Here come the robots; your job is at risk


Here come the robots & they are going to take almost all of our jobs…

The new automation revolution is going to disrupt both industry and services, and developing countries need to rethink their development strategies.

A NEWS item caught my eye last week, that Uber has obtained permission in California to test two driverless cars, with human drivers inside to make corrections in case something goes wrong.

Presumably, if the tests go well, Uber will roll out a fleet of cars without drivers in that state. It is already doing that in other states in America.

In Malaysia, some cars can already do automatic parking. Is it a matter of time before Uber, taxis and personal vehicles will all be smart enough to bring us from A to B without our having to do anything ourselves?

But in this application of “artificial intelligence”, in which machines can have human cognitive functions built into them, what will happen to the taxi drivers? The owners of taxis and Uber may make more money but their drivers will most likely lose their jobs.

The driverless car is just one example of the technological revolution taking place that is going to drastically transform the world of work and living.

There is concern that the march of automation tied with digital technology will cause dislocation in many factories and offices, and eventually lead to mass unemployment.

This concern is becoming so pervasive that none other than Bill Gates recently proposed that companies using robots should have to pay taxes on the incomes attributed to the use of robotics, similar to the income tax that employees have to pay.

That proposal has caused an uproar, with mainstream economists like Lawrence Summers, a former United States treasury secretary, condemning it for putting brakes on technological advancement. One of them suggested that the first company to pay taxes for causing automation should be Microsoft.

However, the tax on robots idea is one response to growing fears that the automation revolution will cause uncontrollable disruption and increase the inequalities and job insecurities that have already spurred social and political upheaval in the West, leading to the anti-establishment votes for Brexit and Donald Trump.

Recent studies are showing that deepening use of automation will cause widespread disruption in many sectors and even whole economies. Worse, it is the developing countries that are estimated to lose the most, and this will exacerbate the already great global inequalities.

The risks of job automation to developing countries is estimated to range from 55 to 85%, according to a pioneering study in 2016 by Oxford University’s Martin School and Citi.

Major emerging economies will be at high risk, including China (77%) and India (69%). The risk for Malaysia is estimated at 65-70%. The developed OECD countries’ average risk is only 57%.

From the Oxford-Citi report, “The future is not what it used to be”, one gathers there are at least three reasons why the automation revolution will be particularly disruptive in developing countries.

First, there is “premature deindustrialisation” taking place as manufacturing is becoming less labour-intensive and many developing countries have reached the peak of their manufacturing jobs.

Second, recent developments in robotics and additive manufacturing will enable and could thus lead to relocation of foreign firms back to their home countries.

Seventy per cent of clients surveyed believe automation and 3D printing developments will encourage international companies to move their manufacturing close to home. China, Asean and Latin America have the most to lose from this relocation.

Thirdly, the impact of automation may be more disruptive for developing countries due to lower levels of consumer demand and limited social safety nets.

The report warns that developing countries may even have to rethink their overall development models as the old ones that were successful in generating growth in the past will not work anymore.

Instead of export-led manufacturing growth, developing countries will need to search for new growth models, said the report.

“Service-led growth constitutes one option, but many low-skill services are now becoming equally automatable.”

Another series of reports, by McKinsey Global Institute, found that 49% of present work activities can be automated with currently demonstrated technology, and this translates into US$15.8tril in wages and 1.1 billion jobs globally.

About 60% of all occupations could see 30% or more of their activities automated. But more reassuringly, an author of the report, James Manyika, says the changes will take decades.

Which jobs are most susceptible? The McKinsey study lists accommodations and food services as the most vulnerable sector in the US, followed by manufacturing and retail business.

In accommodations and food, 73% of activities workers perform can be automated, including preparing, cooking or serving food, cleaning food-preparation areas and collecting dirty dishes.

In manufacturing, 59% of all activities can be automated, including packaging, loading, welding and maintaining equipment.

For retailing, 53% of activities are automatable. They include stock management, maintaining sales records, gathering customer and product information, and accounting.

A technology specialist writer and consultant, Shelly Palmer, has also listed elite white-collar jobs that are at risk from robotic technologies.

These include middle managers, commodity salespeople, report writers, journalists, authors and announcers, accountants and bookkeepers, and doctors.

Certainly, the technological trend will improve productivity per worker that remains, and increase the profitability of companies that survive.

But there are adverse effects including loss of jobs and incomes for those who are replaced by the new technologies.

What can be done to slow down automation or at least to cope with its adverse effects?

The Bill Gates proposal to tax robots is one of the most radical. The tax could slow down the technological changes and the funds generated by the tax could be used to mitigate the social effects.

Other proposals, as expected, include training students and present employees to have the new skills needed to work in the new environment.

Overall, however, there is likely to be a significant net loss of employment, and the potential for social discontent is also going to be large.

As for the developing countries, there will have to be much thinking about the implications of the new technologies for their immediate and long-term economic prospects, and a major rethinking of economic and development strategies.

Global Trends by Martin Khor

Martin Khor (director@southcentre.org) is executive director of the South Centre. The views expressed here are entirely his own.
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SINGAPORE: One of Rachel Lau’s strongest childhood memories is the smell of newspaper. Her father, driving her to school each day in Kuala Lumpur, would make his sleepy daughter open the paper, go through stock quotes and do mental math.

“He would be, like, How did KLK do today? OK, if it’s up four sen and I’ve got 89,000 shares, how much did I make?” Lau recalled. The daily ritual continued through her teenage years. Her father Lau Boon Ann built his fortune in real estate and by investing in companies like Top Glove Corp Bhd, which became the world’s biggest rubber-glove maker.

Some days, he would stand in front of an empty lot with his young daughter and challenge her to imagine a building there rather than watching the chickens running around.

Lau, now 31, is one of the three millennial co-founders of RHL Ventures, along with Raja Hamzah Abidin, 29, son of prominent Malaysian politician and businessman Datuk Seri Utama Raja Nong Chik Raja Zainal Abidin and Lionel Leong, also 29, the son of property tycoon Tan Sri Leong Hoy Kum.

They set up RHL using the wealth of their families with a plan to attract outside capital and build the firm into South-East Asia’s leading independent investment group.

“We look at South-East Asia and there is no brand that stands out – there is no KKR, there is no Fidelity,” Lau said. “Eventually we want to be a fund house with multiple products. Venture capital is going to be our first step.”

RHL has backed two startups since its debut last year. One is Singapore-based Perx, which has morphed from a retail rewards app to provide corporate clients with data and analysis on consumer behaviour. Lau is a member of Perx’s board, whose chairman is Facebook Inc co-founder Eduardo Saverin.

In January, the firm invested an undisclosed amount in Sidestep, a Los Angeles-based startup that’s also backed by pop-music artists Beyonce and Adele. Sidestep is an app that allows fans to buy concert memorabilia online and either have it shipped to their home or collect it at the show without having to wait in line.

“RHL guys are really smart investors who are taking their family offices to a new play,” said Trevor Thomas who co-founded Cross Culture Ventures – a backer of Sidestep, together with former Lady Gaga manager Troy Carter. “What attracted the founders of Sidestep to RHL was their deep network in South-East Asia.”

A lot of startup founders in the United States want to access the Asian market, said Thomas, but they often overlook the huge South-East Asian markets and only focus on China. “Rachel and the team did a great job of explaining the value of that vision and providing really great access to early-stage US companies,” he said.

In South-East Asia, RHL has positioned itself between early-stage venture capitalists and large institutional investors such as Temasek Holdings Pte. Hamzah said they want to fill a gap in the region for the subsequent rounds of funding – series B, C and D. “We want to play in that space because you get to cherry pick,” he said.

RHL’s strategy is to take a chunk of equity and a board seat in a startup that has earned its stripes operationally for at least a year, and see the company through to an initial public offering.

Summer camp

RHL’s partners represent a new generation of wealthy Asians who are breaking away from the traditional family business to make their own mark. They include billionaire palm-oil tycoon Kuok Khoon Hong’s son Kuok Meng Ru, whose BandLab Technologies is building a music business.

RHL’s story begins in 2003 at a summer camp in Melbourne. During a month of activities such as horse riding and playing the stock market, Lau struck up a friendship with Hamzah, unaware that their parents knew each other well.

Their paths crossed again in London, Sydney, New York and Hong Kong as they went to college and forged careers in finance – Lau at NN Investment Partners and Heitman Investment Management, where she currently helps manage a US$4bil equity fund; and Hamzah at Goldman Sachs Asset Management and Guoco Management Co. Together with their mutual childhood friend Leong, the trio would joke about all returning to Malaysia one day to start a business together.

That day came in 2015 when Hamzah called up Lau in Hong Kong and said: “Yo! I’ve moved back. When are you coming back? You haven’t lied to me for 15 years, have you?”

They decided their common trait was investing.

Hamzah shares Lau’s passion for spotting mispriced assets by analysing valuations. Lau says she trawls through 100-page prospectuses for fun and values strong free cash flow – the cash a company generates from its operations after capital expenditures. Leong helped structure debt products at Hong Leong Investment Bank before joining his family’s real-estate business to learn about allocating capital to strategic projects.

In February 2016, they started RHL Ventures – an acronym for Rachel, Hamzah, Lionel – with their own money. When their families found out about the plan, they were eager to jump in, said Lau. Now they aim to raise US$100mil more from outside investors.

The partners have roped in their family and hedge-fund experts as advisers. “We recognise that we are young and still learning,” Lau said. “There is no point pretending otherwise.”

Leong’s father runs Mah Sing Group, Malaysia’s largest non-government-linked property developer. Hamzah’s father, chairman of mechanical and electrical business Rasma Corp, is a former Federal Territories and Urban Wellbeing Minister. Top Glove chairman Tan Sri Lim Wee Chai is also an adviser, in place of Lau’s father, who died in 2008.

The other two advisers are Marlon Sanchez, Deutsche Bank’s head of global prime finance distribution in Asia-Pacific, and Francesco Barrai, senior vice-president at DE Shaw, a hedge fund with more than US$40bil in investment capital.

RHL added a fourth partner last month, John Ng Pangilinan, a grandson of billionaire property tycoon Ng Teng Fong, who built Far East Organisation Pte and Sino Group.

Ng, 37, has founded some 10 ventures, including Makan Bus, a service that allows tourists to explore off-the-beaten-track eateries in Singapore.

As well as their family fortunes, the four partners bring experience of upbringings in dynasties that valued hard work, tradition and dedication.

Ng recalls his grandfather, Singapore’s richest man when he died in 2010, would always visit a property he was interested in buying with his wife.

After driving around the area, they would sit on a bench and observe it from a distance. Then they would return to the same spot after dark.

“He said to us, ‘What you see during the day can look very different at night,’” Ng said.

Hamzah, whose great-grandfather Mustapha Albakri was the first chairman of Malaysia’s Election Commission, remembers his father’s lessons in frugality – one time in London he refused to buy a £2 (US$2.50) umbrella when it started raining as they had plenty of umbrellas at home.

Leong, scion of Mah Sing Group, grew up listening to tales of how his family business overcame tough times by consolidating and reinventing itself from its roots as a plastic trader. “It made me realise that we have to be focused,” he said.

“So with every deal we do, we have to put in that same energy and tenacity.”

Lau was a competitive gymnast as a child but quit the sport when she failed to win gold at a championship event.

“It’s one thing I regret. In hindsight, I don’t think I should have given up,” said Lau. “The ultimate champion is the person who doesn’t give up.”

One old habit however remains. When Lau picks up a newspaper, she goes straight to the business section. “It’s still the only thing I read,” she said. – Bloomberg/The Star by Yoolim Yee

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Developer has to compensate buyers for delays of projects, Court says


 

 
Take them to task: According to the liquidated damages clause, condo buyers can claim 10 per annum of the purchase price for the delay

KUALA LUMPUR: The Housing Controller has no power to grant an extension of time to developers who delay the completion of housing projects, the High Court has ruled in a landmark judgment.

This means a housing developer has to pay compensation to the affected buyers for delays in the delivery of vacant possession.

High Court (Appellate and Special Powers) judge Justice Hanipah Farikullah also held that the regulation which empowers the Controller to modify terms of the contract of sale was ultra vires the Housing Development, Control and Licensing Act.

The judge said this in allowing an application for judicial review by 71 buyers of the Sri Istana condominiums in Old Klang Road against the Housing Controller and Urban Well-being, Housing and Local Government Minister.

Their lead counsel Datuk Wong Kok Leong told The Star the judge held that the minister’s decision to grant the developer an extension of time to complete the project via a letter dated Nov 17, 2015 was invalid.

In the letter, the minister had granted the developer a 12-month extension to complete the project.

“This means that the Housing Controller has no power to grant an extension of time to housing developers for any delay in completing their projects,” Wong said.

“Now, the developer has to pay the liquidated damages (a pre-determined sum) for late delivery of vacant possession of those condominium units.”

Wong called the decision a landmark judgment as many project developers seek extensions to complete their projects in Malaysia.

“This is a victory for all house buyers. With this ruling, the housing developer can’t just go to the Housing Controller for an extension of time to complete the project in order to avoid paying the liquidated damages to house buyers.

“This is because if an extension of time is allowed, house buyers lose their rights to claim damages for late delivery of vacant possession,” he added.

Wong explained that according to the liquidated damages clause, the condo buyers can claim 10% per annum of the purchase price for the delay.

In their application for judicial review, the condo buyers stated that they wanted to quash the decision allowing BHL Construction Sdn Bhd an extension of time for the delivery of vacant possession from 36 months to 48 months.

They also asked the court for a declaration that Regulation 11(3) was ultra vires of the Housing Development Act (Control and Licensing) Act.

Wong said the judge has ordered the parties to address the issue of costs on the next date for case management.

When contacted, SFC Mohamad Rizal said the judge also allowed a similar application involving another group of condominium buyers involving the same developer and project.

Source: By  m. mageswari, royce tan, thean lee cheng, eugene mahalingam, The Star

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2017 – expect a bumpy year ahead worldwide


This will be a year like no other, as there will be a thunderous clash of policies, economies and politics worldwide. We should prepare for the challenges ahead and not be only spectators.

THE new year has dawned. Everyone agrees 2017 will be very interesting.

It will also be most problematic. From politics to economics and finance, we’ll be on a roller-coaster ride.

With his extreme views and bulldozing style, President-elect Donald Trump is set to create an upheaval, if not revolution, in the United States and the world.

He is installing an oil company chief as the Secretary of State, investment bankers in key finance positions, climate sceptics and anti-environmentalists in environmental and energy agencies and an extreme rightwing internet media mogul as his chief strategist.

US-China relations, the most im­­por­­tant for global stability, could change from big-power co-existen­ce, with a careful combination of competition and cooperation, to outright crisis.

Trump, through his phone call with the Taiwanese president and after, signalled he could withdraw the longstanding US adherence to the One China policy and instead use Taiwan as a negotiating card in overall relations with China. The Chinese perceive this as an extreme provocation.

He has appointed as head of the new National Trade Council an economist known for his many books demonising China, including Death by China: Confronting the Dragon.

Trump seems intent on doing an about-turn on US trade policies. Measures being considered include a 45% duty on Chinese products, extra duties and taxes on American companies located abroad, and even a 10% tariff on all imports.

Thus 2017 will see protectionism rise in the United States, the extent still unknown. That is bad news for many developing countries whose economies have grown on the back of exports and international investments.

Europe in 2017 will also be pre­occupied with its own regional problems. The Brexit shock of 2016 will continue to reverberate and other countries facing elections will be less open to the world and become more inward-looking.

As protectionism, xenophobia and narrow nationalism grow in Western societies, Asian countries should devise development strategies based more on domestic and regional demand and investments.

2017 may be the year when resource-rich China, with its deve­lopment banks and its Belt and Road Initiative, fills in the economic void created by Western trade and investment protectionism.

But this may not be sufficient to prevent a finance shock in many developing countries now beginning to suffer a reversal of capital flowing back to the United States, attracted by the prospect of higher interest rates and economic growth.

In 2017 Malaysia will be among the countries most vulnerable to this, due to the large foreign ownership of local bonds and shares.

As capital flows out and the currency depreciates further, the affected countries’ companies will have to pay more for servicing loans contracted in foreign currencies and imported machinery and parts, while consumers grumble about the rising cost of living.

On the positive side, exporters will earn more in local currency terms and tourism will increase, but this may not be enough to offset the negative effects.

Thus 2017 will not be kind to the economy, business and the pockets of the common man and woman. It might even spark a new financial crisis.

The old year ended with mixed blessings for Palestinians. On one hand, they won a significant victory when the outgoing President Barack Obama allowed the adoption of a United Nations Security Council re­solution condemning Israeli settlements in occupied Palestinian territories by not exercising a veto.

The resolution will spur international actions against the expansion of settlements which have become a big obstacle to peace talks.

On the other hand, the Israeli lea­dership, which responded defiantly with plans for more settlements, will find in Trump a much more sympathetic president. He is appointing a pro-Israel hawk as the US ambassador to Israel.

With Trump also indicating he will tear up the nuclear power deal with Iran, the Middle East will have an even more tumultuous time in 2017.

The commencement of floods in some parts of Malaysia during the holiday season, ironically following days of the taps going dry for millions in the Klang Valley, is a pre­lude to the environment continuing to be a critical issue in 2017.

Unfortunately, low priority is given to the environment. Hundreds of billions of dollars are allocated for highways, railways and urban buildings but only a trickle for conservation and rehabilitation of hills, watersheds, forests, mangroves, coastal areas, biodiversity or for serious climate change actions.

2017 should be the year when priorities change, that when people talk about infrastructure or deve­lopment, they put actions to protect and promote the environment as the first items for allocation of funds.

This new year will also be make-or-break for climate change. The momentum for action painfully built up in recent years will find a roadblock in the United States as the new president dismantles Oba­ma-initiated policies and measures.

But Trump and his team will face resistance domestically, including from state governments and muni­cipalities that have their own climate plans, and from other countries determined to carry on without the United States on board.

Indeed, if 2017 will bring big changes initiated by the new US administration, it will also generate many counter-actions to fill in the void left in the world by a withdrawing United States or to counter its new unsettling actions.

There are opportunities to think through and alternatives and re­forms that are needed on global and national economies, on the environment and on geo-­politics.

Most of the main levers of power and decision-making are still in the hands of a few countries and a few people, but there has also been the emergence of many new centres of economic, environmental and intellectual capabilities and community-based organising.

2017 will be a year in which ideas, policies, economies and politics will clash, thunderously, and we should be prepared for the challenges ahead, not just be spectators.

Global Trends By Martin Khor

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

 

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Trump and China’s bumpy ride begins


Trump’s diplomacy
Hot button: Trump’s unpredictability is making him a big topic in China.— AFP

THE rest of the world will have to fasten its seat belts while the current worrying clash of superpowers China and the United States plays itself out. Although the saga of the underwater drone ended peaceably earlier this week, the drama signalled that the competition between the two has entered a new era. With help from the ubiquitous social media, their diplomatic engagement is taking place in real time swiftly, unpredictably and amid considerable tension.

The inauguration of President Donald Trump on Jan 20 is expected to see US-China ties transformed into a guarded quasi-friendship requiring day-to-day reassessment. The stability that prevailed during the eight years of the Obama administration is unlikely to survive. Trump is given to knee-jerk reactions and ill-considered grandstanding for the sake of quick gain and publicity, as well as for his brash pursuit of the art of the deal, none of which bodes well for US’ relations with Beijing.

Still a month from taking office, Trump has already endangered his country’s long-standing recognition of the One China Policy by accepting a phone call from Taiwanese leader Tsai Ing-wan, a breach of protocol adopted after Washington formally recognised communist China in the early 1970s.

President Barack Obama immediately warned that any shift from this policy would have a serious impact on American dealings with Beijing, an important trading partner and backer of the US economy. Aiming to renegotiate extant overseas deals, Trump does not appear to care, and seems ready to test Chinese mettle on every issue.

China’s regional neighbours are aware that the nature of its relationship with the US increasingly depends on Beijing’s dealings with other countries, including the 10 nations of South-East Asia.

The attitude in the Philippines has radically changed. Whereas Manila traditionally regarded the US as the region’s military guardian, current President Rodrigo Duterte- taking umbrage at perceived American slights-has welcomed Chinese overtures. Thanks to Washington’s tendency to overreach in its authority, perceptions elsewhere are not so different.

Thus, its chief justification for wielding influence here to serve as a stopgap against China assertiveness is on the wane.

The Philippines’ abrupt refusal to be a pawn in either of the major powers games is admirable, even if it comes with risks. With sovereign territory in the South China Sea at stake, Duterte is taking a gamble in realigning with Beijing, but if those two countries can settle their differences amicably and equitably, it will have been worthwhile. The other South-East Asian claimants to maritime territories in dispute are sure to follow suit.

During the Trump presidency, more than at any time before, China has a golden opportunity to show the region and the world that it is rational and responsible in its overseas dealings. With goodwill and a commitment to peace and stability, it can take advantage of America’s loss of credibility over the election of a man who is ignorant of foreign affairs and absent in the spirit of international diplomacy. Patriotism and profit alone guide Trump, and nearly half the American electorate stands by him.

Also to be expected is a cautious realignment among the more developed Asian powers particularly Japan, India and South Korea which might pursue greater mutual cooperation as a safeguard against potential American error and affront under Trump.

No one will be surprised, meanwhile, if President Trump cosies up to Russia. While he and Vladimir Putin deny there is any special bond between them, evidence to the contrary has mounted. But using Russia as a foil against China would be detrimental to American financial and geopolitical interests. And, for Asia, while Russian investment is welcome and valued, Moscow has only a modicum of Beijing’s economic clout.

Sources: The Nation/Asia News Network

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Childcare centre fees set to go up


Child care centre fees will likely increase by 10 per cent next year. — Picture by Zuraneeza Zulkifli

Operators expect 10% hike next year

SUNGAI BULOH: The fees for childcare centres across the country are expected to increase by at least 10% next year, says the Association of Childcare Centres Selangor.

This was due to the revised minimum wage, said association president Mahanom Basri.

“The increase depends on the management of the centre. If the rent, salaries and other expenditures have gone up, it will increase by between 5% and 10%.

“It won’t be a lot, but there will definitely be an increase,” she said here yesterday.

For example, Mahanom said a 10% increase from the RM300 fee per child would result in a new fee of RM330.

Besides the minimum wage, she said childcare centre operators also had to install CCTVs for extra security.

“Quality facilities require money so I hope parents are ready to pay for them,” she added.

The Government introduced the minimum wage policy in 2013.

On July 1, the monthly minimum wage was increased from RM900 to RM1,000 for peninsular Malaysia and from RM800 to RM920 for Sabah, Sarawak and Labuan.

Mahanom, together with more than 300 childcare centre operators, attended a dialogue session with Deputy Women, Family and Community Minister Datin Paduka Chew Mei Fun yesterday.

One of the issues raised during the two-hour closed-door dialogue was the licensing fees charged by local councils.

“We have proposed to the local councils that they could treat childcare centres as community service instead of commercial business.

“By doing so, they can reduce the licensing fees,” Chew said.

She said the ministry was also looking into easing some regulations.

“We will be looking at the ratio; such as how many children should be cared by one minder without compromising on safety.

“Childcare service is important and the demand is big. Many families have both parents working so we need to have a strong childcare service,” she added.

By Nurbaiti Hamdan The Star/Asia News Network

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Goodbye 2016, a strange and difficult year


The year will be remembered for the West ending its romance with globalisation, and its impact on the rest of the world.

JUST a few days before Christmas, it is time again to look back on the year that is about to pass.

What a strange year it has been, and not one we can celebrate!

The top event was Donald Trump’s unexpected victory. It became the biggest sign that the basic framework and values underpinning Western societies since the second world war have undergone a seismic change.

The established order represented by Hillary Clinton was defeated by the tumultuous wave Trump generated with his promise to stop the United States from pandering to other countries so that it could become “great again”.

Early in the year came the Brexit vote shock, taking Britain out of the European Union. It was the initial signal that the liberal order created by the West is now being quite effectively challenged by their own masses.

Openness to immigrants and foreigners is now opposed by citizens in Europe and the US who see them as threats to jobs, national culture and security rather than beneficial additions to the economy and society.

The long-held thesis that openness to trade and foreign investments is best for the economy and underpins political stability is crumbling under the weight of a sceptical public that blames job losses and the shift of industries abroad on ultra-liberal trade and investment agreements and policies.

Thus, 2016 which started with mega trade agreements completed (Trans-Pacific Partnership) or in the pipeline (the Transatlantic Trade and Investment Partnership between the US and Europe) ended with both being dumped by the President Elect, a stunning reversal of the decades-old US position advocating the benefits of the open economy.

2016 will be remembered as the year when the romance in the West with “globalisation” was killed by a public disillusioned and outraged by the inequalities of an economic system tilted in favour of a rich minority, while a sizeable majority feel marginalised and discarded.

In Asia, the dismantling of the globalisation ideal in the Western world was greeted with a mixture of regret, alarm and a sense of opportunity.

Many in this region believe that trade and investment have served several of their countries well. There is fear that the anti-globalisation rebellion in the West will lead to a rapid rise of protectionism that will hit the exports and industries of Asia.

As Trump announced he would pull the US out of the TPP, China stepped into the vacuum vacated by the US and pledged to be among the torchbearers of trade liberalisation in the Asia-Pacific region and possibly the world.

The change of direction in the US and to some extent Europe poses an imminent threat to Asian exports, investors and economic growth. But it is also an opportunity for Asian countries to review their development strategies, rely more on themselves and the region, and take on a more active leadership role.

China made use of 2016 to prepare for this, with the Asian Infrastructure Investment Bank taking off and the immense Belt and Road Initiative gathering steam.

Many companies and governments are now latching on to the latter as the most promising source of future growth.

The closing months of 2016 also saw a surprising and remarkable shift in position by the Philippines, whose new President took big steps to reconcile with China over conflicting claims in the South China Sea, thus defusing the situation – at least for now.

Unfortunately, the year also saw heart-rending reports on the plight of the Rohingya in Myanmar, and the deaths of thousands of Syrians including those who perished or were injured in the end-game in Aleppo.

On the environmental front, it is likely 2016 will be the hottest year on record, overtaking 2015. This makes the coming into force in October of the Paris Agreement on climate change all the more meaningful.

But there are two big problems. First, the pledges in the agreement are grossly insufficient to meet the level of emissions cuts needed to keep the world safe from global warming, and there is also insufficient financing to support the developing countries’ climate actions, whether on mitigation or adaptation.

And secondly, there is a big question mark on the future of the Paris agreement as Trump had vowed to take the US out of it.

The biggest effect of 2016 could be that a climate skeptic was elected US President.

In the area of health, the dangers of antibiotic resistance went up on the global agenda with a declaration and day-long event involving political leaders at the United Nations in September.

There was growing evidence and stark warnings in 2016 that we are entering a post-antibiotic era where medicines will no longer work and millions will die from infection and ailments that could once be easily treated by antibiotics.

The world will also be closing in a mood of great economic uncertainty. In 2016 the world economy overall didn’t do well but also not too badly, with growth rates projected at 2.4 to 3%.

But for developing economies like Malaysia, the year ended with worries that the high capital inflows of recent years are reversing as money flows back to the US.

The first in an expected series of interest rate increases came last week.

All in all, there was not much to rejoice about in 2016, and worse still it built the foundation for more difficulties to come in 2017.

So we should enjoy the Christmas/New Year season while we can. Merry Christmas to all readers!

Global Trends By Martin Khor

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

 Global Reset 2016~2017

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