Berners-Lee: Facebook ‘threatens’ web future

Zuckerberg rains on 20th birthday bash

By Cade Metz in San Francisco • Get more from this author

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Tim Berners Lee has dubbed Facebook a threat to the universality of the world wide web.Next month marks the twentieth anniversary of the first webpage – severed up by Berners-Lee at the CERN particle physics lab in Geneva – and in the December issue of Science American, he celebrates the uniquely democratic nature of his creation, before warning against the forces that could eventually bring it down. “Several threats to the Web’s universality have arisen recently,” he says. 

He briefly warns of cable giants who may prevent the free flow of content across the net. “Cable television companies that sell internet connectivity are considering whether to limit their Internet users to downloading only the company’s mix of entertainment,” he says. And then he sticks the boot into social networking sites, including Mark Zuckerberg’s net behemoth. “Facebook, LinkedIn, Friendster and others typically provide value by capturing information as you enter it: your birthday, your e-mail address, your likes, and links indicating who is friends with whom and who is in which photograph,” Berners-Lee writes.

“The sites assemble these bits of data into brilliant databases and reuse the information to provide value-added service—but only within their sites. Once you enter your data into one of these services, you cannot easily use them on another site. Each site is a silo, walled off from the others. Yes, your site’s pages are on the Web, but your data are not. You can access a Web page about a list of people you have created in one site, but you cannot send that list, or items from it, to another site.”

This is just the complaint Google made earlier this month as it banned Facebook from tapping Gmail’s Contacts API. Mountain Views won’t allow netizens to export email addresses to Facebook unless it reciprocates.

“The isolation occurs because each piece of information does not have a URI,” Berner-Lee continues, referring to his original name for the url. “Connections among data exist only within a site. So the more you enter, the more you become locked in. Your social-networking site becomes a central platform — a closed silo of content, and one that does not give you full control over your information in it. The more this kind of architecture gains widespread use, the more the Web becomes fragmented, and the less we enjoy a single, universal information space.

“A related danger is that one social-networking site—or one search engine or one browser—gets so big that it becomes a monopoly, which tends to limit innovation.” The threat here is not Friendster. It’s Facebook, which now boasts over 500 million users worldwide.

Berners-Lee urges the adoption of more democratic services, including Facebook alternatives GnuSocial and Diaspora as well as the Status.net project, which gave rise to a decentralized incarnation of Twitter. “As has been the case since the Web began,” he says, “continued grassroots innovation may be the best check and balance against any one company or government that tries to undermine universality.”

Entitled “Love Live the Web,” the Scientific American piece goes to promote the use of, yes, open standards. If you don’t use open standards, Berners-Lee says, you create “closed worlds.” Like Apple’s iTunes. “Apple’s iTunes system,” he says, “identifies songs and videos using URIs that are open. But instead of ‘http:’ the addresses begin with ‘itunes:,’ which is proprietary. You can access an ‘itunes:’ link only using Apple’s proprietary iTunes program.

“You can’t make a link to any information in the iTunes world—a song or information about a band. You can’t send that link to someone else to see. You are no longer on the Web. The iTunes world is centralized and walled off. You are trapped in a single store, rather than being on the open marketplace. For all the store’s wonderful features, its evolution is limited to what one company thinks up.”

He also bemoans the proliferation of net-connected apps on the Apple iPhone and other smartphones. “The tendency for magazines, for example, to produce smartphone ‘apps’ rather than Web apps is disturbing, because that material is off the Web. You can’t bookmark it or e-mail a link to a page within it. You can’t tweet it. It is better to build a Web app that will also run on smartphone browsers, and the techniques for doing so are getting better all the time.”

Dredging up Comcast’s BitTorrent busting, he then warns against threats to so-called net neutrality. This includes Google for the FCC filing it laid down this summer in tandem with US telco giant Verizon. “Unfortunately, in August, Google and Verizon for some reason suggested that net neutrality should not apply to mobile phone–based connections,” he says.

“Many people in rural areas from Utah to Uganda have access to the Internet only via mobile phones; exempting wireless from net neutrality would leave these users open to discrimination of service. It is also bizarre to imagine that my fundamental right to access the information source of my choice should apply when I am on my WiFi-connected computer at home but not when I use my cell phone.”</p.

Eric Schmidt now says that Google’s proposal omitted wireless simply because this makes it easier to reach a compromise with the likes of Verizon on wireless lines. Wireless net neutrality, he indicates, will come later. But Berners-Lee is right to be, shall we say, skeptical.

He also warns against Phorm-style snooping and governments that restrict free speech on the web. But ultimately, he’s optimistic. “Now is an exciting time,” he says. “Web developers, companies, governments and citizens should work together openly and cooperatively, as we have done thus far, to preserve the Web’s fundamental principles, as well as those of the Internet, ensuring that the technological protocols and social conventions we set up respect basic human values. The goal of the Web is to serve humanity. We build it now so that those who come to it later will be able to create things that we cannot ourselves imagine.” ®

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YTL launches converged 4G network,Extending Internet coverage; cheapest & survive?

YTL launches converged 4G network

Eva Yeong

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KUALA LUMPUR (Nov 19, 2010): YTL Communications Sdn Bhd today launched the world’s first fully converged 4G mobile Internet service with voice offering the industry’s lowest rates at nine sen a minute, per SMS or per 3MB of data through its pay-as-you-go plan.

The Yes service incorporates fully converged data and voice services, speeds of up to five times faster than 3G, new devices and a unified communication tool. The Yes service was officially launched by Deputy Prime Minister Tan Sri Muhyiddin Yassin (pix above).

YTL Communications executive chairman Tan Sri Dr Francis Yeoh said: “Every Yes account comes with high-speed Internet access and a mobile phone number, making the convergence of data and voice seamless. Our subscribers will have not only high-speed mobile data access but will also enjoy voice, online chat and SMS services that can be accessed from anywhere in the world, through the Internet.”

The Yes plan, which offers nine sen per minute/SMS/3MB is up to three times lower than current prepaid mobile Internet and voice packages, and combines voice, mobile Internet and mobile broadband into an integrated plan so that consumers do not have to pay multiple bills.

YTL Communications chief executive officer Wing K Lee said there is no throttling of data services and there is no wastage as customers are charged only for what they use.

He said there is no contract or lock-in period and there is no expiry for the credits.

Yes also offers up to 30% rebate to power users who consume a high amount of data that reduces the rates to as low as two sen per MB or RM20 per GB.

Yes is also a SIM-less service that comes with a user ID and telephone number that works across all devices, turning any device connected to the Internet into a phone.

During the launch today, YTL Communications and Samsung introduced the first all-4G mobile phone, the Yes Buzz. Other Yes 4G devices include Yes Huddle (4G mobile router), Yes Go (4G USB dongle) and Yes Zoom (4G WiFi router).

At the launch, the Yes 4G covers 65% of the population in Peninsular Malaysia and the company aims to increase the coverage to at least 80% by end- 2011.

Yeoh said that it currently has the licence for only Peninsular Malaysia but will extend the service to Sabah and Sarawak at the right time.

He said Malaysians travelling abroad can also keep in touch with friends and family at home through Yes at local rates without worrying about roaming charges.

He added that it would be giving 300MB of data or 100 minutes of voice calls a month free to every student registered under its Education Partner programme. “I am also pleased to announce that we will be extending the Education Partner programme to all government-sponsored scholars abroad.”

Speaking at the launch, Muhyiddin said the service would help the government improve the household broadband penetration which is currently at 54.5%.

“I am confident that we can reach even more households and help establish high quality and affordable broadband network that will reach 95% of the population by 2020,” he said.

He added that it is critical for the nation to balance market-friendly environment to drive private investments with maintaining its inclusive policy aims, particularly on affordability of access and quality of service in rural area.

YTL Comms extending coverage

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Its Yes service will cover 80% of population by end-2011 from 65% now.

KUALA LUMPUR: YTL Communications Sdn Bhd (YTL Comms) will roll out its 4G mobile Internet-with-voice service, Yes, to cover 80% of the population by end-2011.

YTL Comms, a unit of YTL Power International Bhd, currently has a coverage of 65%. To date, it has invested some RM2.5bil in the Yes 4G infrastructure.

We will extend to Sabah and Sarawak at the right time, executive director Datuk Yeoh Seok Hong told a briefing prior to the service launch by Deputy Prime Minister Tan Sri Muhyiddin Yassin yesterday.

Seok Hong said that with 1,500 base stations, the event marked the largest network ever launched in the country.

We still have 1,000 base stations to be deployed. By then, 80% of the population will be covered, he said.

Chief executive officer Wing K. Lee said Yes was the most affordable 4G mobile Internet-with-voice service in Malaysia.

He said its pay-as-you-go rate of nine sen for 3MB (megabit) data, one-minute call or one short-messaging service was the cheapest in town.

Lee said Yes also offered up to 30% rebate to power users who consume high amounts of data.

The saving starts at 2.5GB (gigabit). The more you use, the less you pay, he said, adding that for usage of 4GB and above, subscribers would get a 30% rebate for every GB used.

Yes subscribers will receive a rebate of RM9 for data usage of 2.5GB while usage of 3GB will get RM23 rebate.

The rebates will reduce Yes’ rates to as low as two sen per MB or RM20 per GB while giving users the power to self-manage by setting temporary data caps.

YTL Comms and Samsung have also introduced the world’s first all-4G mobile phone, Yes Buzz, which will be available next month.

The 4G network will be SIM-less with the 018 prefix.

YTL Comms chairman Tan Sri Francis Yeoh declined to give a specific target of pre-registered subscribers but said the numbers were healthy.

He said the response to the pre-registration had exceeded the group’s expectations by three times.

Yeoh said the group was keen to cooperate with telecommunications service providers in China and other Asian countries to offer 4G services.

Prior to the launch, Yes 4G faced interconnectivity issues with other networks as it was unable to interconnect with the operators. However, the group managed to sign interconnectivity agreements with them yesterday.

We’re now finally interconnected with everybody. We have received full cooperation (from other telcos), Seok Hong said, adding that other operators had welcomed them onboard.

At the launch, Muhyiddin spent five minutes on a video call with Malaysian students in London.

Also present were YTL Corp executive chairman Tan Sri Yeoh Tiong Lay; Information, Communications and Culture Minister Datuk Seri Utama Dr Rais Yatim; Tun Lim Kheng Yaik; and Datuk Seri Chua Soi Lek.

YTL : [Stock Watch] [News]

Can YTL keep promise to be cheapest mobile phone service and survive?

AS expected, the mobile Internet service from YTL Communications Sdn Bhd, Yes, was launched last Friday with much fanfare. Some consumers are excited and rightly so.

YTL is promising the cheapest communication rates in the country with a simple integrated plan that combines voice, SMS and mobile data. There is also talk that YTL could offer Internet protocol TV soon.

YTL’s Yes launch, however, is reminiscent of a couple of other launches of telecommunications-related services in the past by newcomers attempting to break into the scene.

Those following the telco or broadband scene will remember that in the last 10 years or so, there have been many players who have come into the wireless broadband scene.

Alas, despite their ambitious and sometimes colourful ad campaigns, many have not been able to sustain their businesses.

Here are some examples:

EB Capital Bhd launched its wireless broadband service in 2001, got listed in 2005 and went into major financial difficulties by 2008, when it was de-listed.At one point, had more than 1,500 corporate and retail customers for its wireless broadband service and had even done trials on WiMAX.

AtlasOne Sdn Bhd, started by a bunch of former Celcom employees around 2000. It was hailed as the new broadband player in town when it announced that it had garnered a significant amount of funding.At one point, it was said to have raised RM370mil partly from the Islamic Development Bank in Jeddah and partly from Bank Pembangunan Malaysia Bhd. But AtlasOne fizzled out and little has been reported about whether its funders had got their money back.

Time dotCom Bhd (TdC) in 2004 launched its wireless broadband service called Webbit in certain areas of Petaling Jaya. It is believed that TdC had not even managed to move beyond its pilot phase for various reasons, the bulk of them being technical in nature.

MiTV Corp Sdn Bhd, launched in 2005 as the country’s second pay-TV operator, had expected to sign up 100,000 subscribers for the first year.It failed to gain a foothold in the pay-TV market and suspended its new subscription activities in late 2006, only to morph its business model into a cellphone service provider in the country.It changed its name to U Mobile Sdn Bhd, and operates the 018 prefix service and is now running trials on a wireless broadband service. Singapore’s STT Communications Ltd and Multi-Purpose Holdings Bhd have bought stakes in U Mobile.

Green Packet Bhd, the most significant licensed WiMAX player in Malaysia (considering its widest coverage), has so far reported losses over the last few years due to its high capital expenditure in rolling out its network.It promises profitability, at least from an Ebitda (earnings before interest, tax, depreciation and amortisation) calculation, by next year.

No doubt, many players are driven to the industry by the attractive Ebitda margins achieved by the entrenched players, such DiGi.Com, Celcom and Maxis. But those starting afresh face major challenges and this is why many have failed.

First, you are up against some serious competition the incumbents are not about to give up a customer easily and these players have to some extent, sunken costs that put them in a better position to fight on price.

Then there are the huge costs involved in rolling services, on multiple fronts actually. Firstly, there is the network itself, which includes not only the equipment costs but also having pay real estate owners a rental for using their area to put up base stations and other equipment.Then you have to continuously ensure your service is up and running and of a certain quality.

It can cost a lot of money to deploy a sufficient number of technically competent staff.Then there are the other fixed costs such as paying for billing systems, the call centres to handle customer queries and complaints and in some instances, having to pay what is called a device subsidy.This is where players absorb some of the cost of devices sold that use their network so as to entice customers.One of the world’s leading WiMAX players, US-based Clearwire, is still reporting losses.

Still, perhaps a time will come when WiMAX players will achieve healthy Ebitda margins. And perhaps then they will enjoy the kind of investor interest that DiGi.Com and Maxis have today, due to their massive cash flows. Time will tell.

Deputy news editor Risen Jayaseelan says that despite the lack of visibility of profits of WiMAX players, the entry of new service providers can only mean good news to consumers, who should enjoy better rates for their telecommuncation needs.

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4G service from YTL upbeat,Lower prices for Internet services?

Malaysian charged with hacking into US bank, highly skilled

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NEW YORK: A Malaysian man, charged on Thursday with hacking into computer networks of the US Federal Reserve Bank (FRB) and a defence contractor, was caught by Secret Service agents while selling stolen credit card numbers for US$1,000 (RM3,200) at a diner in New York.

Court documents released by US prosecutors said the man, identified as Lin Mun Poo, 32, was arrested on Oct 21, hours after arriving in New York.

He was indicted by a grand jury on Thursday on four charges, including hacking into the system of a US central bank branch in Cleveland, Ohio.

“In his post-arrest statement, the defendant admitted compromising the computer servers of a number of major financial institutions and companies,” US prosecutors in Brooklyn wrote in a letter to US District Judge Dora Irizarry, who was assigned the case.

It said Lin admitted exploiting a vulnerability he found in the bank’s computer system.

“The Federal Reserve Bank in Cleveland, Ohio, has confirmed that an FRB computer network was hacked in June 2010, resulting in thousands of dollars in damages, affecting 10 or more computers,” the letter said.

A court hearing for the judge to consider a government request to continue to detain Lin was postponed. No new date has been scheduled yet. Lin’s court-appointed lawyer was not available to comment.

Lin is a Malaysian with no professional or family ties to the US, the letter said. He arrived at New York’s John F. Kennedy airport from Europe with a round-trip ticket, planning to return on Nov 22.

“Within hours of his arrival at JFK, US Secret Service agents observed the defendant selling stolen credit card numbers for $1,000 at a diner in Brooklyn and arrested him shortly thereafter,” the letter to the judge said.

Other allegations against Lin include possession of more than 400,000 stolen credit cards and debit cards on an encrypted laptop computer that the agents seized.

If convicted, he faces a potential maximum prison sentence of between six-and-a-half years to eight years.

Source: Reuters

Sunday November 21, 2010

Malaysian hacker highly skilled

By AMY CHEW and CHRISTINA TAN
newsdesk@thestar.com.my

PETALING JAYA: The Malaysian accused of hacking into the system of a US central bank branch in Cleveland, Ohio, is believed to be highly skilled and collaborating with others in carrying out cyber crimes.

US prosecutors described Lin Mun Poo, 32, as an “extremely sophisticated and dangerous computer hacker” in documents obtained from the US Justice Department.

Lin made world headlines for the wrong reasons — he managed to hack into high security cyber systems of major institutions in the US, including the Federal Reserve Bank and the Pentagon’s security contractors.

He was caught in a New York diner by the Secret Service on Oct 21 while allegedly selling stolen credit card numbers for US$1,000 (RM3,100). It was only hours after he had arrived in the city.

On Thursday, he was indicted by a grand jury on four charges, including for hacking into the central bank branch in Cleveland.

If convicted, Lin faces a jail sentence of between six-and-a-half years and eight years.

According to Malaysian authorities, Lin hails from Ipoh where he has a registered business address.

“He is highly professional and we believe he works with at least one accomplice,” a senior police official told Sunday Star.

Lin, according to the official, came to the attention of US authorities four years ago in Thailand, where he was allegedly involved in hacking into some US-linked organisations.

“The fact that he was arrested by the Secret Service showed the seriousness of his activities.

“The Secret Service handles cases which are deemed to be a threat to national security,” said the official.

Justice Department prosecutors told US district judge Dora Irizarry in a letter that in August, Lin hacked into the secure computer system of a major defence department contractor which provides systems management for military transport and other highly sensitive military operations.

It is understood that the primary purpose of Lin’s trip to the United States was to meet someone he believed was capable of regularly providing him with a large volume of stolen card numbers and personal identification numbers.

Meanwhile, consul-general in New York Mohd Zamruni Khalid said he received notification from authorities on Friday regarding Lin’s arrest.

Efforts were being made to see Lin and contact his family in Malaysia, he said, adding that the Consulate General office was prepared to provide assistance if there was a request from Lin or his family.

However, he declined to comment further until they met Lin.

The G-20 Seoul Summit: Much ado about nothing

WHAT ARE WE TO DO BY TAN SRI LIN SEE-YAN

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THE recent G-20 Seoul Summit was a disappointment. Because expectations were carefully managed down, most were really not surprised to be disappointed.

When all is said and done, nothing really happened. The G-20 succeeded in assisting the traditional and emerging powers to agree to disagree.

Pretty much more of the same; each country will continue doing whatever it was already doing. Much ado about nothing really except the willingness to keep talking and worrying.

US President Barack Obama puts it best: The work that we do here is not always going to seem dramatic. It’s not always going to be immediately world changing. But step-by-step what we are doing is building stronger international mechanisms and institutions that will help stabilise the economy, ensure economic growth and reduce some tensions.

British Prime Minister David Cameron added: The key thing is (the global trade imbalance) is being discussed in a proper multilateral way without resort to tit-for-tat measures and selfish policies. Let’s hope it was not a multilateral monologue.

The communiqu reflected re-warmed pronouncements of good intensions. While understandably short of actionable solutions, it did at least seem to acknowledge the difficulties of the situation.

Not surprisingly, the G-20 reiterated its commitment to work together towards strong, sustainable and balanced (SSB) growth and to take additional measures to achieve shared objectives.

After dramatically forging a sense of unity during the crisis, the G-20 has now splintered with competitive policies and rancour taking place instead of taking on coordinated policy actions.

While the leaders were side-tracked from making strong decisions, a new report from the International Monetary Fund (IMF) suggested that much more forceful action on imbalances is likely to be needed, and soon, with prospects of deficits in the advanced nations likely to double by 2014 if nothing is done now.

All the G-20 Summit managed to produce was a final document in which leaders agreed on various measures to achieve economic stability, none of them specific enough to act upon, or enforceable.

The Seoul Action Plan (SAP)

The G-20 launched the SAP, shaped with unity of purpose to ensure unwavering commitment to cooperation, with each member making concrete policy commitments to deliver all three objectives of SSB growth. Specifically, commitments were made to act in five policy areas:

• Monetary and exchange rate policies: The G-20 Group will move toward more market-determined exchange rate systems and enhance exchange rate flexibility to reflect underlying economic fundamentals which China claims it’s already doing and refrain from competitive devaluation of currencies which the United States denies its QE2 (second round of quantitative easing) is engaged in and help mitigate the risk of excessive volatility in capital flows facing some emerging market economies by allowing the use of carefully designed macro-prudential measures sanctioning for the first time capital controls which are increasingly being imposed by the likes of South Korea, China, Brazil, the Philippines and Thailand flooded with foreign capital (arriving mostly from cheap excess dollars from QE2 in search of higher yields), thus avoiding being considered global scofflaws.

• Structural reforms: The G-20 Group will implement a range of structural reforms to boost and sustain global demand, contribute to global re-balancing and strengthen multilateral cooperation to promote external sustainability, and pursue the full range of policies conducive to reducing excessive imbalances and maintaining current account imbalances at sustainable levels.

Since the last summit in 2009, commitments like these ran into insurmountable problems of not being able to simultaneously agree on specific policies to achieve their ambitions, nor a timetable or an enforceable mechanism to ensure everyone plays ball.

Leaders in Seoul expressed the conviction that this time would be different. They promised to assess imbalances by nebulous-sounding indicative guidelines, to be developed by the Framework Working Group (assisted by the IMF) and discussed by finance ministers in the first half of 2011. This time, the G-20 talks of a shared responsibility (where) members with sustained, significant external deficits pledge to undertake policies to support private savings and where appropriate undertake fiscal consolidation, while maintaining open markets and strengthening export sectors. Members with sustained significant external surpluses pledge to strengthen domestic sources of growth.

But without effective coordinated cooperative action, unsustainable imbalances will eventually be adjusted by market forces with the inevitable result of making things harder all round.

The risk now is for adjustment to be messier than it needs be. Where market forces are not allowed to prevail (as in China), the temptation for politicians (in the United States and Europe) to try to force adjustment through tariffs and import barriers can only grow.

I now sense a pervasiveness that the G-20 has reached the limit of cooperative efforts towards global rebalancing. With advanced economies barely plodding along while emerging nations are enjoying robust growth, reconnecting the different approaches to policies required will become increasingly more difficult.

Bear in mind the Germans are still growing after rejecting US advances in 2009 to join the US spending stimulus. China is growing smartly having rejected counsel from three US Administrations to abandon its currency discipline.

Even the UK and France are pursuing more fiscal restraint. Only the United States is determined to keep both the fiscal (hopefully) and monetary spigots open, while blaming everyone else for its jobless recovery.

China, India and other Asian economies fear that rather than spurring more growth in the US, QE2 is flooding the developing world with more dollars than they are able to efficiently absorb, producing uncertain exchange rate volatility to the detriment of their external trade and sending the world’s dollar-denominated commodity prices climbing with serious impact on domestic inflation.

Agreeing to measurable targets for external imbalances is bound to prove difficult. Already, before the summit, China and Germany had rejected specific targets for current accounts (amounting to new controls on trade and capital flows which go against three decades of US policy against barriers to the free flow of money and goods) just as other groups of countries had refused in 2009 to sign up to specific stimulus targets.

As a compromise, the vague notion of indicative guidelines was set to usher in the year ahead of squabbling about the right indicators to use.

The underlying problem, as I see it, lies in forcing nations to agree when they have irreconcilable differences over their global economic approaches and domestic policy prescriptions.

In practice, no country is willing to cede sovereignty of its basic economic policies to a multilateral agency. The follow-through is bound to raise serious problems.

• Fiscal policies: Advanced economies will formulate and implement clear, credible, ambitious and growth friendly medium-term fiscal consolidation plans. Like it nor not, the conflict between the new world approach (essentially Keynesian, involving continuing stimulus with fiscal adjustments over the medium term when economic recovery is entrenched) and the old world approach (largely Hayekian, i.e. fiscal consolidation to address the deficit and debt problems now because it is good for confidence, consumption and investment today according to European Central Bank President Jean-Claude Trichet) is real and here to stay. Its resolution, in my view, heightens the urgent need for serious global coordination of polices, especially monetary policy.

• Financial reforms: The G-20 Group is committed to take action to raise standards and ensure national authorities implement global standards developed to deter, consistently, in a way that ensures a level playing field and avoids fragmentation of markets, protectionism and regulatory arbitrage (and) will implement fully the new bank capital and liquidity standards and address too-big-to-fail problems. As I understand it, officials will finalise a package of capital surcharges and other safety measures next year.

IMF reform: the G-20 made a historic breakthrough in granting a greater voice to developing nations at the governance of the IMF at the expense of Europe. This ensures that quotas and management composition at the IMF are more reflective of new global economic realities.

China will become the third largest member of the 187-strong institution. Horse-trading is still on-going on the final re-composition of the boards and to pursue all outstanding governance reform issues at the World Bank and IMF.

• Trade and development policies: The G-20 Group reaffirms its commitment to free trade and investment (and) will refrain from introducing, and oppose protectionist actions in all forms and recognise the importance of a prompt conclusion of the Doha negotiations.

However, it offered no sense on how to resolve serious tensions between rich and poor nations that tank the talks in the first place.

Shared growth

The Seoul Development Consensus (SDC) is intended to steer international development away from financial handouts to broaden the factors that promote economic growth, especially in infrastructure.

It stands in contrast to the 1989 Washington Consensus, which focussed on fiscal discipline, privatisation and trade liberalisation.

The SDC envisages rich countries to engage poor nations as equal partners and allow them to set their own strategic course; no one-size-fits-all formula for development success i.e. leaves nations to design and implement development strategies tailored to individual needs and circumstances; and a multi-year action plan focusing on infrastructure, private investment, jobs and food security for poor countries.

In an unprecedented step, a panel of 12 nations was created to work in 2011 on measures to mobilise infrastructure financing. On these, the G-20 promised to deliver. As I see it, SDC’s pragmatic and pluralistic view of development is appealing enough. But it avoided setting numerical targets that can hold richer nations to account in areas such as opening up markets to exports from the developing world.

It’s a pity the G-20 lacked leadership this time around. No doubt faltering US influence will produce a vacuum. But the fact remains the United States is still the world’s largest economy, the issuer of its sole reserve currency, and its lone military superpower.

Future leadership is now tied to US policies and priorities to lead the global economy. To begin with, US primacy and credibility can be regained only with robust all-round economic performance.

As someone just remarked: the US needs to start punching above its weight rather than below it. It is also a fact that on current trends, emerging markets and developing nations will account for 60% of global gross domestic product within six years. It’s a different world ahead. This heightens the need to find a new normal whereby US relationship with China and the new world remains central in the challenges going forward.

As prof L. Summers puts it this week: Our wisdom, their wisdom, the way in which we interact is going to be of the utmost importance. Leaderless, the G-20 now shapes up as the least ineffective global forum not enough to keep another crisis away, or deal with one when it arrives. We just have to wait and see.

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

WB official charts challenges for world economy, calls for more coordination

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World Band senior vice president Vinod Thomas Friday called for more coordination between governments to ensure global economic recovery, and warned against quantitative easing (QE), currency wars and fiscal deficit expansion.

In an interview with Xinhua, Thomas said deficit and debt-laden countries, especially OECD industrial sates, had little room to expand fiscally.

Thomas said QE had limits because it created a lot of money that tried to move to other countries for better interest rates, including Brazil and China.

“You cannot use it as a way to increasing growth,” he said.

Earlier this month, the U.S. Federal Reserve started a controversial plan to buy 600 billion U.S. dollars in Treasury bonds, known as the QE2 monetary policy, to jumpstart the sluggish U.S. economic growth.

Thomas, also director general of the WB’s Independent Evaluation Group, told Xinhua that if all countries tried to make their exchange rates lower, the effect would be canceled.

He said the growth of emerging economies was critical to reestablish global economic prosperity and for that purpose trade openness is important.

He said the recovery of growth in the United States, Europe and Japan, depended on not only trade remaining open, but improvements in domestic demand.

He also warned about a possible food and agriculture crisis, which would be major concern for emerging and low-income countries amid global climate change.

He said the world needed to find a way to generate more productivity, reduce energy waste, improve infrastructure or improve quality education.

“Policies to generate productivity and growth would seem to be the best way,” he said.

Thomas said China’s macroeconomic picture had tightened, but it was still robust compared with other countries.

He said the fundamental question for China was the quality of growth and it was critical to keep the growth inclusive and to avoid increasing wealth gaps.

Source: Xinhua

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