U.S. show of force in Asian waters a threat to China: magazine

The U.S. nuclear-powered aircraft carrier USS George Washington leaves for joint naval and air drills with South Korea at a naval port in Busan, South Korea, July 25, 2010. South Korea and the United States on Sunday began their large-scale joint military drills off the east coast of the Korean Peninsula as scheduled. (Xinhua/Yonhap)

BEIJING, Aug. 14 (Xinhua) -- Recent and planned dangerous moves of the United States in Northeast and Southeast Asia are manifestation of Washington's Cold War mentality and pose a threat to the security of China and the whole region, said the Globe magazine in a commentary.


The United States and South Korea has recently held military exercises in the Sea of Japan. The Pentagon announced that the two countries will also hold new war games in the Sea of Japan and the Yellow Sea. Furthermore, Washington has also indicated that it will stick its nose into the South China Sea, claiming that territorial disputes in the region has a bearing on U.S. national interests.

The U.S.-South Korean joint exercises at the end of July were no ordinary war games, said the signed article by Ju Wen. They were unprecedented in the past three decades both in terms of scale and weaponry. The resources involved were said to be enough for launching a full-scale war, it said.

With the participation of 8,000 troops, the games involved aircraft carrier USS George Washington and some other 20 warships as well as about 200 aircraft, including cutting-edge F-22 fighters.

The U.S. sabre-rattling raised the ire and drew protests from countries in the region. But Washington refused to change course and seemed determined to even expand the scope of its war games in Asian waters, said the magazine.

Pentagon said last week that U.S. and South Korean militaries were planning a new series of exercises, to be conducted in the Sea of Japan and the Yellow Sea simultaneously in following weeks. Moreover, the Pentagon said there would be more joint exercises that could last months.

While flexing muscles in the waters of Northeast Asia, Washington also showed a growing interest in the South China Sea and tried to come between China and her neighbors, said the magazine.

In a July speech in Hanoi, U.S. Secretary of State Hillary Clinton claimed the United States takes as a "national interest" in resolving South China Sea disputes.

She also told Vietnamese leaders that Washington hopes to upgrade its ties with Hanoi to a new level and sees its relationship with Vietnam "part of strategy aimed at enhancing American engagement in Asia and in particular Southeast Asia."

The United States proposed a nuclear cooperation deal with Vietnam and most recently, conducted controversial joint naval training exercises in the South China Sea, involving USS John S. McCain and USS George Washington.

Washington said its recent military maneuvers in Asian waters were for peaceful purposes. But that contradicts the facts, said the magazine.

The U.S.-South Korean war games were said to be aimed at preventing a repeat of incidents like the sinking of South Korea's Cheonan warship and maintaining peace of the Korean Peninsula. However, the war games were more than enough to intimidate the Democratic People's Republic of Korea, said the magazine. They were actually a show of force against China, it said.

USS George Washington, which is said to be involved in the upcoming war games in the Yellow Sea, has a reconnaissance range that covers the entire North China region, thus posing a direct military threat to China, said the magazine.

The real intention of the U.S. maneuvers in the waters of Northeast Asia, the commentary said, is to consolidate the U.S.-South Korea and U.S.-Japan military alliance and boost U.S. military presence in the region, and therefore intimidate and contain China.

Washington's intention to contain China becomes clearer as it tries to interfere in the South China Sea disputes and strengthen its military presence in Southeast Asia, said the magazine.

To a larger extent, the U.S. moves reflect the Obama administration's ambition to return to Asia to seek dominance of regional affairs.

Barack Obama claimed in Tokyo last year that he was the first U.S. president with an "Asia-Pacific orientation." Clinton said in Hawaii early this year that the future of America is closely linked to that of the Asia Pacific and that the future of the Asia Pacific depends on the United States.

Unfortunately, Washington's desire to return to Asia does not mean that it will bring in investments or technology, which is much needed to promote the region's prosperity. Instead, the objective is to reinforce its dominance in the Asia Pacific, said the magazine.

In addition to more troops in Afghanistan, the U.S. military is transforming Guam into its new strategic strike center that could cover large areas of the Asia Pacific. It redeployed 60 percent of its nuclear submarine fleet to the Pacific and has been consolidating its bases in Japan, South Korea and the Philippines. The recent war games demonstrated an intention to expand the sphere of U.S. military influence into the Yellow Sea and the South China Sea, said the magazine.

Although war games are not actual wars, the clattering of U.S. war machine in Asian waters remind people in the region of the notorious "gunboat policy" of Western powers in the colonial era.

The unpleasant noise naturally leads to regional tension and risks military confrontation, said the magazine.
In today's world, whose theme is multipolarization, globalization and common development, no country or region can succeed in seeking global dominance through military power. The Iraq and Afghan wars serve as good examples, it said.

Both the United States and China are important countries in the world. They are tasked to safeguard world peace. Peaceful coexistence, mutual benefit and common prosperity are therefore the only choice for the two countries and peoples, said the magazine.

China lags far behind the United States in terms of overall economic and military powers, and has neither the intention nor capability to threaten the United States, it said.

Instead of posing any threat, China's rapid development is benefitting the United States. China's growing economic strength has helped the United States recover from the latest financial crisis.

Washington should discard its Cold War mentality and gunboat policy, and return peace to the Sea of Japan, the Yellow Sea and the South China Sea, said the magazine.  

By Editor: Fang Yang

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Jobless millions signal death of the American dream for many

Even the criminals have fallen on hard times in America's poorest city as the long-term unemployed struggle to keep a grasp on normality  

Paul Harris

 

Union members hold up "I want to work" placards as they join a protest of several thousand people demanding jobs outside City Hall in Los Angeles on August 13, 2010. Photograph: Mark Ralston/AFP/Getty Images

 

Richard Gaines is one of the best-known faces on Camden's Haddon Avenue. It is a rough-and-tumble street, lined with cheap businesses and boarded-up houses, and is prey to drug gangs. Gaines, 50, runs a barbershop, a hair salon and a fitness business. He works hard and is committed to his community. But Haddon Avenue is not an easy place to make a living in the best of times. And these are far from the best of times.

Just how badly the great recession has struck this fragile New Jersey city, which is currently the poorest in America, was recently spelled out to Gaines. In happier times – whatever that might mean for a city as destitute as Camden – local businesses on Haddon Avenue could at least rely on a bit of trade from those who made their money on the street.

Young men bought flashy clothes and got sharp haircuts and always paid in cash. But no longer. The economy is now so bad in Camden that even the criminals are struggling and going short. "Even the guys who got money from illegal means really don't want to spend it," Gaines said.

Such a development, though, is just a snapshot of the deep problems still hitting the wider American economy. Growth rates are stuttering and a recovery is struggling to take hold. It may even now be showing signs of going backwards again, as countries such as Germany start to power forward. Joblessness has taken hold in America, with the numbers of long-term unemployed reaching levels not seen since the Depression of the 1930s. The figures are frightening and illustrate a society that remains in deep trouble.

The headline jobless figure of 9.5% is bad enough but does not begin to convey the problem as it fails to measure those who have stopped looking for work. Over the past three months alone more than a million Americans have fallen into that category: effectively giving up hope of finding a job and dropping out of the official statistics. Such cases now number some 5.9 million and their ranks are likely to grow as millions more find their jobless status becoming a permanent state of hopelessness. Surveys show that with each passing week on the dole their chances of finding a job get slimmer.

Though corporations, especially in the banking sector, are posting healthy profits, they are not hiring new workers. At the same time, government cuts are sweeping through city and state governments alike, threatening tens of thousands of jobs and slicing away at services once thought vital. Schools, street lighting, libraries, refuse collection, the police, fire services and public transport networks are all being scaled back.

America appears to be a society splitting down the centre, shattering the middle class that long formed the cultural bedrock of the country and dividing it into a country of haves and have-nots. "A once unthinkable level of economic distress is in the process of becoming the new normal," warned Nobel-prize winning economist Paul Krugman in a recent New York Times column. Or, as Steven Green, an economics lecturer at Baylor University, put it to the Observer: "We are really in a tough spot right now."

There is a new name for those falling down the black hole of joblessness that has opened up in America's economy. They are the 99ers.

It is a moniker that no one wants. It refers to the 99 weeks of benefits that the jobless can qualify for in America. Government cash helps those laid off keep a tenuous grip on a normal life. It keeps a roof over their heads, pays a phone bill, puts food on a table and petrol in a car. But once the 99 weeks are up the payments stop – as is happening now for millions of people – and they are 99ers.

For many, that moment, which America's politicians have refused to extend, represents the moment of destitution; a sort of modern American version of the old Victorian trip to the workhouse. There are now more than a million 99ers and the number gets bigger each week.

But who are they? Despite Republican attempts to paint them as feckless or job-shy, they are usually anything but. The 99ers are people like Anne Strauss, 58, who spent 35 years working as a PR professional on Long Island. Despite spending every day hunting for work, she has not had a job since June 2008. She and her husband are now living on credit cards watching debts mount as they stare into the abyss. "Looking for a job is the hardest I have ever worked," she said with a smile that conveyed no humour or happiness, only the deep stress that is common to many 99ers.

Strauss, along with about 50 other 99ers, protested on Wall Street last week, demanding an extension of the benefits that could keep them out of poverty. As bankers and financiers strode into the flag-draped Stock Exchange they chanted: "Shame! Shame!" and told their stories. It was a litany of middle-class lives shattered by the recession. There was Connie Kaplan, a corporate librarian who was desperate to resume her career. "We are not bums, we are hardworking," she said. Or Lori Ghavami, a New Jersey financial analyst in her 30s, who had once worked on Wall Street itself and now was staring at landlords' bills she was scared she could not pay. Or New Yorker Steven Bilarbi, 62, who had worked for the same employer for 37 years, until 2007. He has not worked since, despite refusing to spend daytime hours at home and engaging in a permanent job hunt. He is now living off savings and depleting his pension.

"I go to job fairs. I don't feel like staying home. What would I do? Watch game shows and soap operas?" he fumed.

Meeting 99ers is to tap into a deep well of anger at lives that have been knocked off course, shattering the enduring vision of the American dream that many had felt they had achieved. Just take Donna Faiella, a 53-year-old New Yorker who lives alone in Queens. She spent 28 years working in film post-production and video-editing. She was successful and had a career. Now she is desperate for a job, any job. But she cannot find one. "I will do anything. I will sweep floors. You think I look forward to collecting unemployment? It is fucking degrading," she said, almost quivering with anger.

Faiella is in dire trouble. Joblessness has eaten away at her sense of identity. "I feel like we are worthless. We are lost in the world. I don't know what to call myself. I don't have a title any more. What do we do? What do we do?" she implored. Faiella has one week of benefits to go. Then her 99 weeks will be up. She will have a title again. But not one she expected. She will be a 99er. "I am petrified. Do I become homeless?" she said, adding that she has begun making inquiries at local shelters.

If the 99ers are coming to symbolise a human segment of society that America is slowly abandoning to its fate, then Camden is the geographic expression of that marginalisation. Large stretches of the once bustling river port city seem to epitomise urban blight. Vacant lots and burned-out abandoned houses line many of its streets.

Its 79,000 residents have the lowest median household annual income of any city in the US at just $24,000 (£15,000). In terms of crime rates it was the nation's second-most dangerous city last year. Some estimates reckon that about a third of Camden's houses are empty. A third of its people are in poverty and a fifth are unemployed.

It is a deeply grim picture and it is getting worse. Camden's city government is facing the prospect of massive cuts as its cash-strapped resources have run out and it has built up huge debts. Services have already been cut and only a last-minute rescue last week saved Camden's three public libraries from being closed.

In a city that has had it tough for decades these are hammer blows to its residents. One woman who has watched in dismay as the recession unfolded outside her door is Dorothy Allen, 81, who has lived near Haddon Avenue for almost four decades. Known by almost everyone as "Mom", she calls herself "the mother of the block". She has never known anything like the area's current troubles. "I have been here since 1971 and it's the worst it's ever been," she said. Yet to listen to America's politicians many would think recovery is just a matter of time. Yes, they say, the recession has been hard, but America will pull through and everything will be as it once was. Last week New Jersey senator Robert Menendez visited Camden, stopping at a local health clinic. He spoke of the achievements of the Democrats in staving off economic disaster.

Job creation was coming, he told his audience of health executives: "It is not going fast enough to get people back to work but it's a dramatic turnaround." It does not feel that way for millions of Americans all across the country. Camden is far from unique in slashing its services. In Colorado Springs more than a third of street lights have been switched off to cut the municipal electricity bill. The city has also sold off its police helicopters.

In Hawaii schoolchildren were told to stay at home for 17 Fridays to save costs. In a suburb of Atlanta local bus routes were closed, at a stroke wiping out public transport for thousands of people who relied on it to get to precious jobs.

Whether it's the poor of Camden or Colorado Springs or Atlanta, or among the growing throngs of the 99ers, millions of Americans are discovering that working hard, doing the right thing and obeying the rules are no longer enough.

Back at the 99er rally on Wall Street, Anne Strauss felt that way. During her working life she had refused to claim benefits to which she was entitled as she thought she was doing just fine. Now, as a newly minted 99er, she was looking for help from the country that she had always believed in. But the help was not forthcoming. It is hard to see how the version of the American dream that Menendez described could now ever apply to her. For Strauss, living on credit, desperate to work, but with no job in sight, that dream looks a thing of the past, not the future. "This is not the country I grew up in," Strauss said.

Case study: 'This is my last $260 and barring a miracle I'll be sleeping in my car'

Alexandra Jarrin, 49, worked for a small technology company near New York City, earned $56,000 a year, had petrol in her car and a roof over her head. She was enrolled in a graduate business school. Then, two years ago, she lost her job .

She received her last unemployment payment in March, putting her among the first wave of "99ers" who have come to the end of their 99 weeks of entitlement to benefits. When interviewed by the New York Times, she was living in a motel in Brattleboro, Vermont, having paid $260 she managed to scrape together from friends and from selling her living-room furniture – enough for a week-long stay.

She said she wept as she left her old life. 'I thought, you know, what if I turned the wheel in my car and wrecked my car?' Her vehicle is now on the verge of being repossessed. Jarrin has contacted her local shelter, but was told there was a waiting list. "Barring a miracle, I'm going to be [sleeping] in my car," she said.

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Paralysis at the Fed

By PAUL KRUGMAN

Ten years ago, one of America’s leading economists delivered a stinging critique of the Bank of Japan, Japan’s equivalent of the Federal Reserve, titled “Japanese Monetary Policy: A Case of Self-Induced Paralysis?” With only a few changes in wording, the critique applies to the Fed today.

Paul Krugman

At the time, the Bank of Japan faced a situation broadly similar to that facing the Fed now. The economy was deeply depressed and showed few signs of improvement, and one might have expected the bank to take forceful action. But short-term interest rates — the usual tool of monetary policy — were near zero and could go no lower. And the Bank of Japan used that fact as an excuse to do no more.

That was malfeasance, declared the eminent U.S. economist: “Far from being powerless, the Bank of Japan could achieve a great deal if it were willing to abandon its excessive caution and its defensive response to criticism.” He rebuked officials hiding “behind minor institutional or technical difficulties in order to avoid taking action.”

Who was that tough-talking economist? Ben Bernanke, now the chairman of the Federal Reserve. So why is the Bernanke Fed being just as passive now as the Bank of Japan was a decade ago?

Now, America’s current economic troubles aren’t exactly identical to those of Japan in 1999-2000: Japan was experiencing outright deflation, while we aren’t — yet. But inflation is well below the Fed’s target of around 2 percent, and it is continuing to slide. And Americans face a level of unemployment, and sheer human misery, far worse than anything Japan went through.

Yet the Fed is doing almost nothing to confront these troubles.

What could the Fed be doing? Back when, Mr. Bernanke suggested, among other things, that the Bank of Japan could get traction by buying large quantities of “nonstandard” assets — that is, assets other than the short-term government debt central banks normally hold. The Fed actually put that idea into practice during the most acute phase of the financial crisis, acquiring, in particular, large amounts of mortgage-backed securities. However, it stopped those purchases in March.

Since then, the economic news has grown steadily worse. And earlier this week, the Fed changed course — but barely. It now says that it will reinvest the proceeds from maturing securities in long-term government bonds. That’s a trivial change, basically the least the Fed could get away with without facing a firestorm of criticism — and far short of the major asset-purchase program the Fed should be undertaking.

Back in 2000, Mr. Bernanke also suggested that the Bank of Japan could move expectations by making announcements about its future policies. In particular, he argued that it could make private-sector borrowing more attractive by announcing that it would keep interest rates low until deflation had given way to 3 percent or 4 percent inflation — an idea originally suggested by yours truly. Since we are, if anything, in worse shape now than Japan was in 2000, an inflation target of at least 3 percent would very much be in America’s interest. But as chairman of the Fed, Mr. Bernanke has explicitly rejected any such move.

What’s going on here? Has Mr. Bernanke been intellectually assimilated by the Fed Borg? I prefer to believe that he’s being political, unwilling to engage in open confrontation with other Fed officials — especially those regional Fed presidents who fear inflation, even with deflation the clear and present danger, and are evidently unmoved by the plight of the unemployed.

And in fairness to Mr. Bernanke, discord among senior officials also makes it difficult for policy to change expectations: it would be hard to credibly commit to higher inflation if this commitment were constantly being undercut by speeches out of the Richmond or Dallas Feds. In fact, I’d argue that loose talk by some Fed officials is already having a negative economic impact. But while Mr. Bernanke doesn’t have the authority to stop that loose talk, he could make it clear that it doesn’t represent overall Fed policy.

Last, but not least, policy is suffering from an act of neglect by President Obama, who waited until his 16th month in office before offering a full slate of nominees to fill vacancies on the Federal Reserve Board. If he had filled those slots quickly — his nominees still aren’t in place — the Fed might be less passive.

But whatever the reasons, the fact is that the Fed — which is required by statute to promote “maximum employment” — isn’t doing its job. Instead, like the rest of Washington, it’s inventing reasons to dither in the face of mass unemployment. And while the Fed sits there in its self-inflicted paralysis, millions of Americans are losing their jobs, their homes and their hopes for the future.

David Brooks is off today.

What are the US banks up to?

A QUESTION OF BUSINESS BY P.GUNASEGARAM

Fighting greed is not going to be easy even with new laws

IF anyone had apprehensions over the Finance Reform Bill that US President Barack Obama has pushed through to become law, they should look at what US banks continue to do.

It should be obvious from that, why the bill was so necessary in the first place. In fact, there is an increasing body of opinion that feels that the bill has not gone far enough to ensure that key financial institutions stayed on the straight and narrow and did not endanger all its stakeholders.

The reforms were signed into law last month and were heavily criticised by some sectors who felt that it permits too much interference by the state into the running of financial institutions, some of the largest of which had to be rescued through hundreds of billions of dollars of US government funding.

The eventual cost to the system and the fall-out caused by the collapse of major financial players on to all sectors of the US economy and the collateral damage to the world may easily raise the total cost of the collapse into tens of trillions of US dollars.

The underlying cause of this sorry episode was greed. The bankers were permitted to come up with increasingly complex and dubious financial instruments, which they packaged in all manner of wrapping, marketing it to all and sundry.

All that mattered under such a scenario was profit to the banks and enormous bonuses to staff.
Some traders earned more than US$100mil in a year.

The most profitable investment bank Goldman Sachs, even after its bailout by the US, paid out nearly 50% of its revenue – yes revenue – as bonuses in the second quarter of last year.

Goldman Sachs, which, as an investment bank, was not entitled to a bailout, had to change its charter to become eligible for US government assistance. Post bailout it also came to pass that it had profited enormously from a deal with the AIG group which posted massive losses as a result of underwriting sub-prime bonds.

The Finance Reform Bill was aimed at stopping some of these abuses and make it unnecessary for the US government to bail out the so-called “too big to fail” financial institutions by selling off their assets and having disincentives to let them grow too big in the first place.

It also aims to stop banks from using customer deposits to fund extremely speculative, hedge-fund-like activities although it is not clear how it proposes to do this.

Already this year, some of the major investment banks reported losses on some days from trading operations. Here are the reports from Bloomberg:

“Goldman Sachs, the bank that makes the most revenue trading stocks and bonds, lost money in that business on 10 days in the second quarter of this year, ending a three-month streak of loss-free days at the start of the year.

“Losses on Goldman Sachs’ trading desks exceeded US$100mil on three days during the period that ended June 30, according to a filing by the New York-based company with the Securities and Exchange Commission. The firm also disclosed that trading losses surpassed its value-at-risk estimate, a measure of potential losses, on two days.

“Morgan Stanley lost money on 11 days during the second quarter. The losses never exceeded US$75mil daily, and never surpassed the firm’s value-at-risk estimate. Morgan Stanley’s traders made more than US$175mil on one day, the firm said in an SEC filing.

“JP Morgan Chase & Co traders also broke their three-month winning streak, losing money on eight days in the second quarter, according to an Aug 6 securities filing. JP Morgan’s average daily trading revenue fell to about US$72.4mil during the second quarter from US$118mil during the prior three months.

“The firm made more than US$200mil on ten days in the first six months of the year.”

What do all these mean? How can a bank make US$200mil on one day and then lose US$100mil on another day? The answer has to be sheer speculation. High returns come with high risks – that should have been the lesson of the international financial crisis. But obviously that lesson has not been learnt. If banks, which have so recently been bailed out, speculate like that, we can expect that there will be every chance that there will be another crisis.

Obama is trying to prevent that through legislation but already he is being heavily castigated and criticised, especially by Wall Street, for his efforts.

One can only hope he has the guts to go through with it and that most people in the US do not fall for that emotional appeal by Wall Street profiteers to preserve free market and enterprise.

Wall Street needs to be regulated – now. If it is not, there is danger not just to the US but to the world at large.

> Managing editor P Gunasegaram says there is no such thing as a free market although there may be such a thing as a free lunch – sometimes.

Creativity - the key to NEM’s success

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

It is not good enough to have policies to attract and retain talent. Weaknesses have to be dissected and addressed

THE New Economic Model (NEM) was unveiled in March and the 10th Malaysia Plan (2011-15) in June. These aim to transform Malaysian life and fortunes. At the heart is innovation.

The Prime Minister takes every opportunity to drive this home – to succeed, innovation must be pushed harder and harder until it becomes an integral part of the nation’s culture.

As a concept, innovation simply means the nurturing of talent for creativity. Here, creativity can be likened to producing something original and useful.

Viewed differently, to be creative means to deal with the classic creativity challenge of getting divergent thinking (producing unique ideas) and convergent thinking (putting ideas together to improve life) to work in tandem.

According to Prof Paul Torrance (who created the gold standard in creativity assessment), a creative person has an “unusual visual perspective”, matched with an “ability to synthesise diverse elements into meaningful products.”

It’s essentially about getting the left and right brains to operate as one. A recent IBM CEOs poll identified creativity as the No. 1 “leadership competency” of the future. Unfortunately, we don’t have such a culture.

A culture thing

Since Tun Mahathir Mohamad’s Look East policy, we have yet to succeed in emulating Japan’s innovation culture. Three main elements of this culture remain alien to us: its mentor system of management; acceptance of starting at the bottom to understand a firm’s workings at every level; and the Japanese function in unison as a workforce and the future of the firm. Whatever we have since achieved is still very much work in progress.

As a matter of public policy, we did try to create a Malaysian way of developing our own brand of creativity culture by: making Malaysia an attractive place to live, with security, good infrastructure and communications, within a unique and relaxed way of life that is multi-racial, multi-religious and multi-cultural, which foreigners can easily adapt to; and trying to position the nation as a base for foreign direct investments (FDIs) to come, expand and prosper, with widespread use of English.

We tried these to make up for what is special to the Japanese, but there was only limited success. We just don’t have the culture, and we can’t (and won’t) change readily enough to develop such a culture.

Earlier this year, in a column titled “On productivity and talent management”, I wrote: “Human capital lies at the core of innovation. Raising productivity requires a labour force of high calibre – committed, motivated and skilled enough to drive transformational change based on excellence over the long term. It’s about trapping potential through acquisition of new skill sets in designing new products and services, and devising new processes and systems to do things smarter and more efficiently. This requires ready access to a talent pool of critical skills and expertise.”

Frankly, we don’t as yet have such a pool. Therefore, we need to go back to basics. This means transforming our education system to emphasise meritocracy and lay the foundation for creative thinking and analysis from day one.

For a start, teaching curriculum, pedagogy and management of education have to be reformed. US President Barack Obama is right: “If we want success for our country, we can’t accept failure in our schools.”

Fortunately, as evident from a recent supplement in The Economist magazine, creativity can be taught.
It starts with recognising the new view that creativity is part of normal brain function. The trick is to get the classic divergent-convergent creativity challenge working as a matter of habit.

First, we need to discard the emphasis on IQ in favour of CQ (creativity quotient). It is already proven that Torrance’s creativity index is a good predictor of kids’ creative accomplishments as adults.

According to Prof J. Plunker of Indiana University, the correlation to lifetime creative accomplishment was more than three times stronger for childhood CQ than childhood IQ. However, unlike IQ scores (which rise 10 points every generation because presumably, enriched environments produce smarter kids), CQ scores in the US and many other rich nations have fallen, of late.

This no doubt reflects that kids now spend more and more time in front of TVs and playing video games, rather than engaging in creative activities. Also, there’s the growing lack of creativity development in schools and at home.

The same decline is happening in Malaysia. Reform must adopt a problem-based learning approach – where education is revamped to emphasise ideas generation, curricula is driven by real-world enquiry, and pedagogy acquaints teachers with neuroscience of creativity.

Critics argue our kids already have too much to learn. This is a false trade-off. Creativity thrives on fact-finding and deep research.

High global curriculum standards can still be met – but it needs to be taught differently. Creativity is prized in Malaysia, but, we don’t seem to be committed politically to unlock it.

Continuing denial

We have not produced (and are unlikely to produce) talent in sufficient numbers to take us to the next level of becoming a high-income nation. For sure, what got us to where we are today will not get us to where we want to go. To begin with, we have to broaden the human capital base. For this, we need to transform our education system to secure at least a quality supply flow in the next generation.

In the end, it’s not just about sustaining economic growth. We are surrounded with matters of national and international importance crying for creative solutions – from striving for excellence to raising productivity to delivering quality healthcare.

Such solutions emerge from an open marketplace of ideas. These can be sustained by a workforce constantly contributing original ideas and being receptive to ideas of others. What is required is real leadership to effectively harness the vast energies engendered.

The Prime Minister is right in highlighting government as a key component of the creative ecosystem, in what he calls “bringing innovation into government and government into innovation.”

This is to enable the formulation of framework, regulation and policies that support and not hinder innovation. It’s a great policy move but in reality, the Government at large has yet to buy into this transformational change.

If you ask around – as far as talent development and retention goes – much of the Government remains in denial. President Ronald Reagan once said jokingly the nine most feared words in the English language are “I am from government and I am here to help.” This rings all too true!

Come on, get real

Studies by an old friend Prof Rajah Rasiah identified three underlying causes for Malaysia’s poor showing in last year’s FDI inflows, according to the 2010 World Investment Report – its narrow human capital base, absence of synergy between research and development labs and industry, and inadequate technological absorption, in the face of intensifying competition in Asia especially for talent.

Like it or not, the talent game is dynamic as it is intense. It is not good enough to have a set of policy responses to attract and retain talent. Weaknesses have to be dissected and addressed, and practical solutions neatly designed for effective implementation in a well coordinated fashion.

Most policy pronouncements reflect incentives offered by the Government which it considers attractive. Nobody bothers to ask the targeted talent what they want and what it takes to make them want to move.

The tendency is to assume that, given the right incentives, Malaysian talent overseas would move back and foreign talent is readily attracted to come to Malaysia. Hence, the dismal failure of the “brain-gain”
programme. The approach is all wrong. Get real!

The bar on talent has since been raised. Fuelling the war for talent, enterprises in Asia are providing higher salaries and perks.

A sea change is taking place in the way businesses organise themselves, create wealth and market their brands and wares worldwide.

The rise of the Web and tech-based professions in logistics, biotech, life sciences and information technology put a premium on scientists, engineers, financial analysts and computer geeks.

In Asia, soft skills which were previously sidelined (such as adaptability, English and Chinese skills, ease in fitting into other cultures, negotiation and political savvy), are now in demand.

It’s no longer enough to be talented in Oracle and Java. Global experience, an ability to lead multicultural teams, and diplomatic know-how to move seamlessly across borders, are among the skills in short supply.
The globalised economy has changed everything. Indeed, businesses will ultimately have to rethink the way they recruit and steward talent.

Today, China and India are becoming sources of innovation. Already, these nations are benefiting from “brain-circulation”, with capital and talent returning after value-adding in skills and experience abroad.
This is occurring without government incentives. National ecosystems are evolving nicely for them. It’s happening simply because it makes good business sense. There is much Malaysia can learn from the new reality.

As wealth and power change hands, talent is no longer a buyer’s market for the traditional rich. By 2015, the International Monetary Fund projects that Asia-Pacific will make-up 45% of global gross domectic product as against 20% by the US and 17% by Euro-zone.

The talent drain can only get more intense. We now have a world where talent can be found anywhere. The problem is particularly acute in Asia and Latin America, where breakneck growth is pushing management to the limit.

The talent crunch is real. Throwing money and incentives at talent won’t necessarily solve the problem. We need to think long-term and re-think old ways.

To do that, corporations are already investing to create the talent they lack, going so far as to establish their own universities to shape raw recruits into corporate leaders. In the end, nations need to have a workable process to recognise talent, fast-track careers, and provide fresh opportunities; essentially, to understand what makes them tick.

It needs high-potential programmes to attract and retain key talent within an ecosystem that provides for high living standards, where security and rule of law are taken for granted.

But, risks remain in the global economy. Concerns of citizens must be addressed by developing and investing in them. The quality of tertiary and vocational education has to be raised as a matter of priority. Imported talent will reinforce local talent; only bring in people who can contribute. Striking the right balance is vital.

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