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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Crisis of the West or crisis of faith, year of living dangerously?


Global standard: A man walks past a poster showing a US dollar outside an exchange office in Cairo. The dollar has maintained its position as a global standard because it is convenient, cheap to use and a store of value that has so far been subject to minimal political interference. — AP

 

OVER the Chinese New Year holidays, we were all treated to the Trump Reality Show, changing the world we thought we understood with various tweets or executive orders.

This behaviour reminded me of the Chinese philosopher Zhuangzi waking up and was not sure he was a man dreaming that he was a butterfly, or a butterfly dreaming that it was a man. Mr Trump is either a butterfly disguised as President or a truly smart politician disguised as a butterfly. The tragedy is that the rest of us have to live with the consequences.

This week, after humiliating Mexico and reversing his position on Nato, Trump and his advisers have switched to stoking a currency fire, accusing China and Japan of manipulating their currency and even suggesting that Berlin is exploiting a “gross undervalued” euro.

Whatever you think of Trump, he was smart enough to appoint someone like Steve Bannon as his chief strategist. You always can judge a leader by the people he or she surrounds himself with. Steve Bannon is pure American success story – Harvard trained, ex-Goldman Sachs, ex-navy, and founding entrepreneur of Breitbart news, a platform that claims to represent the alt-right and third most influential news channel after Bloomberg and Reuters.

In a remarkable 2014 speech (https://www.buzzfeed.com/lesterfeder/this-is-how-steve-bannon-sees-the-entire-world), Bannon claimed that (this) … “is a crisis both of our church, a crisis of our faith, a crisis of the West, a crisis of capitalism.”

Taken on its own, there is nothing wrong with someone having a view of the world in crisis. But Bannon is now in a pivotal position to do something about it.

The dollar has maintained its position as a global standard because it is convenient, cheap to use and a store of value that has so far been subject to minimal political interference.

The rest of the world is now stuck with a “damned if we do, and damned if we don’t” dilemma. If we continue to rely on the dollar, how do we avoid being accused as manipulators, when in reality, so far the market forces are stronger than any central bank on its own? If we don’t rely on the dollar, we will anyway be accused as manipulators, particularly if the currency depreciates against the dollar.

In other words, what is at stake is not a crisis of the West or its faith (which the Rest cannot change), but a crisis of faith within the Rest on the leadership in the West. The dollar remains the anchor of global stability, but when the solo anchor itself is adrift, we need to find alternative anchors. Single anchors are efficient but dangerous if they wobble. We need two or three anchors to triangulate global stability.

Here is another inconvenient truth – it’s Trump’s dollar, but the Rest’s savings. Based on the US Bureau of Economic Analysis, the US has net global liabilities of US$7.8 trillion or 41.7% of GDP at the end of the third quarter 2016. This has deteriorated from US$2.5 trillion or 16.8% of GDP at the end of 2010. The cumulative current account deficit (from trade) between end 2010-2016 Q3 was only US$2 trillion, which meant that the rest (US$3.3 trillion) was due to valuation changes (change in US dollar exchange rate) or financial account flows.

In other words, it is capital flows rather than trade that is the major driver of the exchange rate, with interest rate differentials influencing also the exchange rate.

If that is the case, going forward, the US net debt position will depend largely on the future global savers, mostly Europe and Asia. And if the savers are subject to constant lecturing by the Trump Administration, an alt-dollar solution will have to be found.

During the Asian financial crisis, Europe sided with the US to reject an Asian Monetary Fund in a move against regionalisation. But if today, the America First strategy is designed at isolating the Rest, then the Rest must unite to protect global trade and investments. If the non-dollar zone can maintain currency stability against the dollar, then there will be less accusations of currency manipulation, forcing the debate into how the US can restore its own fiscal and trade balance to maintain its own savings equilibrium.

In short, the Rest needs to remind the US that she is important, but cannot blame the Rest for all her own problems.

The reserve currency central banks have a major role to ensure currency stability, which can be only preserved by ensuring liquidity and discipline. So far, the Fed has shown responsible leadership, with strong support from the European Central Bank, Bank of England, Bank of Japan and the People’s Bank. But if the dollar is being politicised, then alternatives can and should be found.

All options are now on the table. If the US is no longer dependent on oil and energy, then oil and energy suppliers can price oil trade in currencies other than the dollar. We have seen this before in the competition between different technology standards. The leading standard becomes dominant because it is willing to provide public goods (lots of freebies). But when the dominant standard becomes predatory or extractive in using its monopoly position, then it is time to use alternative standards.

No one should take their position or customers from granted. The Rest will not stand still whilst Trump and his cohorts decide to change allies and foes by the tweet. None of us are against the dollar but for global stability, common sense and mutual respect. The euro, sterling, yen, yuan and SDR’s time has come.

Andrew Sheng writes on global issues from an Asian perspective.

By Andrew Sheng

Year of living dangerously

 

Rash move: The effectiveness of Trump’s executive order banning citizens of seven countries from entering the US is highly questionable. — AFP

What Trump is doing – and he may not even realise it with his defiant-style leadership – is making the US a much more dangerous place to live in now, not a safer place as he had hoped.

WHEN the world’s most powerful man conducts diplomacy over Twitter, keeping his words to 140 characters, we’d better prepare ourselves for trouble.

And indeed, since Donald Trump took over as President of the United States, there has been a series of totally unpredictable and unconventional decisions made, some mind boggling, even bordering on insanity.

And it has just been a little over two weeks since he moved into the White House.

There is no question that many Americans are troubled by a possible mass influx of refugees from the Middle East and Africa.

This does not involve just the US but also affects several parts of Europe, including Britain, France and Germany, which explains why politicians who play the right-wing card – with the anti-immigrant agenda – are winning.

Trump clearly understands the pulse of the average American, especially those in the rural mid-west, the US heartland.

These are folks who watch conservative Fox TV and whose interaction with people of other races, religions and cultures is limited.

They are not like the liberal city folks of New York or Los Angeles, who turn up at airports and train stations, waving placards and hugging Syrian refugees, as shown on international TV news.

It is probably a different story in Montana, Nebraska, Arkansas or South Carolina but we do not hear the voices of these rural folks on CNN.

Trump won simply because he understood the fears of the average American well. He has continued to play the Islamophobia card because he knows his fearmongering works.

It doesn’t help that most of these refugees want to go to the US or Britain and not the Muslim-majority nations of the Middle East. The question remains if these Arab countries are even offering places to the refugees or do the refugees themselves prefer Western secular and democratic values.

Nationalist politicians have already whipped up anger, pointing out that if these Middle East refugees hate Western culture so much and refuse to assimilate, then why should they be let in.

But Trump’s executive order banning the citizens of seven countries from entering the US, supposedly to protect the nation from “radical Islamic terrorists”, is highly questionable, especially its effectiveness.

The president has signed the order temporarily suspending the entry of people from Iraq, Syria, Sudan, Iran, Somalia, Libya and Yemen into the US for at least 90 days.

This is odd because if we wish to identify terrorism acts, then surely there’s a high number of terrorists from Egypt, Turkey, Saudi Arabia, Pakistan, the United Arab Emirates, Indonesia and Afghanistan. Why were these countries not on the list?

Obviously, Trump did not want to offend US allies, especially Saudi Arabia and Pakistan. Despite the US’ constant lecture on democracy, we all know these two countries are often “spared”, despite their horrifically poor human rights record because they are strategically important to the US. We also should not forget that at one time, the vital oil supply was from Saudi Arabia.

The fact is that in the past four decades, 3,024 people have been killed by foreign terrorists on US soil.

The reality is that the Sept 11 attacks, perpetrated by citizens of Saudi Arabia, the UAE, Egypt and Lebanon, account for 98.6% of those deaths – 15 of the 19 Sept 11 hijackers once called Saudi Arabia home.

In fact, over that period, no American has been killed on US soil by anyone from the nations named in the present president’s executive order.

The San Bernardino massacre, in which 14 people were killed and 22 injured in 2015 was carried out by Syed Rizwan Farook, who is of Pakistani descent, and his wife Tashfeen Malik, who grew up in Saudi Arabia.

The Pulse nightclub attack in Orlando, where 49 died and 53 were injured last year, was carried out by Omar Mateen, a US citizen of Afghan descent.

The Boston Marathon bombing in 2013 was orchestrated by the Tsarnaev brothers, both of whom were Russian, killing three and injuring several hundred people.

But as the world jumped on Trump, news reports have emerged that Kuwait does the same.

Syrians, Iraqis, Iranians, Pakistanis and Afghans have reportedly not been able to obtain tourism or trade visas to Kuwait since 2011.

Passport holders from the countries are not allowed to enter the Gulf state while the blanket ban is in place, and have been told not to apply for visas, it has been reported.

Likewise, the ban on citizens from fellow Muslim-majority nations has failed to prevent Kuwait from being targeted in a number of terrorist attacks over the past two years – including the bombing of a mosque in 2015 which left 27 Kuwaitis dead.

Kuwait is the only country in the world to officially bar entry to Syrians, until the US named Syria among the seven countries whose citizens were banned from entering its borders.

What Trump is doing – and he may not even realise it with his defiant-style of leadership – is making the US a much more dangerous place to live in now, not a safer place as he had hoped.

There will be homegrown terrorists, including Americans – and even radicals entering the US holding other passports – who plan to carry out their crazy acts.

He has also made the work and lives of career diplomats more difficult with his brazen diplomacy. It came as no surprise that 900 State Department diplomats signed a memo to oppose his ban.

According to CNN, the “memo of dissent” warned that not only will the new immigration policy not keep America safe but it will harm efforts to prevent terrorist attacks.

The ban “will not achieve its stated aim of protecting the American people from terrorist attacks by foreign nationals admitted to the United States,” the memo reportedly noted.

Trump has actually provided oxygen to the radicals, who will now thump the noses of moderates in Muslim countries.

There should be no surprises if the recalcitrant Trump expands his list of countries whose citizens would be banned from entering the US.

It won’t be wrong to suggest that 2017 will be a Year of Living Dangerously under Trump. Let’s be prepared for the unexpected from him.

Source: On the beat Wong Chun Wai The Star

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The Zika virus spreading to Malaysia and Singapore


Zika virus was first identified in Uganda in 1947 in rhesus monkeys by researchers monitoring yellow fever. The virus got its name from the Zika Forest in Uganda where it was first discovered. It is classified as a flavivirus, which puts it in the same family as yellow fever, West Nile, Japanese encephalitis viruses and dengue. According to the Brazilian Ministry of Health, Brazil saw 20 times more microcephaly cases in 2015 than usual, following the outbreak of Zika in the country that year.

https://www.youtube-nocookie.com/embed/H5IbCDebdBM

The Zika virus, explained 

 https://www.youtube-nocookie.com/embed/OILBAbva6QA


First Zika patient getting better

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Video: http://www.thestar.com.my/news/nation/2016/09/02/first-zika-patient-getting-better-doc-womans-last-blood-test-turned-out-negative-but-we-will-retest/

The first Zika patient in the country is recuperating well at the Sungai Buloh Hospital.

The hospital’s infectious disease head Datuk Dr Christopher Lee said the symptoms that the 58-year-old woman suffered from, including rashes, had also cleared up.

“We will be doing a blood test on her today and if it turns out to be negative, we can let her go home in a few days’ time,” he said yesterday.

He said her mild rashes cleared up in two or three days and the last blood test was negative but the hospital decided to keep her for a little longer just to ensure there would be no transmission to other people.

The blood test today was to reconfirm that she was free of Zika, he said.

The woman and her husband had visited their daughter in Singapore on Aug 19 and returned on Aug 21.

A week later, the woman developed rashes and fever, and sought medical attention at a private clinic in Klang.

She was referred to the Sungai Buloh Hospital, and on Aug 31, her urine sample tested positive for the Zika virus.

Her daughter, who works and lives in Paya Lebar, Singapore, has also been infected.

The woman’s husband and other family members who lived in the same house in Ambang Botanic have yet to show any symptoms of the infection.

Dr Lee said the most common symptoms of Zika were fever, body aches, rashes and red eyes which would normally clear up within a few days.

He said that if a woman was infected by Zika, the vaginal fluids might contain the virus for up to two months after she had recovered.

“So, if she has sex with a man within the two months, the man can be infected with Zika.

“The virus can also stay in a man’s semen for up to six months after he has recovered.”

Infected pregnant women face the risk of delivering a child with microcephaly, while others might suffer from Guillain-Barre syndrome, a neurological condition.

According to the American National Institute of Neurological Disorder’s fact sheet, Guillain-Barre syndrome is a disorder in which the body’s immune system attacks part of the peripheral nervous system.

These symptoms can increase in intensity until certain muscles cannot be used at all and, when severe, the person is almost totally paralysed.

Dr Lee recommended that pregnant women who have travelled to affected countries like Brazil and Singapore go for check-ups at nearby hospitals.

By Loh foon fong, wani muthiah, joseph kaos, tho xin yi, shazni ong, christopher tan, neville spykerman, dina murad, victoria brown, mohd farhaan shah, norbaiti phaharoradzi, nabila ahmad, rebecca rajaendram, edward rajendra The Star/ANN

Take precautions when in Singapore 

 

Personal measure: Bus passenger Naizatul Takiah Ali, 21, spraying mosquito repellent on herself at the Larkin bus terminal in Johor Baru.

It is unrealistic to stop Malaysians from travelling to Singapore, but people must take precautions against mosquito bites, says Health Minister Datuk Seri Dr S. Subramaniam.

There are about 200,000 Malaysians working in Singapore, with some travelling to and fro on a daily basis, so it would be difficult to block people from going to the republic, he said.

“We have to be realistic. The more practical way to prevent the spread of the Zika virus is to take precautions against mosquito bites.

“Apply an adequate amount of mosquito repellent and wear long-sleeved shirts and long pants to avoid being bitten.

“If you can avoid visiting Singapore, then avoid.

“But this is only voluntary and not an instruction from Malaysia. Malaysians visiting the republic should take preventive measures against mosquito bites,” he said at a press conference here yesterday.

He said Malaysians who have visited Singapore and have symptoms of the virus such as fever and rashes should seek immediate attention.

Dr Subramaniam also said vehicles coming into Malaysia from Singapore, especially buses, would be sprayed with insecticide as an additional measure.

“We know this does not prevent the spread of the virus 100%, but is an additional precautionary measure on top of other methods that we have carried out throughout the country,” he added.

The minister also said pregnant women or those planning to have a child should seek advice from their doctors, as there has been a reported link between the Zika virus with microcephaly, which causes deformity in babies.

Those who are infected should abstain from having sex, or use protection, as the virus can be spread through sexual activities.

“The virus can stay in an infected man’s body for six months and for two months inside a woman’s body,” he said.

Singapore battling outbreak of Zika virus

https://www.youtube-nocookie.com/embed/WR4Fh3GanhI

Foreigners account for half of Singapore cases

SINGAPORE: Half of the Zika cases in Singapore are foreigners who live or work here, and six of them are Malaysians.

According to a report in TODAYonline.com which quoted the Singapore Ministry of Health, the news portal said that out of 115 cases, 57 are foreigners.

The largest group is 23 people from China, followed by 15 from India and 10 from Bangladesh.

Six cases are Malaysians, and one case each from Indonesia, Myanmar and Taiwan.

“All had mild illnesses. Most have recovered while the rest are recovering well,” a ministry spokesperson was quoted as saying.

On Saturday, it was reported that a Malaysian woman is believed to be the first patient infected by locally-transmitted Zika virus in Singapore.

As the 47-year-old had not travelled to Zika-affected areas recently, she was likely to have been infected in the republic. She resides at Block 102, Aljunied Crescent and works in Singapore. — Bernama

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Money, culture and the chase for Olympic gold


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Although some countries offer financial incentives to its athletes, a genuine sporting culture may be the best guarantee of success at the Games.

SHOCK and awe just about sums up the stunning achievement of young Singaporean swimmer Joseph Schooling at the Rio Olympics.

His victory is classic David beating Goliath; he was the underdog from a tiny country that had never won an Olympic gold.

What made it all the sweeter and remarkable is that Schooling beat the mightiest, most decorated Olympian in history – American Michael Phelps who has won 23 gold medals – and set an impressive new record of 50.39 secs for the 100m butterfly event.

When news of Singapore’s first gold medal broke, it quickly overtook other stories emanating from Rio and became the talk of the world.

It eclipsed its Asean neighbours’ own Olympic gold successes: Vietnam’s shooter Hoang Xuan Vinh in the 10m air pistol competition and Thailand’s weightlifters Sopita Tanasan and Sukanya Srisurat in their individual weight classes and certainly overshadowed Malaysian diving duo Pandelela Rinong and Cheong Jun Hoong’s silver in the women’s synchronised 10m platform diving.

All are no small feats but there is a total of 28 sports in the Games, not counting those with multiple disciplines, and the most popular ones for a global audience are gymnastics, track and field and swimming, according to topendsports.com.

Among Asian nations competing in the Games, China and Japan are traditionally strong contenders in gymnastics and swimming although the Chinese gymnasts seem to be doing poorly this time around.

For most other Asian competitors, the sports they excel in tend to be the ones with less mass appeal like archery, shooting, judo, badminton and for some strange reason, women’s weightlifting.

Apart from the Thais, Taiwanese, Filipina and Indonesian female weightlifters have also won medals for their countries.

China remains the sporting powerhouse of Asia, sending its largest delegation of 416 athletes to Rio this year, but they have failed to defend their gold medals in sports they used to dominate like badminton and diving.

As for the glamorous track and field events, there doesn’t seem to be any Asian athlete who can challenge the likes of Usain Bolt.

Meanwhile, the other Asian powerhouse, India, with the second largest population in the world, has never done well at the Olympics, which has been the subject of intense debate among Indian and foreign sports pundits.

India also sent its biggest ever contingent of 118 sportsmen and women, and has so far won only a bronze medal in wrestling.

Winning an Olympic gold medal is the Holy Grail of sports.

The pomp that surrounds the Games gives the gold medallists unparalleled honour and prestige. And the nations they represent go into collective convulsions of ecstasy and nationalistic joy, which make their governments equally happy.

That’s why many nations pour millions into sports programmes to nurture and train promising talents and offer great financial rewards to successful Olympians.

Schooling will get S$1mil (RM3mil) from the Singapore government for his gold medal. Vietnam’s Hoang reportedly will receive US$100,000 (RM400,000), a figure, according to AFP, that is nearly 50 times greater than the country’s average national income, of around US$2,100 (RM8,400).

Malaysia, which is seeing its best ever performance in Rio, thanks to its badminton players and divers, rewards its successful athletes handsomely under its National Sports Council incentive scheme.

An Olympic gold medal winner will receive RM1mil and a monthly pension of RM5,000; a silver medallist, RM600,000 and a RM3,000 pension while a bronze winner gets RM100,000 and a RM2,000 pension.

Taiwan, India, Indonesia, the Philippines, South Korea and Thailand have similar monetary reward schemes. North Korea uses a carrot and stick scheme: huge rewards for medal winners and hard labour for the failed ones.

Several western countries have the same financial bait, including the United States, France, Russia and Germany, but at a lower rate.

Does it work?

The Technology Policy Institute looked for a correlation and was mindful of variables like country size and income, “since those are surely the biggest predictor of how many medals a country will win: more populous countries are more likely to have that rare human who is physically built and mentally able to become an Olympic athlete, while richer countries are more likely to be able to invest in training those people.”

The researchers found no correlation between monetary payments and medals and said it was not surprising in some countries. In the United States, for example, a US$25,000 (RM100,000) cash award would be dwarfed by million-dollar endorsements the athlete could get.

The researchers also set out to see if the results were different for countries with lower opportunities for endorsements. Their conclusion: “overall the evidence suggests that these payments don’t increase the medal count” either.

Rather, countries that do well are those with a longstanding sporting culture that values and nurtures their athletes long before they qualify for the Olympics.

That is evident in Western societies where sportsmen, even at the college level, are feted and idolised. In Asia, however, the emphasis is more on book-learning and earning prestigious degrees.

The BBC quotes Indian Olympic Association head Narayana Ramachandran as saying India’s sorry performance is more than just a shortage of cash or organisation.

“Sport has always taken a back seat vis-á-vis education. Most Indian families would prefer their children became dentists or accountants than Olympians,” he says.

But that attitude is surely changing as more Asian sportsmen and women go professional and are able to make a good living.

In Malaysia, its most popular sportsman, badminton star Datuk Lee Chong Wei, is highly successful with a number of endorsements under his belt.

For now, it is still the Western countries that dominate the Olympic medal tally table. But it’s only a matter of time before more Asian nations, once no-hopers at the Games, rise up the charts.

It’s already started. The Rio Games will go down in history as a watershed for Asean, with two member states – Singapore and Vietnam – winning their first gold medals. May it be so for Malaysia, too.

By June H.L Wong Chief Operating Officer (Content Development) The Star, Malaysia.

The writer was the former group chief editor of The Star Media Group Malaysia. This is the eighth article in a series of columns on global affairs written by top editors from members of the Asia News Network and published in newspapers across the region.

Heartbreak again for Chong Wei, Chen Long takes gold

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RIO DE JANEIRO: Lee Chong Wei, the king of Malaysian badminton, will leave the Rio de Janeiro Olympics without the crown – and so will Malaysia without the coveted gold.

The 33-year-old lost his third Olympic final after going down 18-21, 18-21 to Chen Long at the Riocentro Pavilion 4 on Saturday.

It was indeed a painful end for Malaysia as it was the third false dawn. Earlier, Malaysia had also lost in the men’s doubles and mixed doubles finals.

Malaysia thus will return home with a total of four silvers and one bronze.

The other three silvers came from Chan Peng Soon-Goh Liu Ying (mixed doubles), Goh V Shem-Tan Wee Kiong (men’s doubles) and divers Pandelela Rinong-Cheong Jun Hoong (women’s 10m platform synchro). Cyclist Azizulhasni Awang contributed the sole bronze through the men’s keirin.

Both Chong Wei, playing in probably his last Olympics, and Chen Long went onto the court to loud cheers from their countries’ supporters.

Chong Wei, who lost to Lin Dan at the 2008 Beijing and 2012 London finals, looked tentative in the beginning to allow Chen Long to open up a 4-0 lead. But he recovered his composure to lead 5-4.

After that, they traded point until it was 7-7 before Chong Wei pulled away for an 11-7 and then 14-10 lead.

But Chen Long refused to go away and managed to level at 14-14.

Twice Chong Wei surged in front but Chen Long capitalised on the Malaysian’s mistakes at the net to lead 20-17. Although world No. 1 Chong Wei managed to save one match point, his failure to return a smash gave Chen Long a 21-18 win in 35 minutes.

Oozing confidence, Chen Long was always in front in the second game – leading 4-1 and 5-2.

But Chong Wei fought back to go 8-5 up. Chen Long then went on a smashing spree, winning six points for an 11-8 advantage.

The 27-year-old world No. 2 never looked back after that as he always had at least a three-point lead.

Everything looked lost for Chong Wei as Chen Long reached 20-16. The Malaysian saved two match points but then sent the shuttle out to lose 18-21 in 38 minutes.

For Chen Long, it was his first Olympic gold to add to his two All-England and World Championships crowns.

Chong Wei can only look in envy as he’s still without a world or Olympic crown. He also lost in three World Championships finals.

Chen Long’s gold was only China’s second at these Games after Fu Haifeng-Zhang Nan triumphed in the men’s doubles.

Earlier, two-time Olympic champion Lin Dan fell from grace in probably his last Olympic outing after losing 21-15, 10-21, 17-21 to Dane Viktor Axelson in the 70-minute bronze medal playoff.

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Japan’s denial of past military aggression undermines world peace; intervention in SCS perverse, vicious


https://www.youtube-nocookie.com/embed/p57piVGcVqg

August 15 marked the 71st anniversary of Japan’s unconditional surrender during World War II. However, on this special day when Japan should spend time reflecting on its history of militaristic aggression, its Prime Minister Shinzo Abe sent a ritual offering to the notorious Yasukuni Shrine.

The Yasukuni Shrine, which honors 14 Class-A convicted war criminals among 2.5 million Japanese war dead from WWII, is regarded as a symbol of past Japanese militarism.

The honoring of war criminals, no matter what form it takes, only serves to further hurt those Asian neighbors that Japan once invaded. Such perverse acts to whitewash its crimes of military aggression runs contrary to the pursuit of peace in Asia and the world at large.

It’s common knowledge that the Yasukuni Shrine is a source of spiritual inspiration for Japan to start another war of aggression. Yet, the country’s new Defense Minister Tomomi Inada has tried to associate such a notorious place with the mourning of soldiers belonging to Japan’s Self-Defense Forces.

She claimed at a recent seminar that “the Yasukuni Shirine is not the place to vow not to fight. It needs to become a place where we vow to desperately fight when our Motherland is at risk.” Her words shocked even the Kyodo News.

The 71-year-peace after WWII was hard-won. Born from the victory over fascism, this peace has been the foundation for post-war international order. This conclusion is not something that can be ignored, denied or overturned by any country.

World peace and the post-war order, which came at the cost of the blood and lives of the peoples of Allied countries, is closely tied to justice.

Last year, the world commemorated the 70th anniversary of the end of the World Anti-Fascist War, but some countries, looking out for their own interests, have turned a blind eye to the wrongdoings of Japan and have even urged Japan to abandon its pacifist constitution. The world today is witnessing the negative impact brought about by this short-sighted strategy.

By erasing its invasion history, Japan is on one hand attempting to lock away memories of the war and on the other hand setting the stage for future action. In the House of Councillors election in July, lawmakers pushing for Constitution amendments won more than two-thirds of seats. This has led to forward-thinking people in Japan to also begin worrying about the “return of war.”

In order to strengthen military power and shake off the post-war order, the Abe administration usually uses the so-called “China threat” as an excuse to deceive the Japanese public and other parts of the world.

After Japan adopted its new security laws that lifted a decades-old ban on collective self-defense, the Abe administration has been making every effort to contain China by instigating disputes between China and other countries.

On the day when the so-called arbitral decision on the South China Sea dispute was announced in July, Japan, a non-party in the issue, immediately pressured China to accept the arbitration. At the following 11th Asia-Europe Summit and foreign ministers’ meetings on East-Asia cooperation held in last month, Japan reiterated its stance again and again.

In the country’s annual defense white paper issued in early August, Japan pointed fingers at China over the South China Sea issue once again. The paper also made irresponsible remarks concerning China’s armament, military expense and transparency. These actions by the Abe administration has triggered alarm and concern throughout the international community.

Japan’s tribute at the Yasukuni Shrine on Monday once again reminds us that world peace is not that should be taken for granted, it demands continual justice and also the capability to defend it.- People’s Daily

Japan’s intervention in South China Sea perverse, vicious: expert

Japan’s efforts to muddle the waters of the South China Sea are perverse acts that turn back the wheel of history, a Chinese expert wrote on Monday in an article that marked the 71st anniversary of Japan’s unconditional surrender in World War II and called on the public to ponder Japan’s real intentions.

In the People’s Daily article, Hu Dekun, the president of China Association for History of WWII, pointed out that the war of aggression initiated by Japanese fascists during the 1930s and 1940s had brought tremendous disaster to people both in China and the Asia-Pacific region.

As an assailant country, Japan should be held accountable for its war crimes. However, in order to cement its global hegemony, the US, who then exclusively occupied Japanese territory, allied with the latter in the hopes of dominating the Asia-Pacific order.

But instead of repenting for its war crimes and improving ties with the victimized countries, Japanese right-wing politicians started bullying other countries under the support of the US, read the article, titled “Perverse Acts of Japanese Government.”

Things got worse after the US adopted its “Asia-Pacific Rebalance” policy, Hu writes, citing the South China Sea issue as an example.

Hu noted that in a bid to contain China, Japan repeatedly instigated disputes between China and other countries around the South China Sea. Japan, a country not involved in the South China Sea issue, joined the US as another agitator in meddling the waters.

According to Hu, Japan is attempting to get rid of the post-war order by amending its constitution.

After Japan officially adopted the new security laws that lifted the decades-old ban on collective self-defense, the country is now planning a constitution amendment. But the biggest roadblock ahead is public support. The Abe administration is seeking that support by playing up the “China threat.”

What’s more, Tokyo hopes divert public’s attention from other domestic issues. The Abe administration has lost credibility after “Abenomics” failed to revive the Japan’s sluggish economy. By fanning the flames of the South China Sea issue, the administration hopes to route domestic conflicts and consolidate its power.

By poking its nose in the South China Sea, Japan wishes to buddy up to the US. Though the US tried to manipulate some counties to challenge China, its “Asia-Pacific Rebalance” policy suffered serious setbacks by China’s diplomacy, friendships and policy of win-win cooperation, especially as the “Belt and Road” initiative aims to benefit most of its neighboring countries. Japan wants to take this chance to curb China so that it could pander to its alliance with the US.

“What’s Japan’s real intention for interfering in the South China Sea issue? Is Japan going to repeat its mistakes? ”asked Hu. – People’s Daily

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Stay vigilant to Japan’s “China Threat”, right-wing ‘hawk’ Inada as new defense minister


Once again, in its latest defense white paper, Japan has shamelessly accused China of jeopardizing regional peace and stability, playing up the “China Threat” for its own right-wing agenda.

As the Abe administration moves Japan’s security policy further and further to the right, rebuilding the country as a military power, those neighboring nations who remember the past look on aghast.

The new defense paper adopts an even more confrontational tone compared to previous ones, accusing China of “changing the status quo by relying on its strength” and expressing “deep concern” over China’s activities in the East and South China seas.

If history is indeed a mirror, then surely that mirror reflects Japan’s recent record of stirring up regional trouble and enmity wherever and whenever it can. If there is any meddling with the status quo, it is easy to see that Japan is the meddlesome one.

In 2012, Tokyo stoked up tensions in the East China Sea through the transparent farce of “purchasing” the Diaoyu Islands. Warships and aircraft were dispatched to the islands’ waters and skies, harassing Chinese vessels and aircraft going about their lawful business.

On the South China Sea, Japan — far from an interested party — can’t seem to keep its nose out of the issue, pointing fingers at China and cheerleading for distant parties who also seek to interfere in the dispute.

And then in April, Japan sent warships to the Philippines, perhaps as a direct “thank-you” for the spurious South China Sea arbitration, laying bare its attempts to mount pressure on China.

The Abe administration has tinkered with the stability of the Asia-Pacific and conjured up security threats for no reason other than to justify a move to the right: a militarist move which includes, but is not limited to, easier arms trade, weaker civilian control over the military, and these controversial security bills.

This year’s white paper makes much of the “constitutionality” of Japan’s new security laws – the legal foundation for the right-wing to take control of Japan’s defense.

Japan talks of “concern” and “vigilance” over China’s military development, and has done so in its annual papers since 2005. After new security legislation last year, Japan has taken a more proactive approach, a more aggressive approach, directly condemning and challenging China.

Abe and his coalition partners are clearly speeding up their attempts to rewrite the constitution before his tenure ends in 2018. Laws allowing Japan to engage in armed conflict overseas, even if Japan is not attacked or threatened, came into effect in March. The Abe administration is inching closer to its dream of replacing the country’s pacifist constitution with… a different kind of constitution.

The fanciful “China Threat” and tensions in the region are the best excuses for aggressive military and security polices that Tokyo can cook up.

Seven decades after World War II, Japan now stands at a critical juncture: to continue on its peaceful path or to return to militarism with all the fears and tensions that will bring to the region.

Each and every responsible member of the international community must stay vigilant. This peace and stability was hard-won. Its loss will be harder still. – Xinhua

Abe appoints ultra-right wing “hawk” Inada as new DM to push military agenda

https://www.youtube-nocookie.com/embed/X0kSBfF7XS4

Her comment that Japan’s actions during the war “depends on one’s point of view” has sparked anger from neighboring South Korea and China.

Japan’s new Defense Minister, Tomomi Inada, inspects a honor guard on her first day at the Defense Ministry in Tokyo, Aug. 4, 2016.

TOKYO, Aug. 3 (Xinhua) — Japanese Prime Minister Shinzo Abe‘s appointment of Tomomi Inada as defense minister following a cabinet reshuffle on Wednesday has underscored his intentions to forge ahead with a controversial push to amend the nation’s pacifist Constitution and further expand the scope of the nation’s military, observers here have said.

The prime minister, nevertheless, has maintained that the reshuffle was aimed at speeding up the pace of the nation’s sluggish economic revival, following multiple failed installments of his “Abenomics” economic policy mix, following the approval a day earlier of a 28.1 trillion yen (277.74 billion U.S. dollar) stimulus package.

However, political observers attest that the hawkish Inada, 57, a particularly close ally of Abe’s, yet a novice when it comes to security issues, being given the defense minister’s portfolio demonstrates the prime minister’s intention to use his coalition’s newly-gained dominance in both chambers of parliament to advance his legacy-led mission to fundamentally reshape Japan’s security paradigm in the biggest, most controversial shift since WWII.

Security experts as well as senior members within the defense ministry itself believe that Inada, Japan’s second female defense minister following Yuriko Koike, herself recently elected to be Tokyo governor who held the position briefly in 2007, is ill-equipped and lacks the necessary experience to hold the defense ministry’s top post.

Inada is currently only serving her fourth term as a lower house lawmaker and previously held the post of state minister in charge of administrative reform for just two years and has chaired the ruling Liberal Democratic Party Policy Research Council again for just two years.

Defense, security and military affairs are not in her repertoire, experts close to the matter have maintained.

Inada, however, is known to share the prime minister’s singular goal of revising Japan’s postwar, pacifist constitution and is also, along with Abe and a number of other prominent cabinet members, a visible member of the ultra-right wing Nippon Kaigi fraternity.

“Inada has long been a member of Abe’s inner coterie and shares his fundamental beliefs about the future course of the nation’s political and security direction,” Asian affairs commentator Kaoru Imori told Xinhua, ahead of Inada’s widely-expected appointment.

“She is also a known right-wing revisionist and has made a number of controversial remarks about Japan’s history, and her membership to the right wing Nippon Kaigi group is evidence of her tendentious political and nationalistic views,” Imori added.

Nippon Kaigi is an ultranationalistic nonparty entity with around 300,000 members who all believe in praising the Imperial family (The Emperor), changing the war-renouncing, pacifist Constitution, promoting nationalistic education in schools and supporting parliamentarians’ visits to the controversial Yasukuni Shrine.

It is the biggest right-wing organization in Japan and Abe has, ostensibly, cherry picked his Cabinet members from this group to run the country, with these “Shinto Conservatives” believing that Japan should not apologize for its wartime acts of brutality, despite the legitimacy of proven historical events.

The appointment of Inada as defense minister will almost certainly ruffle the feathers of Japan’s neighbors, experts claim. “The mood now is to try to promote cooperation,” Jeffrey Kingston, director of Asian studies at Temple University in Tokyo, was quoted as saying of the current situation regarding ties between Japan and its immediate neighbors.

“That could change if she makes a pilgrimage to Yasukuni in a couple of weeks,” Kingston added.

“Inada supports the prime minister and all parliamentarians’ visits to Yasukuni (shrine) and has openly contested The International Military Tribunal for the Far East after World War II. She also believes that Japan should not apologize for its internationally-recognized war crimes committed and is a proponent of denying Japan’s wartime atrocities,” Imori said.

To this end, Abe appointed her chairperson of the LDP Policy Research Council in September 2014, despite the fact that the position is almost always exclusively held by party members who have had lengthy political careers. – Xinhuanet

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Why do Chinese think differently from the West?


Sculptures of Confucius with his students are seen near the headquarters office building of Chambroad Holding in Boxing, Shandong Province, China, June 27.PHOTO: REUTERS

We live in an age of science and technology, so strictly speaking science should be able to forecast the future and help us make decisions better. But in this Age of Uncertainty, the best economic models did not predict the global financial crisis.

How did the ancients attempt to make better decisions? They relied on history, their own experience or oracles, astrology or mumbo-jumbo. In a situation of uncertainty, you make decisions on the basis of information that you have, and if don’t have that information, you simply have to consult someone or something you believe in.

Some people turn to old sacred text, such as the Bible, with a priest to interpret what God intends. The Greeks used the Delphic Oracle, dating back to 1,400 BC, whose predictions were in riddles that were interpreted by the female diviners. Divination was then serious business, with astronomers studying the stars for some cosmic order.

Most people think that Chinese philosophy began with Confucius [551-479 BC], but his school became famous because it compiled the existing ancient books into the Five Classics, of which the I Ching (or Book of Change) is one. The problem with any translation of ancient text is that we can never differentiate translations from interpretation. How an ancient text is read depends very much upon the translators’ biases or ignorance. This is why reading of sacred text is always personal.

My own view is that the I Ching deserves to be considered a book of early Chinese science, rather than as a book on divination, considered at best as pseudo-science.

The I Ching comprises two books, an earlier classic dated to roughly 1,000 BC, and an interpretive text written about 400-600 years later. The earlier classic comprises the Eight trigrams, attributed to Fuxi, one of the legendary founders of China, and the 64 hexagrams, reputedly invented by Duke Zhou, one of the founders of the Zhou dynasty. In simple terms, the Eight trigrams simply stand for eight possible situations, from good to bad; whereas the 64 hexagrams stand for 64 possible predictive outcomes. The later text is attributed to Confucius and his disciples, which helps the interpretation of what the hexagrams mean. To use the I Ching for divination or decision purposes, you randomly choose a hexagram and then consult the I Ching for what it means.

Herein lies a fundamental difference in decision making between Western science and the Chinese approach to life.

Science developed in the West partly because of the alphabetic language, derived from the Arabs, which means that you can define words and meaning much more precisely, since the English language comprises today over a million words. As the philosopher Wittgenstein argued, all concepts are defined by language.

The Chinese language, on the other hand, is basically ideogramatic and phonetic, meaning that each character comprises radicals that originally were pictures. For example, the character for man can easily be identified as a drawing of a standing man. Because there are limited sounds for each character, each character carries four or five tones, and complex words comprise combinations of different characters. Most people can read basic Chinese with about two to three thousand characters, with the maximum number of characters being roughly 50,000. Complex words are combinations of two or three characters.

Given limited sounds, tones and characters, the Chinese language is not as precise as English. A single character can have different meanings and different sounds, so that Chinese words and phrases can only be understood in context. So when I hear a Chinese speak, I often have to ask in what context is that particular sound/word being used? In other words, we have to add contextual information in order to interpret the meaning of what is being said.

Western science, following the Aristolean logic, is essentially reductionist and linear, seeking cause and effect. The language enables the conceptualisation to be precise and the logic flow to be consistent. The imprecision inherent in the Chinese language means that conceptual thinking is more organic and fluid, and subject to interpretation, including guessing.

In other words, whilst natural sciences could be more precise in communication between two machines, the communication between two human beings carry a huge amount of uncertainty. The social sciences are much more qualitative because one human being cannot by definition fully comprehend the other person’s life experience, values and preferences. Uncertainty is built into the social sciences.

Modern economics dealt with this problem by assuming perfect information, which actually assumed away uncertainty. Economic models based on such perfect information and rational players (mechanical decision-making) gave rise to precise or “optimal”, first-best outcomes. The first best ideal is then thought to be a natural outcome, and life will simply revert back to equilibrium or a stable situation.

Real life is obviously not so simple. The eight trigrams mean that in binary good and bad or black and white terms, there are eight possible outcomes in any decision: good, bad and six mixtures of good/bad. The 64 hexagrams makes life even more complicated, since black and white are only two possible manifestations of any system, the rest being 62 shades of grey (mixture of black and white).

By definition, any fundamentalist view of life is more likely to be wrong, because life is mostly shades of grey.

The best games that illustrates this difference between Western and Chinese thinking are the games of chess and Go (weiqi). Chess has defined linear moves with six types of pieces. It forces one to think logically and sequentially. Go comprises only black and white pieces, but the player has to think spatially, playing the piece in any position on the board, continually trying to outguess the other player.

Without understanding these fundamental differences in language, context and decision-making under uncertainty, it would be difficult to bridge the yawning gap between both sides of the Pacific. It also means that the Chinese approach to economics and geo-politics will be quite different than is more commonly interpreted outside China.

By Andrew Sheng, Asia News Network

The writer, a Distinguished Fellow with the Asia Global Institute, writes on global issues from an Asian perspective.

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