on Tuesday at a camp where hundreds of people displaced by floods a year ago live in Adazai, near Peshawar. Some villagers, like those in Mor Jangi, say they have been forgotten. -- PHOTO: ASSOCIATED PRESS
MOR JANGI (Pakistan): Residents of this Pakistani village whose lives were devastated by last year's floods complain they have been largely forgotten. Sewage runs through the streets. Some people still live in tents under the searing summer sun. Residents of one get new homes while locals in another complain of being forgotten

Others had to sell their cattle and take on heavy debts to rebuild their homes.
Not far away, in Wairar Sibra village, locals are getting ready to move into new houses, complete with electricity and courtyards, thanks to the largesse of the wealthy man who owns the power plant looming over the settlement. The villagers are excited because the new homes are even better than the ones they had before the floods.
The contrasting fates of the two villages in central Punjab province are a testament to the uneven response to Pakistan's worst floods, which hit a year ago and inundated a sizeable chunk of the country.
Often, the deciding factor between success and failure in Pakistan is how much access people have to the rich and powerful, a rule that seems true even in the wake of a natural disaster.
Many of the 18 million people affected by the floods, which were triggered by heavy monsoon rain, were among the country's poorest and most vulnerable. Despite hundreds of millions of dollars spent by Islamabad and international donors, millions of people are still in dire need of help.
Mr Nazir Ahmed is still living with his family in tents set up amid the ruins of his home in Mor Jangi. The 35-year-old brick kiln worker has little hope of rebuilding his house since his daily wage of less than US$3 (S$3.60) is barely enough to feed his family and treat their frequent bouts of malaria and diarrhoea.
'I haven't been able to save money, and I don't have any land or cattle to sell,' said Mr Ahmed, as his five young daughters and two young sons gathered around him.
Many villagers were counting on receiving about US$1,160 promised by the government - the minimum needed to rebuild one room of a house.
But the government has distributed only about US$232 per family, and the cash payout programme has been plagued by allegations of corruption.
Even some international aid ended up doing more harm than good. A Czech aid group, People In Need, hired a local engineer to build a sewage system, but villagers accused him of using only a fraction of the materials needed and keeping the rest for himself.
Engineer Bashir Nadr denied the allegations. But several streets in the village are now awash with sewage.
It is a different story altogether in Wairar Sibra. Flood waters swept through the village on Aug 4 last year, destroying all 168 houses and sending the 1,250 residents fleeing to relief camps, said Mr Malik Mureed, a 35-year-old farmer. But the village is next to a power plant owned by one of the richest men in Pakistan, Mr Mian Muhammad Mansha, and several villagers work there.
Residents in many other villages across Pakistan are far less fortunate. At least eight million flood victims remain in dire need of basic health care, food, or shelter, said Islamic Relief, a Britain-based aid group.
The floods killed 2,000 people, and damaged or destroyed 1.6 million homes and thousands of acres of crops, said the international aid group Oxfam. More than 800,000 families remain without permanent shelter, and more than a million still need food assistance, it said.
Reconstruction is predicted to cost up to US$10.9 billion - almost a quarter of Pakistan's national budget.

Bush explains 9/11 reaction: 'I wanted to show calm'

LOS ANGELES: Former US president George W. Bush says his apparent lack of reaction to the first news of the Sept 11, 2001 attacks was a conscious decision to project an aura of calm in a crisis.

In a rare interview with the National Geographic Channel, Mr Bush reflects on what was going through his mind at the most dramatic moment of his presidency when he was informed that a second passenger jet had hit New York's World Trade Center.

Mr Bush was visiting a Florida classroom and the incident, which was caught on TV film, has often been used by critics to ridicule his apparently blank face.

'My first reaction was anger. Who the hell would do that to America? Then I immediately focused on the children, and the contrast between the attack and the innocence of children,' Mr Bush says in an excerpt of the interview shown to television writers on Thursday.

Mr Bush said he could see the news media at the back of the classroom getting the news on their own cellphones 'and it was like watching a silent movie'.

He said he quickly realised that a lot of people beyond the classroom would be watching for his reaction.

'So I made the decision not to jump up immediately and leave the classroom. I didn't want to rattle the kids. I wanted to project a sense of calm,' he said of his decision to remain seated and silent.

'I had been in enough crises to know that the first thing a leader has to do is to project calm,' he added.

The National Geographic Channel will broadcast the hour-long interview on Aug 28 as part of a week of programmes on the cable network called 'Remembering 9/11' that mark the 10th anniversary of the attacks.

The interview was recorded over two days in May, without any questions being submitted in advance, the channel said.

National Geographic said Mr Bush gives 'intimate details' of his thoughts and feelings in a way never seen before. Most of the interview is about the first minutes and hours of the day that Islamic militants hijacked four planes and crashed into the World Trade Center and the Pentagon.

Executive producer and director Peter Schnall said Mr Bush, who has adopted a low public profile since leaving office in January 2009, brought no notes to the interview.

'What you hear is the personal story of a man who also happened to be our president. Listening to him describe how he grappled with a sense of anger and frustration coupled with his personal mandate to lead our country through this devastating attack was incredibly powerful,' Mr Schnall said.

US television networks are planning a slew of specials to mark the 10th anniversary of the Sept 11 attacks. Those on National Geographic also include a documentary on the continuing US war on terror, and stories of ordinary people on Sept 11, 2001 called 'Where Were You?'


Blogs emerge as force to be reckoned with

BEIJING: 'After all the wind and storm, what's going on with the high-speed train?' read the prophetic message posted on Saturday evening on the Chinese microblog Sina Weibo. 'It's crawling slower than a snail. I hope nothing happens to it.'

They were a few short sentences, typed by a young girl with the online handle Smm Miao. But five days later, the torrent that followed them was still flooding this nation's Internet, and lapping at the feet of government bureaucrats, censors and the state-controlled media.
The train the girl saw, on a track outside Wenzhou in coastal Zhejiang province, was rammed from behind minutes later, killing 40 people and injuring 192. Since then, China's two major Twitter- like microblogs - called weibo here - have posted 26 million messages on the tragedy, including some that have forced embarrassed officials to reverse their actions. The messages are a potent amalgam of contempt for railway authorities, suspicion of government explanations and shoe-leather journalism by citizens and professionals alike.
The swift and comprehensive blogs on the train accident stood this week in stark contrast to the stonewalling of the Railways Ministry, already stained by a bribery scandal. And they are a humbling example for the Communist Party news outlets and state television, whose blinkered coverage of rescued babies only belatedly gave way to careful reports on the public's discontent.
While the blogs have exposed wrongdoers and broken news before, this week's performance may signal the arrival of weibo as a social force to be reckoned with, even in the face of government efforts to rein in the Internet's influence.
The government censors assigned to monitor public opinion have let most, though hardly all, of the weibo posts stream onto the Web unimpeded. But many experts say they are riding a tiger. For the very nature of weibo posts, which spread faster than censors can react, makes them beyond easy control. And their mushrooming popularity makes controlling them a delicate matter.
Saturday's disaster is a telling example - an event that resonated with a growing middle class, computer-savvy, able to afford travel by high-speed rail, and deeply sceptical of official propaganda.
There is no clearer sign of the rising influence of microblogs than their impact on government itself.
Last weekend, Wenzhou bureaucrats ordered lawyers not to accept cases from families of victims without their permission. After the microblogs exposed them, they withdrew the order and apologised.
Railway workers had quickly buried the first car of the oncoming train at the site of the accident. After an online outcry charging a cover-up, they unearthed it and took it to Wenzhou for analysis.
'I call it the microblogging revolution,' international journalism and communications professor Zhan Jiang of Beijing Foreign Studies University said on Thursday. 'In the last year, microbloggers, especially Sina and Tencent, have played more and more a major role in coverage, especially breaking news.'
The few newspapers and magazines here that consistently push back at censors with investigative journalism are not just printing the results of their digging into the train wreck but posting them on weibo for millions to see. So were hundreds of more traditional state-controlled news outlets. Even People's Daily maintains a microblog.
But the field is dominated by two players. Sina Holdings' Sina Weibo counts 140 million users, generally better-educated and more interested in current events. Tencent's weibo hosts 200 million generally younger users who are more interested in socialising.
Unlike Western microbloggers, bloggers here can comment on others' posts, turning a message into a conversation. Users also can include photographs to telling effect: On Thursday, fact-checking bloggers posted photos of Premier Wen Jiabao's recent official activities to counter his assertion that illness had kept him from visiting the disaster site earlier.
While posts can be deleted, there are always screenshots to preserve them, such as this one by Chinese actor Ge You: 'If a higher-level leader died,' he wrote, 'there would be countless wreaths; however, when many ordinary people died, there was only endless harmony' - a euphemism for censorship.
'If a higher-level leader died, there would be nation-wide mourning; however, when many ordinary people died, there was not a single word of apology.
'If a higher-level leader died, there would be high-end funerals; however, when many ordinary people died, there were only cold numbers.'

Glam slam for Pakistan's new minister

Ms Khar waving upon her arrival on Tuesday at Air Force Station in New Delhi, where she had flown to meet her Indian counterpart to hold peace talks - the first foreign minister-level discussions between the neighbours for a year. -- PHOTO: AGENCE FRANCE-PRESSE
NEW DELHI: If deep political divisions could be healed with the wave of a well-manicured hand and a winning smile tastefully sporting the right lipstick, Ms Hina Rabbani Khar might find her new job as Pakistan's foreign minister easy indeed.

In fact, heads turned and jaws dropped the minute the 34-year-old beauty stepped off a plane here earlier this week for her first talks with her 79-year-old male Indian counterpart S.M. Krishna.

A headline over her photo in The Times of India, the country's biggest-selling English-language daily, read 'Pak Puts On Its Best Face'. The mass circulation Hindi newspaper Navbharat Times said India was 'sweating over model-like minister'.

Ms Khar certainly seemed to have left an impression on one of the world's most tense bilateral relations the week after she was promoted to take over from her predecessor Shah Mehmood Qureshi as Pakistan's first female foreign minister, and also its youngest.

Back home, the young woman has drawn inevitable comparisons to Ms Benazir Bhutto, the charismatic female prime minister who was assassinated while trying to regain power in 2007.

Like Ms Bhutto, she comes from one of Pakistan's most powerful political and landowning families. Her enormously wealthy clan has extensive farms in Punjab, the country's richest and most populous province.

Trademark headscarf notwithstanding, the married mother of two sons and a daughter, who herself owns the upscale Polo Lounge restaurant in Lahore, caused a stir after being photographed in tight jeans.

It was Ms Khar's father, prominent Pakistani politician Ghulam Noor Rabbani Khar, who persuaded her to give up her hotel job - she has a degree in hotel management from the University of Massachusetts - to enter politics.

She joined the Pakistan People's Party of Ms Bhutto in 2008 and was elected an MP, and rose to become junior minister of finance before being appointed junior foreign minister five months ago.

But questions have been raised about her competence for the top foreign affairs job, not to mention her commitment to it.

Political analyst Hasan Askari said: 'Pakistan faces a very difficult international environment, and at a time a foreign minister has been appointed who is a political lightweight with no experience in this field.'

The Economic Times reported that the former Pakistani law minister Iqbal Haider was even more disapproving.

'One is at a loss to understand the justification or merit in this appointment,' he says. 'This is far too important a portfolio, and one that requires much expertise in geopolitics and global affairs, to be put in the hands of a novice.'

After her first meeting with Mr Krishna, however, the beauty seemed to show she had brains too. She tapped into her own youth to describe relations between her country and India as in the midst of a 'mindset change'.

Ms Khar spoke of a new generation that saw the two countries' relationship differently from past generations, noting: 'It is our desire to make the dialogue process uninterrupted and uninterruptible.'

In London's The Independent newspaper, journalist John Elliott seemed to have been suitably impressed by Ms Khar. In his Riding the Elephant blog, he wrote that she 'was right when she said that people on both sides of the border have had enough of the confrontation and, as individuals, would like to move on'.

Yet people still seemed more taken with her fashion sense than her political views. The Mail Today, for instance, focused on her choice of outfits instead of her choice of words.

'The 34-year-old minister scored full marks on the fashion front when she was spotted at the Delhi airport in a monotone outfit of blue - the colour of the season,' it said.

'Tasteful accessories - Roberto Cavalli sunglasses, oversized Hermes Birkin bag and classic pearl jewellery - added a hint of glamour to her look.'

As the Mumbai Mirror tabloid put it, in a tongue-in-cheek reference to the history of wars between the countries and attacks by Pakistani militant groups on Indian soil as well as its own Bollywood beauties: 'Pak bomb lands in India'.

Indians also took to social media such as Twitter to add their two cents to the debate over Pakistan's new envoy. Many took exception to the intense scrutiny of her appearance and fashion accessories, particularly a luxury Hermes handbag, saying that male visitors to India were never subjected to similar analysis.

But one right-wing blogger, Pragmatic-d, replied: 'You don't carry a bag that is a serious fraction of your country's fiscal deficit and not expect it to be commented upon.'

Journalist and author Seema Goswami even saw a link between the monsoonal downpour that struck the Indian capital on Wednesday morning and the generally fawning coverage of the freshest face in international diplomacy.

'Even the Delhi skies are drooling,' she wrote.

With additional information from Agence France-Presse.

Why did Wen say he was ill?

BEIJING: The fallout from China's train crash has taken a surprising turn towards elite political struggles, with public attention now focused on Premier Wen Jiabao's remarks on Thursday that he visited the tragic scene late because he had been hospitalised for 11 days.

Questions raised after reports show he was at various public events
By Peh Shing Huei, China Bureau Chief

'I was in my sickbed for the past 11 days. The doctor only reluctantly allowed me to travel today. This is why I'm here only five days after the accident.'

Eagle-eyed netizens swiftly dug out state media reports of his numerous official activities during those days, leading experts to believe that there was strong disagreement among the top leaders on how to deal with the collision.

Mr Wen had said at the crash site near Wenzhou city: 'I was in my sickbed for the past 11 days. The doctor only reluctantly allowed me to travel today. This is why I'm here only five days after the accident.' But state media reports suggest that the 69-year-old Premier, who did not specify his illness, has had a packed work schedule during that period.

Last Monday, he hosted a welcome ceremony for visiting Iraqi Prime Minister Nouri al-Maliki at the Great Hall of the People in Beijing.

For the next two days, he presided over a meeting on climate change and chaired a State Council meeting on land management. Last Thursday, he met Cameroon President Paul Biya in the capital.

Three days later, on Sunday, a day after China's first high-speed train crash which killed 40 people and injured 192, he received a delegation from the Japanese Association for the Promotion of International Trade. Xinhua state news agency carried a photograph of a smiling Mr Wen greeting the Japanese delegation.

The uncharacteristic faux pas has stirred much speculation on why Mr Wen, who is known to choose his words carefully, gave such a flimsy explanation.

In the first place, China's top leaders very rarely discuss illness in public, particularly their own health.

This has led some observers to term Mr Wen's sickness a 'political illness' - using poor health as an excuse and tactic for political aims, a favoured move in China, particularly during the Maoist years.

Hong Kong-based analyst Willy Lam believes that it is indicative of trouble within the elite leadership of the Chinese Communist Party (CCP) and that Mr Wen wanted to use it to express his unhappiness.

'There is likely to be disagreement within the Politburo Standing Committee on how to deal with this disaster,' he said, referring to the party's top decision-making body.'

He added that although the Railways Ministry comes under Mr Wen's State Council, or Cabinet, it has functioned much like an empire unto itself for years. China's railroads were widely known to be the private fiefdom of former minister Liu Zhijun, who was brought down in February on corruption charges.

'Wen has no control over the ministry. It was really embarrassing for him because he had to take responsibility and yet couldn't do anything,' said Dr Lam.

The authorities' handling of the tragedy's aftermath also gave rise to talk that top leaders may not be united in their responses.

While the Propaganda Department issued censorship rules to local media outlets to stop investigating the cause of the crash, these were brazenly ignored, a rare rebellion here.

Even the People's Daily, the ultra-conservative mouthpiece of the CCP, continued its scathing attacks on the crash, suggesting that it has the backing of some top leaders. State broadcaster China Central Television has done likewise.

City University of Hong Kong analyst Joseph Cheng said it is obvious that Mr Wen was under a lot of pressure to go to the crash site and salvage some confidence from both domestic and international audiences.

'With the pressure, perhaps he was careless in his remarks and not being 100 per cent honest,' he said.

Friday, July 29, 2011

Dealing with differences

The recent violence in Norway has put the spotlight on how societies strive to balance respect for cultural differences with a need for social unity and a national identity.

By Li Xueying, Political Correspondent

THE term multiculturalism has been the subject of much soul-searching in Europe of late. To Norwegian gunman Anders Behring Breivik, multiculturalism is like a drug.
'Both destroy the heart and fabric of a people,' he wrote on page 791 of his 1,518-page vitriol-filled manifesto.
Eleven pages down, he described how 'patriotic Europeans' will revolt against the 'Nazis of our time' who are 'leading us to the cultural slaughterhouse by selling us into Muslim slavery'.
It will be a 'Christian war to defend Europe against the threat of Muslim domination', he thundered.
In the name of this war, the blond 32-year-old allegedly killed 76 people last Friday, first with a car bomb in Oslo, and then with a rifle and a handgun at a political youth camp.
In the tragedy's wake, there have been discussions about what could have motivated the born-and-bred Norwegian to carry out such a cold-blooded massacre, and its significance.
One cannot over-infer from the maniacal ravings of a right-wing extremist who may be, as his lawyer claims, insane.
As security expert Norman Vasu of the S. Rajaratnam School of International Studies notes: 'It is very difficult and dangerous to extrapolate from this one event, horrific as it is, to come to a conclusion about the far-right sweeping Europe or a backlash against immigration.'
But Breivik's views, while on the fringe, are not especially alien.
Right-wing writer Bruce Bawer wrote in an opinion piece for the Wall Street Journal that while Breivik's 'solution' was evil, it was to address 'a legitimate concern about genuine problems'.
Multiculturalism advocates that multiple ethnic and religious groups can co-exist harmoniously within a nation. All groups are to be treated equally by the state, with no one culture predominating.
This is rejected by Breivik and fellow right-wingers, who do not think Muslim values are compatible with so-called native Western European values.
Some say such views have been given mainstream currency by leaders of Britain, France and Germany, who this year said multiculturalism had failed.
In February, British Prime Minister David Cameron blamed radicalisation on 'state multiculturalism' which encourages people of different cultures to live separate lives. German Chancellor Angela Merkel said the idea of people from different backgrounds living happily 'side by side' did not work, and placed the onus on immigrants to do more to integrate into German society.
Every heterogeneous society practises multiculturalism differently. Each negotiates its own way between respecting ethnic and religious diversity, and fostering social cohesion and a common identity.
Norway was ethnically homogeneous until the 1970s, when more immigrants started entering the country. Today, they comprise about 8 per cent of the population of five million. About a third are refugees from countries such as Iraq, Somalia and Bosnia and Herzegovina.
The Scandinavian country upholds the ideals of liberty and equality. It practises what the Organisation for Economic Cooperation and Development has termed 'an optional inclusion policy'.
Immigrants decide the degree to which they are to be assimilated into Norwegian society, even as they are accorded the same rights - including generous welfare benefits - as native citizens. Some critics say such a policy undermines social cohesion and leads to ethnic segregation.
Singapore has a different model. For much of its existence, it has been a multiracial, immigrant society. After two race riots in the 1960s, the Government has made it a national priority to maintain social stability.
It has no qualms about intervening when tension arises between those of different races and religions.
Still, new immigrant flows and religious trends strain its social fabric. How does Singapore's approach need to evolve?
Two experts on multiculturalism, Dr Lai Ah Eng and Dr Mathew Mathews, share their views.

Thursday, July 28, 2011

Indians winning top jobs with global giants

They form 2nd biggest group of CEOs after Americans, study of S&P 500 firms shows

By Ravi Velloor, South Asia Bureau Chief

NEW DELHI: On Wednesday night at upscale Central Park condominium in Gurgaon, a fast developing city on Delhi's outskirts, several cousins gathered to celebrate the elevation of one of their own to the apex of Deutsche Bank, Germany's largest lender.

One heads the regional operation of Akzo Nobel, the paint company formerly known as ICI. Another works for the energy giant Cairn.

To them, Mr Anshu Jain's appointment as co-chief executive of Deutsche marked the end of weeks of tension. Globally, the media had speculated that the 48-year-old's Indian roots and lack of familiarity with the German language would prevent him from getting the top job, despite Mr Jain's division being the bank's principal moneymaker - earning no less than three-quarters of Deutsche's profits.

'It is time for all of us to exhale and celebrate,' said cousin Manavendra Jain. 'All of us had been holding our collective breath all these weeks.'

The man at the centre of the excitement could not have been more unruffled, however.

On the day that his appointment was announced, Mr Anshu Jain was in a marquee box at Lord's - cricket's most hallowed ground - in the city of London.

Before him, disappointment was unfolding as India slipped to defeat against England in a key Test match. Batting sensation Virender Sehwag, a friend of his, was not playing because of injury. Mr Jain, however, had the satisfaction of seeing another close friend, Rahul Dravid, score a century for India.

Mr Jain's rise is the latest example in a string of Indians rising to head some of the world's biggest companies.

In a study of S&P 500 firms, the search firm Egon Zehnder found that Indians featured as the second largest group of CEOs, after Americans. They include Mr Vikram Pandit, who rescued Citigroup after the global meltdown, and Ms Indra Nooyi, boss of PepsiCo, who is charting new directions for the food and beverage company. Closer to home, there is Mr Piyush Gupta, head of DBS Group.

By some estimates, Indians can be spotted in leadership roles at a fifth of the companies on the Fortune 500 list.

What explains the phenomenon? Many share similarities - solid middle class backgrounds and values, and parents who stressed education. As individuals, they are competitive and self-aware.

'Indian managers are extremely comfortable with ambiguity,' said Mr Pradeep Pant, Singapore-based Asia-Pacific president of Kraft Foods. 'They coped with poor infrastructure and ever-changing rules in their formative years. Diversity was the norm. They are comfortable with the idea of scale and they all show high mobility and adaptability.'

Mr Pant's early background is similar to Mr Jain's: both are alumni of Delhi Public School and Shri Ram College of Commerce at Delhi University and come from middle-class homes.

Mr Jain is known to be strongly rooted in his home culture: a strict vegetarian and family man who invariably keeps in touch with relatives. His father is retired from the Indian Audits and Accounts Service.

In addition to government and the military, India's vast railways system was another breeding ground for talent. Senior railway executives moved around the country on postings, taking their children with them or sending them to boarding schools. Those who moved with their families picked up new language skills and learnt to handle the complexities of the nation. The boarding school boys learnt to be independent and self-sufficient.

One evening in Singapore recently, Mr Venky Krishnakumar, former chief operating officer of Citi's Asia-Pacific operations and now a board member with ST Engineering and MediaCorp, sat down with Mr Harish Manwani, chief operating officer of consumer goods giant Unilever, to count railway kids like themselves who had gone on to build successful careers with multinational companies.

In no time, they had run out of fingers on which to count. The list included names like Mr Victor Menezes, former vice-chairman of Citigroup, and his brother Ivan, who is president and chief executive of Diageo North America Inc.

'I guess it was a combination of being able to get into good schools and to think through all the problems and get things done,' muses Mr Krishnakumar, who spent 31 years at Citi. 'Our lives were full of back-up plans and we learnt never to take anything at face value.'

The initial MNC hires of the early 1970s and 1980s say they faced a measure of resistance at meetings and in corporate boardrooms. Some took time to adjust to the sight of an Asian striding in to discuss big deals. Traces of it remain, as seen in the speculation surrounding Mr Jain and his chances of getting the top slot at Deutsche, an institution steeped in its Germanic culture.

'Instinctively, the guys we were meeting would turn to my American subordinate,' said a person who retired from a senior position at a top accountancy firm. 'Sometimes, I'd handle such situations by turning to my guy and saying, 'Hey, Bill... get me a cup of coffee.' But that was an earlier era. Now, and in the IT field, particularly, people just as instinctively turn first to the Indian in the room.'

People familiar with the culture of multinationals say Citibank was one of the earliest to spot the merits of South Asians, particularly, Indian managers. Among its best-known hires are Mr Menezes and Mr Shaukat Aziz of Pakistan, who later became that nation's finance minister and prime minister.

From the late 1960s, Citi recruiters regularly showed up at India's top business schools and hired the best of the batches emerging with degrees.

'I remember a conference call with New York many years ago where the India head was proudly counting off the bank's performance numbers,' said a Citi veteran. 'He was interrupted by the man at the other end, who impatiently said, 'All that's fine, now tell me how many MBAs did you hire for us this year'.'

Different tools to manage the economy

Although they are both large economies, the United States puts a lot of emphasis on interest rates while China targets the exchange rate in managing the economy and reining in inflation. What is the difference and why?

By Lim Chin

ECONOMIC growth and controlling inflation are two of the most important targets of monetary policy. The first aims to create jobs and the latter to control prices.

There are different ways to achieve these goals. The US uses the interest rate while China focuses on its exchange rate.

A country may aim to target an interest rate for its currency. It cannot do so directly, but only indirectly, by buying or selling funds in the market. For example, the Federal Reserve - the US central bank - regularly buys or sells short-term government bonds on the open market. This injects or withdraws money from circulation, affecting the short-term interest rate and, thereby, the other rates.

Interest rate targeting is based on the idea that the private sector, and not the government, is best at allocating funds for spending.

In a recession, the Fed aims for a lower rate. This makes it cheaper for private sector companies to raise or borrow money for their expenditure. This raises aggregate demand. But in times of inflation, the central bank works towards a higher interest rate to cool down the demand.

There are, however, circumstances where interest rate targeting may not work. For instance, in the current zero-rate environment, the Fed cannot push the interest rate down any further.

But in normal times, interest rate targeting is effective in curbing inflation or unemployment.

If inflation and recession occur at the same time, as they did in the 1970s, the Fed has to make a judgment call as to which is more important to tackle.

The ultimate aims of China's efforts - increasing growth and reining in inflation - are not that dissimilar to those of the US.

But the institutions that can support its market are still underdeveloped in China and its average living standard is still a fraction of that of advanced economies.

To catch up, its priority is fast growth. So it sees using its exchange rate to drive up its manufacturing exports as the best strategy for now, even though this may lead to unbalanced growth.

Such a strategy has many advantages for an emerging economy. First, it feeds on the large global consumption market rather than the smaller domestic market. Secondly, it attracts foreign investment and technology, and the global market network of multinational corporations.

Competing in global markets also subjects companies to stringent market discipline, thus improving domestic production efficiency.

Over the past few decades, this strategy has taken Japan, South Korea, Taiwan, Hong Kong and Singapore from poverty to First World standards of living.

The strategy, together with other state-directed investment policies, has also produced spectacular results for China. It is now the second-largest economy in the world. It manufactures a large array of goods at low prices. The strategy has also lifted the national income of its trading partners that produce commodities and resources, and it has amassed nearly US$3 trillion (S$3.6 trillion) of foreign reserves that can help its own domestic development and be lent to debt-ridden advanced economies.

But these achievements come with several problems: unbalanced growth between the manufacturing and service sectors, income inequality between the coastal urban and rural areas and, on the global stage, huge trade imbalances between China and the US. These are acute problems that raise domestic and international political tension, and have been acknowledged as urgent challenges to be tackled in China's latest five-year plan.

Another serious consequence of the strategy is inflation. Keeping the exchange rate low requires the constant purchase of foreign exchange using newly created money, leading to loss of control of its money supply and fuelling housing bubbles and inflation, problems that further increase social tension.

Several measures have been put in place to soak up the money supply. These include foreign capital control, purchase of foreign assets, raising the amount that commercial banks must hold in reserve, and sales of government bonds.

But such policies are costly and only partially effective in taming inflation and asset bubbles. China may have to allow its exchange rate to move upwards sooner rather than later to deal with inflation.

In the long term, when China approaches advanced economy status and has developed market-supporting institutions, including finance markets, it will not need to pursue the unbalanced growth path it is on now. Instead, it is likely to engage in interest rate targeting and allow its currency to float as the advanced economies of the US and Japan do now.

The writer is a professor at the NUS Business School.

Have a burning question on an economic issue? Wonder how economics might help explain an item in the news? We welcome your questions. E-mail Questions are answered by a panel of National University of Singapore economists.

Wednesday, July 27, 2011

'Why my father hated India'

The reversal in the fortunes of the two countries - India's sudden prosperity and cultural power, seen next to the calamity of Iqbal's unrealised utopia - is what explains the bitterness of my father's tweet just days before he died. It captures the rage of being forced to reject a culture of which you feel effortlessly a part - a culture which Pakistanis, via Bollywood, experience daily in their homes.

By Aatish Taseer

TEN days before he was assassinated in January, my father, Salman Taseer, sent out a tweet about an Indian rocket that had come down over the Bay of Bengal: 'Why does India make fools of themselves messing in space technology? Stick 2 bollywood my advice.'

My father was the governor of Punjab, Pakistan's largest province, and his tweet, with its taunt at India's misfortune, would have delighted his many thousands of followers.

It fed straight into Pakistan's unhealthy obsession with India, the country from which it was carved in 1947.

Though my father's attitude went down well in Pakistan, it had caused considerable tension between us. I am half-Indian, raised in Delhi by my Indian mother: India is a country that I consider my own. When my father was killed by one of his own bodyguards for defending a Christian woman accused of blasphemy, we had not spoken for three years.

To understand the Pakistani obsession with India, to get a sense of its special edge - its hysteria - it is necessary to understand the rejection of India, its culture and past, that lies at the heart of the idea of Pakistan.

This is not merely an academic question. Pakistan's animus towards India is the cause of both its unwillingness to fight Islamic extremism and its active complicity in undermining the aims of its ostensible ally, the United States.

The idea of Pakistan was first seriously formulated by neither a cleric nor a politician but by a poet. In 1930, Muhammad Iqbal, addressing the All-India Muslim League, made the case for a state in which India's Muslims would realise their 'political and ethical essence'.

Though he was always vague about what the new state would be, he was quite clear about what it would not be: the old pluralistic society of India, with its composite culture.

Iqbal's vision took concrete shape in August 1947.

Despite the partition of British India, it had seemed at first that there would be no transfer of populations. But violence erupted, and it quickly became clear that in the new homeland for India's Muslims, there would be no place for its non-Muslim communities.

Pakistan and India came into being at the cost of a million lives and the largest migration in history.

This shared experience of carnage and loss is the foundation of the modern relationship between the two countries. In human terms, it meant that each of my parents, my father in Pakistan and my mother in India, grew up around symmetrically violent stories of uprooting and homelessness.

But in Pakistan, the partition had another, deeper meaning. It raised big questions, in cultural and civilisational terms, about what its separation from India would mean.

In the absence of a true national identity, Pakistan defined itself by its opposition to India. It turned its back on all that had been common between Muslims and non-Muslims in the era before partition.

Everything came under suspicion, from dress to customs to festivals, marriage rituals and literature. The new country set itself the task of erasing its association with the subcontinent, an association that many came to view as a contamination.

Had this assertion of national identity meant the casting out of something alien or foreign in favour of an organic or home-grown identity, it might have had an empowering effect. What made it self-wounding, even nihilistic, was that Pakistan, by asserting a new Arabised Islamic identity, rejected its own local and regional culture. In trying to turn its back on its shared past with India, Pakistan turned its back on itself.

But there was one problem: India was just across the border, and it was still its composite, pluralistic self, a place where nearly as many Muslims lived as in Pakistan. It was a daily reminder of the past that Pakistan had tried to erase.

Pakistan's existential confusion made itself apparent in the political turmoil of the decades after partition. The state failed to perform a single legal transfer of power; coups were commonplace.

And yet, in 1980, my father would still have felt that the partition had not been a mistake, for one critical reason: India, for all its democracy and pluralism, was an economic disaster.

Pakistan had better roads, better cars; Pakistani businesses were thriving; its citizens could take foreign currency abroad. Compared with starving, socialist India, they were on much surer ground. So what if India had democracy? It had brought nothing but drought and famine.

But in the early 1990s, a reversal began to occur in the fortunes of the two countries.

The advantage that Pakistan had seemed to enjoy in the years after independence evaporated, as it became clear that the quest to rid itself of its Indian identity had come at a price: The emergence of a new and dangerous brand of Islam.

As India rose, thanks to economic liberalisation, Pakistan withered. The country that had begun as a poet's utopia was reduced to ruin and insolvency.

The primary agent of this decline has been the Pakistani army. The beneficiary of vast amounts of American assistance and money - US$11 billion (S$13.3 billion) since Sept 11 - the military has diverted a significant amount of these resources to arming itself against India.

In Afghanistan, it has sought neither security nor stability but rather a backyard, which - once the Americans leave - might provide Pakistan with 'strategic depth' against India.

To realise these objectives, the Pakistani army has led the US in a dance, in which it had to be seen to be fighting the war on terror, but never so much as to actually win it, for its extension meant the continuing flow of American money.

All this time the army kept alive a double game, in which some terror was fought and some - such as Lashkar-e- Taiba's 2008 attack on Mumbai - actively supported.

The army's duplicity was exposed decisively this May, with the killing of Osama bin Laden in the garrison town of Abbottabad.

It was only the last and most incriminating charge against an institution whose activities over the years have included the creation of the Taleban, the financing of international terrorism and the running of a lucrative trade in nuclear secrets.

This army, whose might has always been justified by the imaginary threat from India, has been more harmful to Pakistan than to anybody else.

It has consumed annually a quarter of the country's wealth, undermined one civilian government after another and enriched itself through a range of economic interests, from bakeries and shopping malls to huge property holdings.

The reversal in the fortunes of the two countries - India's sudden prosperity and cultural power, seen next to the calamity of Iqbal's unrealised utopia - is what explains the bitterness of my father's tweet just days before he died.

It captures the rage of being forced to reject a culture of which you feel effortlessly a part - a culture which Pakistanis, via Bollywood, experience daily in their homes.

This rage is what makes it impossible to reduce Pakistan's obsession with India to matters of security or a land dispute in Kashmir. It can heal only when the wounds of 1947 are healed.

And it should provoke no triumphalism in India, for behind the bluster and the bravado, there is arid pain and sadness.

The writer is the author of Noon and Stranger To History: A Son's Journey Through Islamic Lands.

This article first appeared in the Wall Street Journal.


Mr Lee warns of two-party system dangers

FORMER prime minister Lee Kuan Yew has warned of the dangers of Singapore moving towards a two-party system and electing weak and ineffective governments.

Singapore will 'spiral downwards' if govt is weak, says former PM
By Elgin Toh

The progress made by the country since independence is not cast in stone and would 'spiral downwards' with poor governance, he argued in a recent interview with China Central Television (CCTV).

In an implicit reference to arguments made during the May General Election, he noted that many Singaporeans now desire a 'First World Parliament' and a two-party system.

'Their argument is simple. A First World country must have a First World Parliament. A First World Parliament must have a First World opposition. Then you can change dice. I think if ever we go down that road, I'll be very sorry for Singapore,' he said.

Campaigning on the platform of a 'First World Parliament', the Workers' Party won an unprecedented six seats at the May7 polls. The ruling People's Action Party's vote share was also cut to 60.1 per cent.

Mr Lee's interview with CCTV took place a month ago and aired on July 6, and was done for its English talk show Dialogue in conjunction with the 90th anniversary of the Chinese Communist Party (CCP) on July 1. A full transcript was obtained by The Straits Times yesterday.

Mr Lee took questions from host Yang Rui on a range of issues, and compared ruling parties in Singapore and China.

Asked about the legacy he leaves behind for the PAP, having stepped down from the Cabinet, he said:

'I took this country from a very low base in the Third World and in 20 to 40 years gradually transformed it into a First World country, and now it's gone on to a different leadership and new problems crop up because people believe that what has been achieved is always secure. I don't believe that is so.

'I believe once you have weak, ineffective government, the whole progress you have made will spiral downwards. But the majority of people believe it is secure for them, so now they have ideas about the West, two-party system.'

On Western criticisms of the systems of government in Singapore and China, Mr Lee said they sprung out of 'preconceived ideas' the West had about multi-party democracy. The US and Europe believe that 'out of contention you get progress', so parties take turns to rule, depending on who temporarily had the upper hand in the clash of ideas, he said.

'If I were the Chinese I would ignore (their criticisms) and carry on with what I have been doing and make progress, maintain peace and stability and discipline and improve the lives of my people,' he said.

That was his own approach to Singapore-bashing, he added: 'I just let the critics say what they like. I do what I know I have to do and I have every day proved to them their criticism does not carry weight, that I am still here, the system is still working and the people are thriving. That's the answer to them.'

Mr Lee also saw other similarities between the PAP and the CCP. They have comparable cultural backgrounds and both countries work on the basis of pragmatism, not dogmatism, he said.

'I am not interested in Western theories as such. I am interested in that they have these theories and I like to read about them, but it doesn't mean that I accept the theories as gospel truth. So, my approach is a pragmatic approach. Does it work? Does it not work? If it works, then do it. If it doesn't work, change. I believe Deng Xiaoping had the same approach.'

Mr Lee said China may be interested in the way the Singapore Government kept the city clean and built enough housing for all its citizens. But Singapore differed in its size, he noted. It is much smaller, and more vulnerable to outside forces.

Sunday, July 24, 2011

The rise of far-right terrorism

London - Norway's bomb and gun rampage by a Christian fundamentalist with suspected ties to far-right militants confronts Europe with the possibility that a new paramilitary threat is emerging.

One analyst called it possibly Europe's 'Oklahoma City' moment, a reference to American right-wing militant Timothy McVeigh, who detonated a truck bomb at a federal building in Oklahoma City in 1995, killing 168 people.

Norwegian television TV2 reported yesterday that Anders Behring Breivik, the Norwegian man detained after the attacks, had links to right-wing extremism.

'If true, this would be pretty significant - such a far-right attack in Europe, and certainly Scandinavia, would be unprecedented,' said Mr Hagai Segal, a security specialist at New York University's London campus.

Police forces in many Western European countries were already worried about rising far-right sentiment, fuelled by a toxic mix of anti-Muslim and anti-immigrant bigotry and increasing economic hardship.

'The next key question is whether he was acting alone, or whether he is part of a group,' said Mr Segal.

A report by European police agency Europol on security last year said that there was no right-wing terrorism on the continent in that period. But it added the far right was becoming very professional at producing online propaganda of an anti-Semitic and xenophobic nature and was increasingly active in online social networking.

If the unrest in the Arab world, especially in North Africa, leads to a major influx of immigrants into Europe, 'right-wing extremism and terrorism might gain a new lease on life', the Europol report added.

In an unclassified national security outlook for this year published by the Norway Police Security Service (PST), the service said it saw a picture of 'increased uncertainty'.

'Norwegian far-right extremists are in contact with Swedish far-right extremists, as well as with other far-right extremist groups in Europe. Contact also takes place between Norwegian and Russian far-right extremists,' it said.

Mr Michael Whine, at the Community Security Trust, an agency of the British Jewish community, said the willingness to employ extreme violence in defence of European 'values' is apparent in the ideology of several groups, which claim supporters in Croatia, the Netherlands, Norway, Poland, Serbia, Switzerland, Slovenia and Sweden.

Said Mr Segal: 'The tactics and actuality of these attacks would be quite striking if carried out by a domestic far-right actor - trying to kill Norway's Prime Minister is one thing and not surprising from any extremist elements, but killing average citizens in this manner is very, very unusual indeed for far-right supremacists, and certainly for ones in Europe.'


Friday, July 22, 2011

Young who fled big cities trickling back

GUANGZHOU: Ms Peng Xiao, 33, moved back to her hometown of Chongqing in 2004 because of high living costs in the southern metropolis of Guangzhou. Like tens of thousands of young people at that time, she was also drawn to the prospect of a slower pace of life, and probably a happier one, in the less developed parts of China

A report published in March by consulting firm Adfaith said that 76 per cent of workers in Beijing, Shanghai, Guangzhou and Shenzhen are thinking of leaving the first-tier cities, reported Global Times.

And more than 80 per cent of them said that they would move back to smaller cities once they have the opportunity to do so.

But observers have noticed an interesting phenomenon recently. Young workers are returning to the big cities they once fled from.

Some of those who had escaped to the second- and third-tier cities are going back to the big cities after having difficulties adjusting to life back home, reported the Chinese media.

Ms Li Han, now back in Beijing seeking employment, is one of them. Just last year, the Henan native worked at an advertising company in the capital before being forced to return to her hometown of Zhengzhou.

'The landlord wanted to raise the rent by 500 yuan (S$95) and it was impossible to negotiate. I suddenly felt like a homeless person,' she told the Beijing Evening News.

With help from a friend, Ms Li soon found a job at a government- backed institution in Zhengzhou. But she soon found out that it takes more than hard work to make a good employee.

The newcomers were not entitled to bonus payments, a rule that apparently did not apply to another new girl at the institution, as her father was the head of a local bureau, Ms Li said.

'It might be very hard in Beijing but you can always count on your hard work. Companies usually have a transparent payment system, unlike in the inland provinces, where there are so many under-the-table deals,' she said.

Ms Peng, too, moved back to Guangzhou. She cited the difficulties in getting things done in Chongqing without having the right connections, or guanxi.

Now the vice-president of an advertising company in the southern metropolis, she left Chongqing in 2007 after working there for three years.

'It is hard to find the common values with friends I used to have and enter the already completed social network of connections,' Ms Peng told the Global Times.

Things are different in the big cities, she said.

'As long as you have the ability, you can always find your place here,' she said.

Despite their high costs of living and stressful work environment, experts say working in the big cities still has its advantages.

Researcher Zhang Xuyin, who is with the China Population and Development Research Centre, told the Global Times: 'The level of social equality is much higher in the more developed regions. The price you pay for under-the-table business is extremely high.'

Bones of Nazi Hess exhumed from "pilgrimage" grave

WUNSIEDEL, Germany - The remains of Nazi leader Adolf Hitler's deputy Rudolf Hess have been exhumed from a grave in Bavaria after it became a pilgrimage for thousands of right-wing extremists.

A church official in the southern town of Wunsiedel said on Thursday the tomb had been razed and its headstone removed after consulting with Hess's family over how to handle the grave site.

"The bones were removed and brought to the crematorium, and the ashes are to be scattered at sea," Peter Seisser said.

An early, fervent member of the Nazi party, Hess spent time in prison with Hitler in the early 1920s and helped edit Mein Kampf - the book in which the dictator outlined plans to destroy European Jewry and murder other groups he considered undesirable.

Hess parachuted into Scotland in May 1941 after a mysterious solo night flight, apparently on an unauthorized peace mission. He was captured and held prisoner until 1945 - briefly as one of the last prisoners in the Tower of London.

After World War Two, he was sentenced to life in prison at the Nuremberg war crimes trials, then hanged himself in Berlin's Spandau Prison on August 17, 1987, at the age of 93.

Officials granted his wish to be buried in Wunsiedel, but earlier this year started preparing the transfer of the remains elsewhere because extremists had treated the grave - on which the phrase "I dared" was engraved -- as a shrine.

Many far-right groups say Hess did not commit suicide but was killed by British military guards in prison, and conspiracy theories about the Nazi, who was interested in the occult, abound.

Extremist groups often portray him as a martyr figure, and some from as far away as Oregon and California have organised memorials for him in the past, including a number of outdoor 'white power' rock concerts.

The annual pilgrimage of neo-Nazis in Wunsiedel peaked in 2004, when authorities say some 5,000 people came from across Europe, including left-wing counter protesters.

"Now, hopefully we can put it all behind us," deputy mayor Roland Schoeffel said. "We hope the phantom has left."

It's not who runs it, but how it is run

THE prospect of a hike in bus and train fares often triggers calls from various quarters for public transport to be nationalised. The latest, by the Workers' Party, isn't the first, nor will it be the last.

One argument presented by proponents is that public transport is an essential, basic service, and so the Government must ensure that it remains accessible to each and every citizen. Hence the profitability of operators must take a backseat.

Oil is essential and basic as well. Perhaps we should nationalise oil companies too. Ditto electricity. How about food? Thus far, there has been no call for any of these to be nationalised.

So why public transport? One reason could be that in recent years, there has been a growing mismatch between profitability of operators and the level of service of public transport. The former has either been stable or rising, while the latter has either been stagnant or sliding.

The debate over whether transport should be run by the private or public sector is as old as buses and trains themselves.

Those who favour privatisation tout superior efficiency spurred by the profit motive as one of the top reasons. This, however, has been challenged in recent years. Recent studies, including those by the International Monetary Fund and the World Bank, have concluded that it matters little whether an infrastructure or service is in private or public hands.

Hence, simply privatising a service does not necessarily make it better. History is replete with examples of privatisation or private enterprises failing miserably in the public transport arena.

British rail lines in the 1800s were built and run by private businesses. It led to unfettered (and unproductive) competition, resulting in financially strapped companies which drew circuitous routes to avoid costly tunnelling.

It was the same story with Melbourne's rail lines and tramways in the early 20th century. Because of competition, there was no coordination, resulting in gaps between services.

For a more recent example, look to Britain's privatisation of its bus services in the Thatcher years. The outcome? Uncontrolled competition, cherry-picking of routes and diminished service standards. These eventually led to a steady decline in ridership (except in London), prompting calls for re-nationalisation.

Singapore too had its own taste of this. Before SBS Transit was formed in 1973, the island was served by several operators. It was an era of rickety buses, rude conductors, drivers who raced each other to reach bus stops (to pick up fares), and vehicles filled to spilling point.

So, while privatisation in itself may seem like a good idea, there has been enough evidence to show that public transport in a laissez-faire environment rarely serves consumers well. A strong government hand is often necessary to ensure that service standards are met, and operators do not get into wasteful competitive practices or profiteer.

Even in Hong Kong, where the free market is held in esteem, the government keeps a rein on operators. Five private bus operators run state-granted territorial franchises. The buses are supplemented by minibuses which ply to relieve peak loads. The building of rail infrastructure is undertaken by the private sector, which gets development rights above and around stations. The bulk of Hong Kong MTR's revenue is thus from property development, not transit.

A number of academics, including Assistant Professor Paul Barter of the National University of Singapore's Lee Kuan Yew School of Public Policy, advocate a strong government hand in transport. In a recent paper, he noted that after decades of deregulation and privatisation starting from the 1970s, countries are beginning to realise that public sector involvement is crucial to the success of public transport.

He cites examples of cities reversing their deregulatory policies, including Santiago in Chile, where the government stepped in to revamp the bus industry in 2003. Seoul did the same in 2004.

The question, then, is what kind of regulatory powers should be exerted? In Singapore, the Public Transport Council regulates fares. Recently, it was given more power to enforce bus service standards. Train service standards are governed by the Land Transport Authority (LTA).

On the surface, it would seem the framework is workable. Fares are affordable to all but the poorest segment of society, which is assisted by vouchers and other handouts (although there are no studies to show how effective this form of targeted welfarism has been).

What about service standards? Well, it depends on which survey you reckon reflects reality best.

The LTA's polls have consistently shown a high 90 per cent commuter satisfaction rate in the last three years. Surveys by the Institute of Service Excellence showed satisfaction sliding steadily from 2007 to 2009. And a finding by research firm Frost & Sullivan revealed that Singapore's transport system ranked 18th among 23 cities surveyed between last September and February this year.

While sample sizes, methodologies and points of reference may differ, it is fair to concur - going by the grouses aired in the media, at least - that there is a slight disconnect between statistics and sentiment. Prime Minister Lee Hsien Loong himself has apologised for overcrowded buses and trains. And Transport Minister Lui Tuck Yew has admitted openly that service standards need upping.

Why has this happened? We can raise a number of hypotheses: a surge in Singapore's population; ageing infrastructure; fleet and infrastructural expansion that has not kept up with demand; and disincentives against car ownership which have pushed more people towards public transport. In all probability, it was a combination of those factors.

The fact that complaints of overcrowding and long, unpredictable waiting times have been top grouses among commuters for years shows that something has been amiss.

What can we do about it? The obvious options include nationalising public transport, enhancing the regulatory framework, and introducing contestability into the market.

Nationalisation is perhaps the riskiest. One, it does not guarantee efficiency. Two, the Government is loath to take on revenue or reputational risks. Three, it will be a monumentally costly exercise for taxpayers. Four, nationalisation spooks investors. SMRT and SBS Transit today, Singapore Airlines tomorrow?

Yet, state-run transport has worked well in some cases. The Taipei metro, owned and operated by Taipei Rapid Transit Corp, ranks consistently high in customer satisfaction and yet has been able to produce surpluses (profits). It is so well-run that commuters are inspired to write poems about it.

Tightening the regulatory framework is another possibility. One way is to tie fares to performance, as is practised in some cities. Sydney, for instance, has held back fare increases more than once because of service reliability issues.

Next, contestability: The Government has already set in motion plans to introduce this into the market. The first step involves the LTA assuming the role of master bus route planner. This removes or lightens the commercial consideration in route planning.

The next step could involve the LTA carving the island up into franchises, with operators bidding for the rights for a limited period. Operators which meet service standards may be rewarded with bonus payments, while operators which fail may have their rights terminated or not be invited to bid in the next tender. This would be done for the rail industry as well.

Contestability is deemed a more effective way of regulating the market (in some ways, with many rivals, it could be a self-policing regime). The threat of being replaced - whether real or perceived - is enough to keep operators on their toes.

Or so the theory goes. If not well-managed, a contestable market can also become wasteful and inefficient.

However Singapore deals with this problem, until the shortcomings that have made taking a bus or a train less than pleasant in the last few years are remedied, a fare increase will be viewed as controversial.

Even staff don't know it's a fake Apple store

BEIJING: Everyone has heard of fake iPads and fake iPhones, but a fake Apple store?

China's passion for all things Apple has gone into overdrive, it appears, with the discovery of a fake Apple store so convincing that even the staff think they work for Mr Steve Jobs.

The store, in the south-western city of Kunming, was uncovered by an American blogger who was initially fooled, before she noticed that not everything was as it seemed.

At first glance, the signs, computers and layout of the shop all look exactly like a genuine Apple store, says the 27-year-old blogger, who posts under the name BirdAbroad and has been living in Kunming for more than two years.

Photos posted by the blogger show the employees wearing Apple's trademark blue T-shirts with name badges hanging around their necks.

But a closer look reveals that the winding stairs going up to the chill-out area are poorly made, the walls have not been painted well, and the shopfront sign says 'Apple Store' whereas the real deal just sports the now-famous fruit logo.

The staff, however, 'all genuinely think they work for Apple', she wrote. 'Clearly, they had also been told that above all, they must protect the brand.

'As I took these photos I was quickly accosted by two salespeople inside, and three plainclothes security guys outside, putting their hands in my face and telling me to stop taking photographs - that it wasn't allowed. And why wasn't it allowed? Because their boss told them so.

'I... may or may not have told them that we were two American Apple employees visiting China and checking out the local stores. Either way, they got friendlier and allowed me to snap some pictures.'

Contacted by AFP yesterday, she said: 'I do not know if the computers were real or fake - they seemed real, but it can be hard to tell. She added: 'As of last night, the store was still open.'

And it is not the only Apple clone in the area. A quick walk around the corner revealed two other rip-off Apple stores, one of which sported a sign saying 'Apple Stoer', BirdAbroad said.

The Apple website lists four official stores in China - two in Beijing and two in Shanghai, and none in Kunming.

It has a list of approved retailers that sell its products, but none of those in Kunming corresponds to the fake store's address, according to the blogger.

A spokesman for Apple China declined to comment.

China is home to the biggest counterfeit market in the world, and despite repeated government pledges to root out fake goods, these are still widely available. As the Apple craze spreads around China, fake iPhones and iPods have emerged.

The news, however, is unlikely to have an impact on the US-based IT giant, which on Tuesday posted record sales and profits in the recent quarter as sales of iPhones and iPads more than doubled, helped by huge demand in Asia.


Fake Apple Store

Thursday, July 21, 2011

The 'Singaporean first' myth

IN A recent lecture on higher education at Singapore Management University, Dr Tony Tan pointed out how crucial it is not to impede international talent from coming here.

He essentially voiced his preference for a 'Singaporeans first' policy for higher education, rather than 'Singaporeans only' ('Tony Tan: S'poreans first, but don't shut out talent'; yesterday).

While I agree with Dr Tan's dismissal of a 'Singaporeans only' tertiary landscape, I am befuddled by his perception that Singaporeans are demanding this.

On the contrary, what Singaporeans are infuriated by are government and local university measures that excessively favour foreign 'talent' for admission.

For example, the National University of Singapore (NUS) does not have a clearly defined way of calculating the admissions score for international students.

NUS assesses admission at its own discretion and on the students' past education transcripts.

Polytechnic students, on the other hand, are admitted based on a strictly defined admissions score, comprising 80 per cent polytechnic results and 20 per cent O-level results.

Obviously, polytechnic students who might have excelled in their studies, but who have done less than spectacularly in the O levels, are disadvantaged.

Does NUS consider a polytechnic education less rigorous?

In addition, most needy local students have had to seek financial refuge in loans and bursaries, both of which do not provide complete financial relief.

The less fortunate must juggle part-time work and university studies.

Contrast this situation to that of the foreign students: Financial aid for them does not only come in the shape of exclusive scholarships, but also in Education Ministry tuition grants.

The penalty for most of these students who can already afford the higher costs of overseas education? Working with a Singapore-registered company for three years.

Dr Tan said it is not easy to find the right balance.

For a start, apply greater selectivity for the ministry's tuition grants for foreign students.

Also, a clearly stipulated admissions determinant, which resembles the template imposed on Singaporeans, should be adopted.

While many recognise the advantages of having an international student body, resolutely doing so without selectivity is pointless.

Let those who cannot afford such an education prove their mettle, and those who can, rightfully pay for their fees.

Adam Liew

Google rushes to discover the next Google

MOUNTAIN VIEW (California): Google thinks it can be young and crazy again. And it is betting US$200 million (S$240 million) that it is right.

In the hottest market for technology start-ups in over a decade, the Silicon Valley behemoth is playing venture capitalist in a rush to discover the next Facebook or Zynga.

Other pedigree tech companies are doing the same, as venture capital dollars coming from corporations approach levels last seen in the bubble era of 2000.

To some, it is a telltale sign of an overheated industry, symptomatic of a late and ill-advised rush to invest during good times. But Google said it has a weapon to guide it in picking investments - a Google-y secret sauce, which means using data-driven algorithms to analyse what would be the next big thing.

Never mind that there is often very little data because the companies are so young, and that most venture capitalists say investing is more of an art than a science. At Google, even art is quantifiable.

'Investing is being in a dark room and trying to find the way out,' said Mr Bill Maris, managing partner of Google Ventures, the corporate investment arm. 'If you have a match, you should light it.'

Corporate venture funds invested US$583 million in start-ups in the first three months of this year, said the National Venture Capital Association, a rise from US$443 million in the same period last year and US$245 million in 2009, before tech investing began its rapid turnaround.

Today, 10 per cent of venture capital dollars come from corporations, nearing the previous high of 15 per cent in 2000.

Facebook, Zynga and are investing in social media start-ups.

AOL Ventures restarted last year after three previous efforts, and Intel Capital expects to invest more this year than the US$327 million it invested last year.

Google Ventures said it has invested as much money in the first half of this year as in all of last year, and Mr Larry Page, the company's co-founder who became chief executive this spring, has promised to keep the coffers wide open.

Corporate venture arms have sprung into action before during boom times like the early 1980s and the late 1990s, but they have had mixed records.

'When the corporate guys get involved, it usually means that we're at the top of the market,' said Professor Andrew Rachleff, who teaches venture capital at Stanford and was a founder of Benchmark Capital, a venture firm.

He also questioned Google's reliance on its algorithms, saying: 'There's no analysis to be done when you're evaluating a company that's creating a new market, because there's no market to analyse. You have to apply judgment.'

Although even Mr Maris compares venture investing to 'buying lottery tickets', Google said it has faith in its algorithms.

At the same time, it is taking the unusual step of providing the chosen start-ups with access to its 28,770 employees for engineering, recruiting and business advice, and offering office space at the Googleplex and classes on building a business.

According to Mr Maris, Mr Page, who declined a request for an interview, has already promised Google Ventures US$200 million this year and said a virtually unlimited amount is available as the company reconnects with its start-up roots.

'I've had conversations with Larry in which he says, 'Do as much as you can, as fast as you can, in as big and disruptive a way as possible',' he said.

Google said its approach is paying off. One of its investments, Ngmoco, was acquired by Japanese gaming company DeNA for up to US$400 million. Another, HomeAway, for renting vacation homes, received a warm welcome from investors when it went public last month. A third, smart-grid company Silver Spring Networks, filed to go public last week.

Google Ventures invests in various areas - the Web, biotechnology and clean technology. It puts large amounts of money into mature companies, but it is also investing small amounts in 100 new companies this year.

To make its picks, the company has built computer algorithms using data from past venture investments and academic literature. For example, for individual companies, Google enters data about how long the founders worked on start-ups before raising money, and whether the founders successfully started companies in the past.

It collects similar information about potential investments before giving them a red, yellow or green light.


China's golden passage a rail mess

BEIJING: The new high-speed rail between Beijing and Shanghai was supposed to kick off a titanic battle with improved jetliners for passengers on China's most lucrative and popular travel route.
A high-speed train (above) preparing to leave Beijing on a trial run on June 27. Since its launch, incidents such as delays and breakdowns in which passengers have had to evacuate the train have been occurring frequently. -- PHOTOS: AGENCE FRANCE-PRESSE, CHINA FOTO PRESS

Delays, glitches on new Beijing-Shanghai route but flights are no better
By Peh Shing Huei, China Bureau Chief

Instead, it has become a feeble struggle to see who messes up less.
The trains have been hogging the headlines following multiple delays and malfunctions just weeks after opening on June 30. Major delays on July 10 were blamed on power cuts caused by thunderstorms.
But the flights serving China's so-called 'golden passage' have not done much better. Their delays were, however, due largely to freak weather systems, particularly rainstorms.
Singaporean Sean Bai was among those who plumped for the new-fangled train, but he got held up for more than two hours during his journey from Shanghai to Beijing last week.
'The high-speed trains were seen as a more reliable alternative to flights because they should not be affected by factors such as weather,' said the Peking University master's student.
'There was also the impression that they would operate according to a time schedule like the Japanese Shinkansen,' he added.
'It's really disappointing that breakdowns occurred so early and frequently.'
Before the bullet trains began operating, they were seen as the perfect antidote to the poor service and high prices which have plagued flights serving the capital and China's financial centre for years.
By halving travelling time on the 1,318km rail route to about five hours, the 300km-per-hour speedy locomotive was regarded as a worthy competitor to the two-hour flights, which realistically took much longer because of baggage checks and so on.
For a while after its launch - timed for the eve of the 90th birthday of the Chinese Communist Party - it worked.
To compete, airlines vowed to improve punctuality by parking a spare plane in each of the two airports in Beijing and Shanghai, according to state media. Flights on the route would also get priority from air control whenever thunderstorms or military drills affected scheduling.
Air ticket prices were slashed to as low as 400 yuan (S$75), down by an average of 40 per cent to 50 per cent, to undercut the cheapest high-speed train ticket of 410 yuan.
Chinese airlines wanted to protect their trophy route, which is highly popular among business people.
An estimated seven million passengers travelled between the two cities last year.
The line is worth more than seven billion yuan a year in revenue to the airlines, Professor Li Xiaojin, of the Civil Aviation University of China, told The Straits Times.
But since the 221-billion-yuan high-speed rail links ran into problems, flight ticket prices have rebounded. And, alas, flight delays have returned.
'Beijing-Shanghai is the busiest line in the country,' said Prof Li. 'Once a flight is delayed, it creates a horrendous domino effect on the other flights.'
The pressure is now back on high-speed rail to live up to expectations.
The State Council, China's Cabinet, has launched a safety drive, promising to sweep the rail route clean of 'illegal structures that need to be demolished'.
The Ministry of Railways has expressed regret for the glitches and promises to do better.
Said Prof Li: 'Until they solve these technical problems, the high-speed rail will not be competitive... But if they can assure quality, they will take customers from the airlines and drive flight ticket prices down once again.'
Otherwise, China's 'golden passage' remains deprived of a transport service compatible with its glowing name.
Additional reporting by Lina Miao

Wednesday, July 20, 2011

Is the bar set too low in playgrounds?

Tall jungle gyms have disappeared from most playgrounds across the US, and the most frequently cited reason is fear of lawsuits, among other factors like parental concerns. -- PHOTO: REUTERS

NEW YORK: When see-saws, tall slides and other perils were disappearing from New York's playgrounds, Mr Henry Stern drew a line in the sandbox.

Experts say a child who takes risk in play is more likely to overcome fear

As the city's parks commissioner in the 1990s, he issued an edict concerning the 3m-high jungle gym near his childhood home in northern Manhattan.

'I grew up on the monkey bars in Fort Tryon Park, and I never forgot how good it felt to get to the top of them,' Mr Stern said. '... as long as I was parks commissioner, those monkey bars were going to stay.'

His philosophy seemed reactionary at the time, but today it is shared by some researchers who question the value of 'safety-first' playgrounds.

But even if children do suffer fewer physical injuries - and the evidence for that is debatable - critics say these playgrounds may stunt emotional development, leaving children with anxieties and fears that are ultimately worse than a broken bone.

'Children need to encounter risks and overcome fears in the playground,' said Dr Ellen Sandseter, a psychology professor at Queen Maud University in Norway.

'I think monkey bars and tall slides are great. As playgrounds become more and more boring, these are some of the few features that still can give children thrilling experiences with heights and high speed.'

After observing children in playgrounds in Norway, England and Australia, Dr Sandseter identified six categories of risky play: exploring heights, experiencing high speed, handling dangerous tools, being near dangerous elements (like water or fire), rough-and-tumble play (like wrestling), and wandering alone away from adult supervision. The most common of these is climbing heights.

'Climbing equipment needs to be high enough, or else it will be too boring in the long run,' she said.

'Children approach thrills and risks in a progressive manner, and very few children would try to climb to the highest point the first time. The best thing is to let children encounter these challenges from an early age, and they will then progressively learn to master them through their play over the years.'

Of course, at times, their mastery fails, and falls are the common form of playground injury. But these rarely cause permanent damage, physically or emotionally.

While some psychologists - and many parents - worry that a child who suffers a bad fall would develop a fear of heights, studies show the opposite: A child who is hurt in a fall before the age of nine is less likely, as a teenager, to fear heights.

By gradually exposing themselves to more and more dangers in the playground, children are using the same habituation techniques developed by therapists to help adults conquer phobias, say Dr Sandseter and her fellow psychologist Leif Kennair of the Norwegian University of Science and Technology.

'Risky play mirrors effective cognitive behavioural therapy for anxiety,' they write in the journal Evolutionary Psychology, concluding that this 'anti-phobic effect' helps explain the evolution of children's fondness for thrill-seeking.

While a youthful zest for exploring heights might not seem adaptive - why would natural selection favour children who risk death before they have a chance to reproduce? - the dangers seem to be outweighed by the benefits of conquering fear and developing a sense of mastery.

'Paradoxically,' they write, 'we posit that our fear of children being harmed by mostly harmless injuries may result in more fearful children and increased levels of psychopathology.'

Tall jungle gyms and slides are gone from most playgrounds in the US because of parental concerns, federal guidelines, new safety standards set by manufacturers and - the most frequently cited factor - fear of lawsuits.

New York City officials removed see-saws, merry-go-rounds and the ropes that young Tarzans used to swing from one platform to another. Letting children swing on tyres became taboo because of fears that the heavy swings could bang into a child.

New features were introduced - such as shorter equipment and rubber flooring, wood chips or other materials designed for softer landings - and these have prevented some injuries.

Mr Adrian Benepe, New York City's current parks commissioner, said: 'What happens in America is defined by tort lawyers, and unfortunately that limits some of the adventure playgrounds.'

But while he misses the Tarzan ropes, he is glad that the litigation rate has declined. 'I think safety surfaces are a godsend,' he said. 'I suspect that parents who have to deal with concussions and broken arms wouldn't agree that playgrounds have become too safe.'

Dr David Ball, a risk management professor at Middlesex University in Londo, said: 'There is no clear evidence that playground safety measures have lowered the average risk on playgrounds.'

The risk of some injuries, like long fractures of the arm, actually increased after the introduction of softer surfaces for playgrounds in Britain and Australia, he said.

The ultra-safe enclosed platforms of the 1980s and 1990s may have been an overreaction, Mr Benepe said, but lately there have been more creative alternatives.

'The good news is that manufacturers have brought out new versions of the old toys... Because of height limitations, no one's building the old monkey bars any more, but kids can go up smaller climbing walls and rope nets and artificial rocks.'

In Singapore, the Housing Board introduced playgrounds with standard-play equipment to meet international safety standards from 1993, and rubber floors replaced sandpits from the late 1990s.

'Town councils indicated they generally preferred rubber flooring as it is impact- absorbing and provides better protection from falls, and also more versatile,' an HDB spokesman told The Straits Times. She added that safety was the HDB's top priority.


Tuesday, July 19, 2011

Consider the economic reality of transport here

MINISTER for Transport Lui Tuck Yew recently criticised the Workers' Party's proposal of a non-profit National Transport Corporation to replace the current two publicly listed transport companies.

Current public transport model has produced undesirable outcomes
By Gerald Giam, For The Straits Times

Mr Lui claimed that the proposal had 'serious downsides, chief among which commuters and taxpayers (yes, even those who don't take public transport) are likely to end up paying more, and possibly, for a poorer level of service over time'.

He added that 'it is the profit incentive of commercial enterprises that spurs efficiency and productivity improvements'.

These are simplistic arguments that fail to take account of the economic realities of the public transport industry here.

First, taxpayers who do not take public transport already contribute to the provision of public transport in the form of taxes that pay for the construction of roads, the development of rail lines and the purchase of the first set of trains on every new MRT line.

Second, public transport is an industry rife with market failures. The current regime, with SMRT Corporation (SMRT) and SBS Transit (SBST) each providing both rail and bus services, provides just an illusion of competition.

The reality is that SMRT or SBST have clearly delineated areas of responsibility with no route overlaps. This makes each of them a de facto monopoly provider in their own particular areas.

Commuters do not have the freedom to switch between providers, nor do we see operators fighting to attract and retain customers like airlines do with promotions, discounts and loyalty programmes.

Their monopoly status is also reflected in the consistently high returns these companies earn. Freed from the discipline of genuine market competition, they have few incentives to raise service standards and keep prices low.

To say that shareholder discipline will create such incentives is naive at best, and wrong at worst. Shareholders seek higher profits, not better or more affordable services. The Government must examine whether a public utility should be owned and operated by what are effectively private monopolists earning monopoly rents.

Mr Lui says the current regulatory regime is a 'robust' one that does not allow the operators to benefit at the expense of commuters. This is a remarkable assertion, considering the profits of the public transport operators - $215.4 million last year alone. The fines imposed on them for not meeting service standards pale in comparison to these profits.

SMRT and SBST have consistently enjoyed high returns on equity (ROE) of above 15 per cent. For SMRT, it has been above 20 per cent in most years. By contrast, the median ROE for a Singapore listed company is about 9.5 per cent.

A company that provides a public good should not earn excessively high returns, as these would invariably come at the expense of service quality. Overcrowded trains and buses show how companies without genuine competition can raise shareholder returns at the expense of the commuting public.

Mr Lui mentions the 'serious' downsides of a nationalised public transport system. But he ignores workable examples - even locally, where the Government subsidises public services or even provides services directly to the public.

Schools, for example, are mostly government-run. Public hospitals and clinics are significantly subsidised. Even public housing is subsidised by public money.

Yet when it comes to public transport - an essential service for the majority of Singaporeans - the Government advocates its provision by listed companies, whose first priorities are to their shareholders.

The Workers' Party has, since 2006, called for the MRT and buses servicing major trunk routes to be brought under a National Transport Corporation (NTC), which will oversee and provide universal transport services.

NTC should aim to provide safe, affordable, accessible, efficient and reliable universal public transportation services, on the basis of cost and depreciation recovery. As a not-for-profit corporation owned by the Government, it will serve the needs of the public and not that of shareholders.

This proposal recognises that public transport in Singapore is an inherent monopoly and a public good. A well-managed NTC can provide superior outcomes compared to the present profit-oriented monopolies. We would expect no less from an NTC, in terms of efficiency and cost-effectiveness, as we would from any other statutory board managed by the Government.

To achieve these outcomes, the Government should set stringent key performance indicators (KPIs) for an NTC. These include:

Affordability of fares
Containment of costs
On-time bus and train performance
Satisfactory customer ratings (through independent surveys)
High percentage of public transport ridership
Productivity improvements and innovation.
The bonuses and pay increases of NTC executives should be pegged to the achievement of such KPIs. This will be a more effective way of ensuring service standards than the present regulatory regime, where the fines imposed for failure are a pittance compared to the profits.

The current model for the provision of public transport has produced many undesirable outcomes, as evidenced by the 'crush loads' experienced by commuters every day and the public outcry each time fares are increased.

It would do Singaporeans no good if the Government sticks dogmatically to its philosophy of the virtues of privatisation and the profit motive, without considering the true economic reality of the public transport industry in Singapore.

The writer is a Non-Constituency Member of Parliament and chair of the Workers' Party's media team.