What parents need to know about VR ?


The hottest tech in videogames is virtual reality. Find out its potential effects on kids before buying a headset.

 

VR can make you think and feel things you know aren’t real. —Dreamstime/TNS
EVERYONE who’s tried it agrees: virtual reality is mind-blowing. Once you strap on that headset, you truly believe you’re strolling on a Parisian street, careening on a roller coaster, or immersed in the human body exploring the inner workings of the oesophagus.

But for all its coolness – and its potential uses, from education to medicine – not a lot is known about how VR affects kids. Common sense Media’s new report, Virtual Reality 101: What You Need to Know About Kids and VR, co-authored by the founding director of stanford University’s virtual Human Interaction Lab, offers a first-of-its-kind overview of the expanding uses for the technology and its potential effects on kids.

Now that VR devices from inexpensive viewers to game consoles to full-scale gaming arcades are finally here – with lots more coming soon – it’s a good idea to start thinking about how to manage VR when it comes knocking at your door.

VR can make you think and feel things you know aren’t real. Other media can give you the sense of “being there” – what’s called psychological presence – but not to the extent that VR can. This unique ability is what makes it so important to understand more about the short- and long-term effects of the technology on kids. Here are some of the key findings from the report.

Even though we don’t yet have all the answers to how vR affects kids, we know enough to consider some pros and cons. And whether kids are using vR through a mobile device like Google Cardboard, on a console like the Playstation vR, on a fully tricked-out desktop rig like the Oculus Rift, or at a mall arcade, these guidelines can help you keep any vR experience your kids have safe and fun.

Pay attention to age ratings. Check the recommended age on the headset package and don’t let younger kids use products designed for older kids. The minimum age isn’t based on medical proof of adverse effects on the brain and vision, but it’s the manufacturer’s best guess as to who the product is safest for.

Choose games wisely. Because the vR game experience can be more intense than that of regular games, it’s even more important to check reviews to make sure the gameplay, the content and the subject matter are appropriate for your kid.

Keep it safe. A few precautions: Once you have the goggles on, orient yourself to the room by touching the walls; stick to short sessions until you know how you’re affected by vR; stay seated if possible; move furniture out of the way; and have a second person as a spotter.

Pay attention to feelings – both physical and emotional. If you’re feeling sick to your stomach, dizzy, drained, or sad, angry, or anxious – give it a rest for a while.

Talk about experiences. since vR feels so real, it’s an excellent time to talk through what your kid has experienced in a game. Ask what it felt like, what the differences are between vR and regular games, and how vR helps you connect to other people’s experiences by putting you in someone else’s shoes.

Find opportunities; avoid pitfalls. Don’t let your kids play vR games that mimic experiences you wouldn’t want them to have in real life, such as using violent weapons. On the other hand, take advantage of vR that exposes kids to things they wouldn’t normally get to see, feel, and learn, such as visiting a foreign country.

Keep privacy in mind. Devices that can track your movements – including eye movements – could store that data for purposes that haven’t yet been invented. — Common sense Media/Tribune news service.

Star2 Technology  by Caroline Knorr

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Moving forward with affordable housing


One way to solve housing shortage problem is to build more houses.

“If we take a look at countries with commendable housing policies such
as Singapore and Hong Kong, we notice that the government plays a very
important role in building and ensuring a sufficient supply of housing
for their people.”

THE issue of affordable housing has been a hot potato for many countries, especially for a nation with a growing population and urbanisation like ours.

In my previous article, I mentioned that there was a growing shortage of affordable housing in our country according to Bank Negara governor Tan Sri Muhammad Ibrahim. The shortage is expected to reach one million units by 2020.

According to Bank of England governor Mark Carney, one of the most effective ways to address the issue is to build more houses. There are good examples in countries like United Kingdom, Australia and Singapore, which have 2.4, 2.6 and 3.35 persons per household respectively.

In comparison, the average persons per household in our country is 4.06 person, a ratio which Australia had already achieved in 1933! To improve the current ratio, we need to put more effort into building houses to bring prices down.

If we take a look at countries with commendable housing policies such as Singapore and Hong Kong, we notice that the government plays a very important role in building and ensuring a sufficient supply of housing for their people.

For example in Singapore, their Housing and Development Board (HDB) has built over one million flats and houses since 1960, to house 90% of Singaporeans in their properties. In Hong Kong, the government provides affordable housing for lower-income residents, with nearly half of the population residing in some form of public housing nowadays. The rents and prices of public housing are subsidised by the government and are significantly lower than for private housing.

To be on par with Australia (2.6 persons per household), our country needs a total of 8.6 million homes to house our urban population of 22.4 million people. In other words, we need an additional 3.3 million houses on top of our existing 5.3 million residential houses.

However, with our current total national housing production of about 80,000 units a year, it will take us more than 40 years to build 3.3 million houses! With household formation growing at a faster rate than housing production, we will still be faced with a housing shortage 40 years from now.

Therefore, even if the private sector dedicated all its current output to build affordable housing, it will still be a long journey ahead to produce sufficient houses for the nation. It is of course impossible for the private sector to do so as it will be running at a loss due to rising costs of land and construction.

In view of the above, the government has to shoulder the responsibility of building more houses for the rakyat due to the availability of resources owned by the government. Land, for example, is the most crucial element in housing development. As a lot of land resources are owned by government, they must offer these lands to relevant agencies or authorities to develop affordable housing.

I recall when I was one of the founding directors of the Selangor State Development Corp in 1970s, its main objectives was to build public housing for the rakyat.

However, today the corporation has also ventured into high end developments in order to subsidise its affordable housing initiatives. This will somehow distract them from focusing on the affordable housing sector.

Although government has rolled out various initiatives in encouraging affordable houses, it is also important for the authorities to constantly review the original objectives of the relevant housing agencies, such as the various State Economic Development Corporations, Syarikat Perumahan Negara Bhd, and 1 Malaysia People’s Housing Scheme, to ensure they have ample resources especially land and funding to continue their mission in building affordable housing.

A successful housing policy and easy access to affordable housing have a huge impact on the rakyat. It is hoped that our government escalates its effort in building affordable housing, which will enhance the happiness and well-being of the people, and the advancement of our nation.


Datuk Alan Tong has over 50 years of experience in property development. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.
By Alan Tong

Penang undersea tunnel project scrutinized by the Malaysian Anti Corruption Commission (MACC)


In troubled waters: An artist’s impression showing where the tunnel project will start on the island.

 

 

Land swap under MACC scrutiny

PETALING JAYA: The Malaysian-Anti Corruption Commission (MACC) probe into the controversial Penang undersea tunnel is focused on land swaps that were made for the feasibility and detailed design study which has yet to be completed.

Sources said investigators are scouring documents involving two plots of land – Lot 702 and Lot 713 in Bandar Tanjung Pinang – with a size of 1.48ha and 2.31ha respectively.

The value of Lot 702 is around RM135mil while Lot 713 is around RM160mil.

It is learnt that both parcels of land have since been mortgaged to banks to obtain financing. The state government has also authorised planning permission on both parcels of lands.

“The state government paid the consultant for the feasibility studies by means of two land swaps. The cost for the feasibility study is around RM305mil.

“It has become an issue on why the study cost was inflated so much when it should have been an estimated RM60mil,” sources said, adding that determining the inflation and the reason behind it were among the challenges faced by the investigating team.

The sources also said that the graft-busters have their sights targeted on “somebody” who has been enjoying kickbacks and entertainment from the deal.

The feasibility and detailed design study is for the 7.2km undersea tunnel connecting Gurney Drive on the island to Bagan Ajam in Seberang Perai.

It is part of the RM6.3bil mega project comprising a 10.53km North Coastal Paired Road (NCPR) from Tanjung Bungah to Teluk Bahang, the 5.7km Air Itam–Tun Dr Lim Chong Eu Expressway bypass and the 4.075km Gurney Drive–Tun Dr Lim Chong Eu Expressway bypass.

Yesterday, the investigating team also questioned four officers from several state government agencies on the land swaps.

Sources added that the anti-graft agency also raided a property agency office in Penang and carted various documents away. It is learnt the chief executive officer of the company was not around during the raid.

MACC deputy chief commissioner Datuk Seri Azam Baki said his investigating team has yet to call in any witnesses for the case as they are still conducting a thorough study on the seized documents.

He added that the officers would still be obtaining more documents from the companies involved and also from the state government.

 

Two bosses of construction firms held for six days as MACC investigates project

Datuks’ remanded in tunnel probe

Taken away: Officers escorting one of the men out of the courthouse in Putrajaya.

MACC digs deeper

A swap involving two parcels of land worth close to RM300mil is in the spotlight as the MACC intensifies investigations into claims of corruption in Penang’s undersea tunnel project and several accompanying highway projects. Two ‘Datuks’ have been remanded and several key officials in companies and agencies involved in the project have been questioned. But Chief Minister Lim Guan Eng says the project will go on.

GEORGE TOWN: Chief Minister Lim Guan Eng says the undersea tunnel project, now the subject of a corruption investigation, will proceed unless there is a court order to stop it.

He said he was baffled by yet another investigation into the project as the Malaysian Anti Corruption Commission (MACC) had been conducting an investigation into the RM6.3bil mega project comprising the tunnel and three other highways since 2016.

“What are they investigating now? Is it because of the looming general election?

“The project was awarded via an open tender overseen by international accounting firm KPMG.

“Still, I have instructed everyone involved to give their full cooperation to the MACC in its investigation as we have nothing to hide,” said Lim at a press conference at Komtar yesterday.

On Tuesday, graft-busters arrested two “Datuks” involved in the controversial Penang undersea tunnel project to help in investigations into claims of corruption.

The duo, who were picked up in Putrajaya and Penang, have since been remanded for six days to facilitate the probe.

The anti-graft agency raided the offices of four state government agencies – the Penang Public Works Department, Penang State Secretary, Penang Office of Lands and Mines and Penang Valuation and Property Services Department – and three property development and construction companies – Ewein Zenith Sdn Bhd, 555 Capital Sdn Bhd and Consortium Zenith Construction Sdn Bhd’s Penang office.

MACC officers also questioned several officers in charge of the respective agencies and companies. Sources familiar with the investigation said the probe into the undersea tunnel project was also zooming in on land swaps.

Ewein Zenith is a joint-venture vehicle of Ewein Land Sdn Bhd and Consortium Zenith BUCG Sdn Bhd.

The latter is a Malaysia-China joint venture that was awarded the RM6.3bil mega project to build the 7.2km undersea tunnel connecting Gurney Drive on the island to Bagan Ajam in Seberang Prai, a 10.53km North Coastal Paired Road (NCPR) from Tanjung Bungah to Teluk Bahang, the 5.7km Air Itam–Tun Dr Lim Chong Eu Expressway bypass and the 4.075km Gurney Drive–Tun Dr Lim Chong Eu Expressway bypass.

Consortium Zenith BUCG changed its name to Consortium Zenith Construction Sdn Bhd on Jan 18 last year after the withdrawal of Beijing Urban Construction Group (BUCG).

In a related development, Vertice Bhd (formerly known as Voir Holdings Bhd) said the current investigation by the MACC will not impact the progress of the undersea tunnel project.

It said the project was an integral component of the Penang Transport Master Plan and that the role of Consortium Zenith Construction as the main contractor would remain.

Consortium Zenith Construction is a 13.2% associate company of Vertice. PUTRAJAYA: Two high-ranking bosses of development and construction companies have been remanded for six days as graft investigators continue their probe of the Penang undersea tunnel project. The two “Datuks” were held here and in Penang before being brought to court.

A 59-year-old businessman was brought to a magistrate’s court here at 9.40am yesterday and remanded for six days until Monday to help with the Malaysian Anti-Corruption Commission’s (MACC) investigation.

Magistrate Fatina Amyra Abdul Jalil allowed MACC prosecutors’ remand application although the Datuk’s lawyer Hamidi Mohd Noh objected, arguing that there was no need for his client to be held.

“I told the court that my client has been cooperative with the MACC.

“I would also like to point out that my client is innocent and his remand is only to assist the investigation,” he told reporters after the proceedings.

The MACC had initially asked for the Datuk to be held for seven days but the magistrate only allowed six days.

He was arrested at the MACC headquarters at around 8.45pm on Tuesday after being called for his statement to be recorded.

In George Town, another Datuk was brought to court for a remand application at 11.40am.

He was handcuffed and wearing MACC’s orange lock-up T-shirt with black pants when he arrived at the courthouse escorted by MACC officers.

The 49-year-old appeared calm and smiled to reporters but did not say anything before he was led inside.

Deputy registrar Muhammad Azam Md Eusoff granted a six-day remand order and the businessman was escorted out of the courthouse about 30 minutes later.

The case is being investigated under Section 16(a)(B) of the MACC Act 2009 for bribery.

It is also believed that one of the Datuks remanded yesterday tested positive for drugs.

On Tuesday, MACC personnel raided the offices of four state government agencies – the Penang Public Works Department, Penang State Secretary, Penang Office of Lands and Mines and Penang Valuation and Property Services Department – and three property development and construction companies believed to be related to the case.

The project involves a plan to bore a 6.5km tunnel below the seabed to connect north Butterworth and the island.

The tunnel is to connect Bagan Ajam, a mature suburb of about 5km from the Butterworth ferry terminal, to the end of Gurney Drive near the Pangkor Road junction on the island.

Connected to the project are three paired roads to be built on the island as a traffic dispersal system to cope with the traffic that the tunnel would bring to Gurney Drive, which is already densely developed.

The three paired roads are from Teluk Bahang to Tanjung Bungah, from Pangkor Road to the Tun Dr Lim Chong Eu Expressway – part of this stretch will be underground – and from Air Itam to the expressway near the Penang bridge.

To finance the construction, projected to cost RM6.3bil, the state government is giving payment in kind of 44.5ha of state land to the contractor, Consortium Zenith Construction.

Chief Minister Lim Guan Eng told the state assembly in 2014 that the land was valued at RM1,300 per sq ft and the project, ending with the tunnel, is scheduled for completion in 2025.

It was reported last March that RM135mil worth of land had been given to the contractor as payment to fund the feasibility studies and detailed studies.

A public-listed company announced in January 2016 that it had secured an agreement to buy 20.2ha of the land from the contractor over 10 years at RM1,300 per sq ft.

It is believed that the MACC is looking into why the state government allowed the contractor to presell state land despite delays in the project construction.

More to be called up for questioning

GEORGE TOWN: Investigations into allegations of corruption in the proposed Penang Undersea Tunnel project are expected to deepen with more people likely to be called up for questioning.

A source in the Malaysian Anti-Corruption Commission (MACC) said the focus was on the feasibility and detailed design study, which had been paid for but not completed.

“We will call in more people involved in the project to assist in investigations into the study,” the source said.

He declined to comment on whether more arrests would follow after two “Datuks” were remanded for six days yesterday to help in the investigations.

The two were remanded in George Town and Putrajaya for investigations into the corruption allegations.

The MACC source declined to share details on evidence collected that led to the remand of the two Datuks yesterday but confirmed that it was about the delayed feasibility study and detailed designs.

The feasibility, detailed design studies and environmental impact assessment was reported to cost RM305mil with RM220mil already paid. Since 2015, NGOs, government agencies, political parties and state assemblymen had asked about the payment and studies, only to be met with replies they considered unsatisfactory.

Last July, the Works Ministry and Board of Engineers Malaysia (BEM) repeatedly asserted that Penang significantly overpaid, by four times, design fees involving three roads.

Barisan Nasional strategic communications director Datuk Seri Abdul Rahman Dahlan sought the professional opinion of BEM, and it was reported that BEM replied that the detailed design costs were four times higher than the maximum allowed under the gazetted scale of fees based on the total project cost.

Last August, the state government declared that the feasibility studies would be ready by September.

In October, however, Works Minister Datuk Seri Fadillah Yusof said his ministry “had not seen a single page” of it.

Source: By mazwin nik anis, royce tan, arnold loh, r. sekaran, simon khoo The Staronline

 

MACC to make more arrests – Penang undersea tunnel project

More arrests are likely in the investigations into claims of corruption in Penang’s RM6.3bil project involving an undersea tunnel and three highways after MACC officers raided 12 more places and took statements from a dozen witnesses. They are looking into an agreement on payments to the concessionaires but Penang Chief Minister Lim Guan Eng says there was no wrongdoing and that not a single sen has been paid for the undersea tunnel project.

PETALING JAYA: Investigators looking into the allegation of corruption in the Penang undersea tunnel project are said to be thoroughly looking through the papers related to the contract for the feasibility study for the undersea tunnel.

“The agreement looks suspicious and the feasibility study for the mega project does not exceed RM305mil as announced by the state government,” sources said.

“The state government might have made a payment which is way different than the real value of the study,” they said.

On Thursday, The Star reported that the graft-busters were zooming in on the land swaps of two plots of land in Bandar Tanjung Pinang.

The sources also say that the reclaimed land for the land swaps were of high value for development. It is believed that the state JKR has set the value for the study and that allegations of misappropriation were raised when the value that was paid far exceeded the initial value.

To finance the construction of the tunnel and three paired roads on the island, projected to cost RM6.3bil, the state government is giving payment in kind of 44.5ha of state land to the contractor, Consortium Zenith Construction.

Chief Minister Lim Guan Eng had told the state assembly in 2014 that the land was valued at RM1,300 per sq ft and the project, ending with the tunnel, is scheduled for completion in 2025.

It was reported last March that RM135mil worth of land had been given to the contractor as payment to fund the feasibility studies and detailed studies. However, the study has not been completed although the land has been handed over.

A public- listed company announced in January 2016 that it had secured an agreement to buy 20.2ha of the land from the contractor over 10 years at RM1,300 per sq ft.

It is believed that the MACC is looking into why the state government allowed the contractor to presell state land despite delays in the project construction and the study.

Source: The Star Malaysia reports by MAZWIN NIK ANIS and INTAN AMALINA MOHD ALI

Related stories:

MACC probe shifts to bidding process – Nation | The Star Online

MACC looking at how RM305mil was paid – Nation | The Star Online

MACC focussing on Penang tunnel project studies, sources say …

Lim: Not a single sen paid for Penang undersea tunnel project …

No money paid for project, says Lim – Nation

 12 spots raided in tunnel probe 

Guan Eng: Project will go on unless there’s a court order to stop

Vertice, Ewein shares down following Penang arrests – Business News

Ewein MD remanded by MACC – theSundaily

Related posts:

 

Penang hit by floods again !


GEORGE TOWN: Some 20 houses located on a slope in Hong Seng Estate in Mount Erskine were flooded due to blocked underground drainage.

“Not again!” was the reaction of factory worker S. Kalaiselvi, 42, who found herself neck-deep in water at her house at 2am yesterday after a three-hour downpour.

She waded through the water to higher ground with her parents, who are in their 60s.

“I have been living here for 26 years and only now am I seeing such floods,” said Kalaiselvi, who also had to move out when her house was hit by the massive floods on Nov 4 and 5 last year.

Her father Subramanian Peru­mal, 68, said he was still waiting for the relevant authorities to resolve the problem.

At the site, firemen had to install a water pump to draw out the rainwater, which flooded most of the units to waist level at one point.

It was the third time that the area was flooded since October last year.

Last Oct 30, blocked underground drainage caused floodings affecting six houses during an evening downpour, followed by massive floods during the Nov 4 and 5 storm.

On Sept 29 last year, seven houses in the estate were also affected by soil erosion.

Consultant engineer Datuk Lim Kok Khong had said the soil erosion was due to water seeping under the ground.

Kebun Bunga assemblyman Cheah Kah Peng, who has been barred from helping out with the registration of flood victims for the one-off RM700 aid given by the Penang government, was also there but offered no concrete solution to the floods in the area.

Pulau Tikus assemblyman Yap Soo Huey said nine houses had to be demolished to make way for repair works.

She said they had offered owners of the nine affected houses a low medium-cost unit each as compensation, but the residents insisted on staying put.

Earlier, Penang Flood Mitigation Committee chairman Chow Kon Yeow said the latest floods were caused by the continuous downpour that began on Thursday evening.

“The rain also coincided with a 2.34mm high tide at 2.30am yesterday,” he said.

Chow said the short-term measures to deal with the floods were to dig and deepen the rivers, and carry out upgrading and cleaning works at riverbanks to ensure that there were no blockages.

In Bukit Mertajam, a low wall sealing off the entrance to a lorry driver’s house prevented it from being submerged in floodwaters all over again.

While the water on the road outside was up to knee level, Heng Kai Chin’s home remained relatively dry, thanks to the metre-high barrier of cement and bricks.

But Heng, 43, still skipped work yesterday to keep an eye on the flooding.

A state flood report said water had entered at least 100 homes in Bukit Mertajam.

Source: The Staronline

Related Links:

Penang struck by yet another deluge

PENANGITES woke up to a cloudy and rainy morning as continuous downpour lasting for hours inundated several parts of the state.
Wet day: Students wading through floodwaters at SMK Mak Mandin in
Butterworth, Penang. (Left) Motorists braving through the waters on the
flyover at Sungai Nibong, Bayan Lepas. — MUSTAFA AHMAD/The Star and
social mediapic

 

 

Metre-high wall keeps flood out of his home

More rain in Sabah and S’wak

Fish and veggie prices go up due to scarce supply

Two primary schools in Sabah remain closed

Flood-hit students eager to return to school

 

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Jambul 1 is an IJM Trehaus Project.  Approximate Coordinates :
5°20’38.47″N,100°16′.

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https://youtu.be/kslhytLg-Wc Hills, landslides and floods: What to do?   The mega floods in Penang which followed the landslide…

Chinese are the unsung heroes of South East Asia: Robert Kuok Memoirs


They are the most amazing economic ants on Earth, ‘Sugar King’ writes in memoir

Good Chinese business management is second to none; the very best of Chinese management is without compare. I haven’t seen others come near to it in my 70year career. Robert Kuok

The overseas Chinese were the unsung heroes of the region, having helped to build South East Asia to what it is today, said Malaysian tycoon Robert Kuok (pic).

He said that it was the Chinese immigrants who tackled difficult task such as planting and tapping rubber, opening up tin mines, and ran small retail shops which eventually created a new economy around them.

“It was the Chinese who helped build up Southeast Asia. The Indians also played a big role, but the Chinese were the dominant force in helping to build the economy.

“They came very hungry and eager as immigrants, often barefooted and wearing only singlets and trousers. They would do any work available, as an honest income meant they could have food and shelter.

“I will concede that if they are totally penniless, they will do almost anything to get their first seed capital. But once they have some capital, they try very hard to rise above their past and advance their reputations as totally moral, ethical businessmen,” Kuok said based on excerpts of his memoir reported in the South China Morning Post .

“Robert Kuok, A Memoir’ is set to be released in Malaysia on Dec 1.

Kuok said the Chinese immigrants were willing to work harder than anyone else and were willing to “eat bitterness”, hence, were the most amazing economic ants on earth.

In the extracted memoir published by the South China Morning Post, Kuok, pointed out that if there were any businesses to be done on earth, one can be sure that a Chinese will be there.

“They will know whom to see, what to order, how best to save, how to make money. They don’t need expensive equipment or the trappings of office; they just deliver.

“I can tell you that Chinese businessmen compare notes every waking moment of their lives. There are no true weekends or holidays for them. That’s how they work. Every moment, they are listening, and they have skilfully developed in their own minds – each and every one of them – mental sieves to filter out rubbish and let through valuable information.

“Good Chinese business management is second to none; the very best of Chinese management is without compare. I haven’t seen others come near to it in my 70-year career,” he said.

“They flourish without the national, political and financial sponsorship or backing of their host countries. In Southeast Asia, the Chinese are often maltreated and looked down upon. Whether you go to Malaysia, Sumatra or Java, the locals call you Cina – pronounced Chee-na – in a derogatory way,” he said.

He added that the Chinese had no “fairy godmothers” financial backers.

“Yet, despite facing these odds, the overseas Chinese, through hard work, endeavour and business shrewdness, are able to produce profits of a type that no other ethnic group operating in the same environment could produce,” he said.

Kuok ultimately attributed the Chinese survivability in Southeast Asia to its cultural strength.

“They knew what was right and what was wrong. Even the most uneducated Chinese, through family education, upbringing and social environment, understands the ingredients and consequences of behaviour such as refinement, humility, understatement, coarseness, bragging and arrogance,” he said.

 

Related Links:

The Asian financial crisis – 20 years later




East Asian Economies Remain Diverse

 

It is useful to reflect on whether lessons have been learnt and if the countries are vulnerable to new crises.

IT’S been 20 years since the Asian financial crisis struck in July 1997. Since then, there has been an even bigger global financial crisis, starting in 2008. Will there be another crisis?

The Asian crisis began when speculators brought down the Thai baht. Within months, the currencies of Indonesia, South Korea and Malaysia were also affected. The East Asian Miracle turned into an Asian Financial Nightmare.

Despite the affected countries receiving only praise before the crisis, weaknesses had built up, including current account deficits, low foreign reserves and high external debt.

In particular, the countries had recently liberalised their financial system in line with international advice. This enabled local private companies to freely borrow from abroad, mainly in US dollars. Companies and banks in Korea, Indonesia and Thailand had in each country rapidly accumulated over a hundred billion dollars of external loans. This was the Achilles heel that led their countries to crisis.

These weaknesses made the countries ripe for speculators to bet against their currencies. When the governments used up their reserves in a vain attempt to stem the currency fall, three of the countries ran out of foreign exchange.

They went to the International Monetary Fund (IMF) for bailout loans that carried draconian conditions that worsened their economic situation.

Malaysia was fortunate. It did not seek IMF loans. The foreign reserves had become dangerously low but were just about adequate. If the ringgit had fallen a bit further, the danger line would have been breached.

After a year of self-imposed austerity measures, Malaysia dramatically switched course and introduced a set of unorthodox policies.

These included pegging the ringgit to the dollar, selective capital controls to prevent short-term funds from exiting, lowering interest rates, increasing government spending and rescuing failing companies and banks.

This was the opposite of orthodoxy and the IMF policies. The global establishment predicted the sure collapse of the Malaysian economy.

But surprisingly, the economy recovered even faster and with fewer losses than the other countries. Today, the Malaysian measures are often cited as a successful anti-crisis strategy.

The IMF itself has changed a little. It now includes some capital controls as part of legitimate policy measures.

The Asian countries, vowing never to go to the IMF again, built up strong current account surpluses and foreign reserves to protect against bad years and keep off speculators. The economies recovered, but never back to the spectacular 7% to 10% pre-crisis growth rates.

Then in 2008, the global financial crisis erupted with the United States as its epicentre. The tip of the iceberg was the collapse of Lehman Brothers and the massive loans given out to non-credit-worthy house-buyers.

The underlying cause was the deregulation of US finance and the freedom with which financial institutions could devise all kinds of manipulative schemes and “financial products” to draw in unsuspecting customers. They made billions of dollars but the house of cards came tumbling down.

To fight the crisis, the US, under President Barack Obama, embarked first on expanding government spending and then on financial policies of near-zero interest rates and “quantitative easing”, with the Federal Reserve pumping trillions of dollars into the US banks.

It was hoped the cheap credit would get consumers and businesses to spend and lift the economy. But instead, a significant portion of the trillions went via investors into speculative activities, including abroad to emerging economies.

Europe, on the verge of recession, followed the US with near zero interest rates and large quantitative easing, with limited results.

The US-Europe financial crisis affected Asian countries in a limited way through declines in export growth and commodity prices. The large foreign reserves built up after the Asian crisis, plus the current account surplus situation, acted as buffers against external debt problems and kept speculators at bay.

Just as important, hundreds of billions of funds from the US and Europe poured into Asia yearly in search of higher yields. These massive capital inflows helped to boost Asian countries’ growth, but could cause their own problems.

First, they led to asset bubbles or rapid price increases of houses and the stock markets, and the bubbles may burst when they are over-ripe.

Second, many of the portfolio investors are short-term funds looking for quick profit, and they can be expected to leave when conditions change.

Third, the countries receiving capital inflows become vulnerable to financial volatility and economic instability.

If and when investors pull some or a lot of their money out, there may be price declines, inadequate replenishment of bonds, and a fall in the levels of currency and foreign reserves.

A few countries may face a new financial crisis.

A new vulnerability in many emerging economies is the rapid build-up of external debt in the form of bonds denominated in the local currency.

The Asian crisis two decades ago taught that over-borrowing in foreign currency can create difficulties in debt repayment should the local currency level fall.

To avoid this, many countries sold bonds denominated in the local currency to foreign investors.

However, if the bonds held by foreigners are large in value, the country will still be vulnerable to the effects of a withdrawal.

As an example, almost half of Malaysian government securities, denominated in ringgit, are held by foreigners.

Though the country does not face the risk of having to pay more in ringgit if there is a fall in the local currency, it may have other difficulties if foreigners withdraw their bonds.

What is the state of the world economy, what are the chances of a new financial crisis, and how would the Asian countries like Malaysia fare?

These are big and relevant questions to ponder 20 years after the start of the Asian crisis and nine years after the global crisis.

But we will have to consider them in another article.

By Martin Khor Global Trend

Martin Khor (director@southcentre.org) is executive director of the South Centre. The views expressed here are entirely his own.
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