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Sunday, 20 February 2011

Egypt, Arab world on Fire !

Egypt behind the headlines

By Amy Chew sunday@thestar.com.my 

The Star team Amy Chew and Azhar Mahfof were in Egypt recently to witness the people’s uprising against Hosni Mubarak and their victory when the president stepped down after 30 years.



Are you game for Egypt?” said a text message from my group chief editor Datuk Seri Wong Chun Wai.
I stared at the text, not believing my eyes for a moment, before replying “yes!”

I immediately set out to make contacts in Egypt. I called and e-mailed Cairo for days on end, to no avail.
Ex-President Hosni Mubarak’s regime had shut down the country’s mobile phone and Internet services on Jan 27 for five days in an attempt to stop the protests from spreading.

After I arrived in Cairo on Feb 5, I learned that Vodafone, one of the country’s largest telecommunications companies, was forced to shut down at gunpoint.

This interesting bit of news came from a Vodafone employee protesting at Tahrir Square, the epicentre of the movement to oust Mubarak.

Clear message: An anti-government protester holding a placard that reads: ‘Leave, if you don’t understand, we can write in Chinese for you’ during a demonstration in Tahrir Square. — AZHAR MAHFOF/The Star  

“This is something the public relations at my company will deny. I was at work that time,” says the employee who declined to be named.

“On Jan 27, the government sent people to Vodafone. They went to the control room, took out their guns, pointed them at the staff and told them to kill switch,” said the employee.

I was fascinated. As he was speaking, more people joined in. Each time I interviewed a person, people would join in.

Everyone was eager to voice their opinions or recount a bad experience with Mubarak’s regime. I found myself constantly surrounded by a small crowd at Tahrir Square.

Earlier, I had interviewed a doctor who had a haunted look on his face. He had approached me, saying he was a doctor at a government hospital closest to Tahrir Square.

“I was on duty the night violence erupted (Feb 2),” he said, declining to give his name. On that fateful night, pro-Mubarak supporters had clashed with anti-Mubarak protesters. Hundreds of people were shot and beaten to death.

“I saw many victims. They were brought to my hospital,” he continued.

“They had been shot in the head, the neck, the chest. I saw people shot between their eyes; there were more than a hundred of them,” he said softly and then paused, blinking away tears.

I lowered my head. “I felt very sad. They (victims) were all young, below 30 years old. They felt like my brothers and sisters,” said the doctor.

Human rights groups estimated more than 300 people died in the violence. “Are you worried for your safety as you personally witnessed the brutalities?” I asked.

“No. I am not scared and I want change. That’s why I am here,” said the doctor. After recounting his experience, he slowly walked away, silent, dignified and determined.

Courage and kindness 

On Feb 10, Egypt was abuzz with rumours that Mubarak would announce his resignation on national TV. The whole country waited with bated breath.

When he finally appeared, Mubarak announced he was not stepping down. The protesters were outraged.
The next day was a Friday. The crowds at Tahrir Square vowed to fight to the end.

“If a bloodbath is what he wants, that is what he will get. We are ready to die,” said Mohamed Faisal, a member of the anti-Mubarak youth movement.

Rumours flew in every corner of the city that Mubarak’s regime would attack the protesters. “We heard all kinds of things, that bad things would happen to us,” said the protesters.

“Are you scared?” I asked them. “No,” they said. I wrote down their words. “Don’t worry. Nothing will happen to you. We will not let anyone harm you,” a 20-year-old student by the name of Helmy said to me. I was touched.

Helmy is a tall, sweet-looking boy. He travelled from Dakaliq in the north of Egypt to Cairo to demonstrate.
“My father is old, so he sent me here to protest on behalf of our family, to fight for change,” said Helmy.

We had two translators, Amr Gamal and Mohamed Saeed, who took good care of me and my colleague Azhar. Amr is a professional bodyguard who works in Dubai. He was back in Cairo on home leave when he was roped in to help us out.

Friday dawned. Amr, who has good government contacts, was assigned to assist me. “Today is going to be very dangerous. There is talk of shooting at Tahrir after 2pm,” he told me.

We headed off to the square. The crowds were massive. We had to squeeze our way through a sea of humanity.

Female travellers to Egypt often complain of harassment by local men, of being groped and pinched. There was none of that during the revolution.

The anti-Mubarak movement had brought out the best in people. The men were polite and chivalrous. They gave way to women at every turn.

On arriving at the square, I chanced upon a group of protesters who spoke English and interviewed them.
At 2pm, Amr who had left earlier, reappeared. “Do I have to go?” I asked.

“Up to you. There may be shooting. But if you want stay, that’s fine with me. Nothing will happen to you. I will protect you, don’t worry,” he said.

I felt it wasn’t fair for Amr to risk his life and limbs for me. So we left. In the evening, Mubarak resigned. Cairo erupted with joy.

I called Amr who immediately returned with a friend, also a security personnel. Our other translator, Mohamed, could not make it. 

Amr’s friend, who declined to be named, translated and guarded me. Amr went with Azhar. We finished our work and returned to the hotel past 11pm.

Journalist attacked

This week, CBS News disclosed that its correspondent Lara Logan was sexually assaulted and beaten by a mob of 200 while covering Mubarak’s resignation and the crowd’s reaction at Tahrir Square, the very same time I was there. I did not witness the attack.

From my experience in covering huge rallies, untoward incidents can happen at any given time. I could be at the same venue as another person, but encounter a very different experience. There is no doubt in my mind Amr and his friend’s presence and dedication kept us safe that night.

Many journalists were attacked while covering the revolution in Egypt. We were very lucky.

Egyptian demonstrators

Egyptians must be the best-looking demonstrators in the world and their courage was inspiring.

As I boarded the plane to return home on Feb 13, I felt very blessed for the chance to witness a major chapter of Egyptian history.

China aims to be top at science




Scientifically the best, China spends more on science and tech to displace US & Europe

 February 19, 2011 by Karin Zeitvogel A lab worker in China 
Enlarge
This picture taken in 2009 shows a masked worker in a lab coat sorting silicon wafers at the manufacturing centre of solar cell maker Trina Solar in Changzhou. China has its eye on becoming the top science nation in the world, a position held for decades by the United States and European nations, researchers at a US science conference said Friday.

China has its eye on becoming the top science nation in the world, overtaking the United States and European nations, researchers at a US science conference said Friday.

After being the world's main source of cheap manufactured goods, China is investing heavily in and technology.

"China hopes to become one of the leading sources of intellectual property in coming years," said Denis Simon, a professor at Penn State University who is also the science and technology adviser to the mayor of the Chinese city of Dalian.

At a time when the and Europe are hamstrung by shrinking budgets, China has increased spending on science and technology "significantly," Simon said at the annual meeting of the American Association for the Advancement of Science (AAAS).

"The Chinese have indicated that by 2020 they hope to spend around 2.5 percent of GDP () on research and development," said Simon.

In the United States, meanwhile, Republican lawmakers are talking about trimming a billion dollars from the National Institutes of Health, the world's largest public research institute, and slashing funds for other science and research agencies, in a bid to narrow a trillion-dollar US deficit.

That is at odds with the billion-dollar boost President proposed for science and health research in his 2012 budget.



The Republicans also want to slash funds for education by some $5 billion, even though Education Secretary Arne Duncan has warned that the United States must better educate its kids, especially in science and math, or risk becoming uncompetitive in the .

A report last year showed the United States has slipped from second place to 13th out of 34 countries in the number of students enrolled in university, and that it was stagnating in science teaching -- in 17th place -- and doing poorly in math, in 25th place.

The Chinese city of Shanghai, which was considered a country for the education report, made its debut in the rankings in first place.

More Chinese are enrolling in universities, which means there will "be more researchers in China than there are in the US," which will drive up Chinese scientific output and the quality of the reports, said Penn State professor Caroline Wagner at the AAAS meeting.

In another sign that China is serious about moving into the top slot for science, the number of quality scientific papers coming out of the country -- measured by how often they are cited in other studies -- is growing exponentially.

How often a peer-reviewed scientific report is cited by another scientist is considered a key measure of quality, Wagner said.

The number of Chinese papers being cited is up, while the number of citations of US or European reports is declining.

In sheer volume of work, China already produces more research papers in the fields of natural science and engineering than the United States, which is overall the biggest producer of scientific reports in the world, said Wagner.

"But based on current trends, China will publish more papers in all fields by 2015," Wagner said.
But there are obstacles standing in the way of China becoming the world's leading science nation.

Among them, has to overcome a massive brain drain, which sees nearly three-quarters of Chinese who travel abroad to study staying overseas, and a culture of fabrication and plagiarism among Chinese researchers, that Simon said could be driven by intense pressure and competition.

(c) 2011 AFP

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We’re in Beijing!

Er ... we’re in Beijing!

By CLARENCE CHUA



THE one thing that you have to get used to in Beijing is the curious case of the “er”. Mandarin-speaking Malaysians will usually say zheli, nali, (literally translated as “here, there” respectively).

In the Chinese capital it’s usually said with an er at the end, “zhe’er and na er. Let me give you another example of the “er”.

When you ask for directions, Beijingers will say zai nan men’er” (at the south gate) or “yi su hua’er” (a bunch of flowers). But it is not exactly wrong if you don’t say it at all.

In fact the er is just a Beijing slang. Learning when to use the er is an art and you really have to be in Beijing to learn how to use it. And if you decide to study Chinese in Beijing, er is not the only thing that you have to look out for.

China may be the largest producer of affordable Nike shoes or Adidas for that matter, but it doesn’t mean living in Beijing is cheap.

Regarded as one of China’s top varsities, Tsinghua University has an American-inspired auditorium.
 
It may not be a financial centre or have the cleanest air quality, but it is no doubt China’s cultural and political centre.

Besides, Beijing has a concentration of China’s best universities. Tsinghua, Peking, Renmin and the China University of Political Science and Law are all located within the Haidian district. It also plays host to several other universities and tech giants such as Microsoft and Google.

Foreign students are invading China fast and you don’t need an expert to tell you why.

This forms part of the problem. The demand for accommodation is driving up rent. With property prices at an all-time high, rest assured the price for a bed won’t come cheap either.

Student accommodation with a Chinese price tag is obviously meant for local students only. Foreigners were welcomed as friends before.

Now, after 30 years of economic liberalisation, the laowais (foreigners) are viewed as friends with benefits.
In Tsinghua University, a dorm bed for foreign students is at least 40 yuan (RM20) a day and extremely hard to come by.

An en suite now cost 100 yuan (RM50) a day, which works out to about RM1,500 a month! That is the price for an entire year in some local dormitories!

When in Beijing, be prepared to pay at least 1,000 yuan (RM500) for a bed.

Teaching Hanyu is big business in China. Chinese universities charge about RM5,000 per semester.

Private institutions that cater to Western clients charge from 80-200 yuan (RM37-RM92) an hour, which I feel is terribly expensive especially if you’re just starting out.

The average price for beginners is 30 yuan (RM15) an hour. University students around the Wudaokou area are more than willing to be your friend and tutor.

If university life is too rigid for you, then try The Global Village. It is a Korean-owned language school next to the Wudaokou subway station.

Its website is exclusively in Korean and its existence among other foreigners is spread solely by word of mouth.

In many ways the Global Village has become synonymous to Wudaokou as Peking and Tsinghua University is to the area.

A one-hour class may cost the same as any other university, but it allows you to pick and choose classes.
The school is extremely popular among Koreans preparing for the standardised Hanyu exams (HSK).

Western students on a budget see it mainly as a springboard to their adventures in China. Many attend only one class in the morning and proceed to teach English for the rest of the day.

Like many former or “reformed” socialist countries, visa requirements remain strict. If you plan to study at a university, the application is straight forward.

Studying in the Global Village is more complicated. Foreigners with a tourist visa have to extend it while studying at the school. But getting a visa extension in China could be problematic.

Meeting other laowais is perhaps one of the advantages of learning Mandarin in China. When I say foreigners I don’t mean Americans and British. I mean “real” foreigners from countries you can’t pronounce.

Two of my former classmates are from Kazakhstan and Uzbekistan. My current classmates include an Andorran, a Lithuanian and Kyrgyzstani.

My “brother” James is from Niger, and he will launch a Bruce Lee sidekick straight at your groin if you pronounce his country wrongly. I sometimes have lunch with the laowais and I feel like I am in the United Nations!

Former Australian prime minister Kevin Rudd said in a speech of China at Peking University in 2008, “tian bu pa, di bu pa, jiu pa, zhi pa laowai shuo zhonggou hua (not afraid of heaven, not afraid of the earth, only afraid of foreigners who speak Chinese)”.

The foreigners are coming in full force. In the not too distant future, the “er” will not be so strange after all!

Saturday, 19 February 2011

Malaysia's GDP Growth 7.2% in 2010

By JAGDEV SINGH SIDHU  jagdev@hestar.com.my

Better than expected growth of 7.2%

Big boost from services and manufacturing segments last years



KUALA LUMPUR: Growth of the Malaysian economy in 2010 beat official expectations as the economy expanded by 7.2% compared with the official projection of 7%. The economy contracted by 1.7% in 2009.

Much of the growth for the year was provided by the two largest segments of the economy services and manufacturing which grew by 6.8% and 11.4% in 2010.

The construction sector, which is universally acknowledged to have the deepest linkages within the economy, expanded by 5.2% last year compared with 5.8% in 2009.

Spending by households and businesses also drove private consumption up steeply to report a growth rate of 5.3% compared with 1.2% before.

“Going forward, the global economic recovery is expected to remain uneven across the different regions,” Bank Negara said in a statement.


“While short-term prospects for the advanced economies improved recently, uncertainties remain over weak fiscal positions, high unemployment and constrained lending conditions.”

It said the growth outlook for Asia, however, remained favourable but regional economies were confronted with the challenges of rising inflationary pressures, particularly from high commodity and fuel prices, and the large and volatile capital flows.

“The pace of growth of the Malaysian economy will be affected by the environment of moderating external demand,'' it said.

Bank Negara said growth would, nevertheless, be supported by continued expansion in domestic demand and private consumption spending would continue to benefit from the favourable labour market conditions, firm commodity prices and access to financing.

“The roll-out of construction and infrastructure activities and the implementation of the economic transformation programme by the Government are likely to provide significant support to the growth momentum in private investment,'' it said.

Bank Islam chief economist Azrul Azwar Ahmad Tajudin expects the pace of moderation of the economy as shown from the second quarter onward to continue until the second half of this year.

He said the higher base effect, the inventory restocking which boosted numbers in the first half of last year and the projected sluggishness of the global economy, austerity measures in Europe and cooling measures by China would be a drag on growth numbers.

AmResearch senior economist Manokaran Mottain, however, feels the slower numbers would relieve the central bank from any pressure to raise interest rates.

For the fourth quarter, the economy expanded by 4.8% as higher private and public sector spending contributed to the expansion in domestic demand but the economy was hampered by a slowdown in external trade.
Domestic demand expanded by 5.7% in the fourth quarter compared with 5% in the third quarter, due mostly to the strong expansion in private consumption and capital spending.

Private consumption grew by 6.5% (third quarter: 7.1%) supported by a favourable labour market, positive consumer confidence and higher income levels. Public consumption fell by 0.3% (third quarter: -10.2%) as the Government spent less on supplies and services.

Gross fixed capital formation increased by 9.2% in the fourth quarter (third quarter: 9.8%) driven by both public and private capital spending.

“Private sector capital spending was led by the expansion in the production of domestic-oriented industries amid high levels of capacity utilisation. Public sector capital investment rose as a result of higher development expenditure mainly in the education and transportation sectors,'' Bank Negara said.

During the fourth quarter, the services and construction sectors registered higher growth rates than the third quarter while the growth rate of manufacturing slowed.

The agriculture and mining sectors contracted in the fourth quarter compared with the third.
Bank Negara said gross inflows of foreign direct investment for the final quarter of last year were higher at RM11.8bil (third quarter: +RM8.5bil) as more money poured into the capital markets.

On a net basis, which is after adjusting for gross outflows due to repayment of inter-company loans, net FDI increased to RM8.3bil (third: +RM4.4bil) as FDI was channelled mainly into the services, manufacturing and mining sectors.

The central bank said investments in the services sector were primarily undertaken by companies in the finance, insurance and business services, as well as wholesale and retail trade sub-sectors.

In the manufacturing sector, the FDI was channelled into the electrical and electronics as well as petroleum-related industries.

Malaysians invested less money abroad in the fourth quarter as the net outflow was RM3.2bil (third quarter: -RM5.4bil) due to lower net extensions of inter-company loans to subsidiaries abroad.

Bank Negara said investments were mainly in the services sector, particularly in the finance, insurance and business services, and wholesale and retail trade sub-sectors and there were also large investments abroad in the oil and gas and the agriculture sectors.

Portfolio investment registered a smaller net inflow of RM2.8bil in the fourth quarter (third quarter: +RM9.8bil) as foreign investors sold off their shares and bond holdings in the country, particularly in November, in reaction to sovereign debt concerns in the eurozone.

“Nevertheless, steady growth in the domestic economy has continued to attract inflows of foreign funds into the domestic equity and bond markets,'' it added.

A mea culpa by the IMF

THINK ASIAN By ANDREW SHENG 

Independent Evaluation Office has set an example of what should be done for the fund

LATIN American social philosopher George Santayana said those who forget history are doomed to repeat it.
IMF voting share reform inches forward
View Full Image
REUTERS: International Monetary Fund (IMF) Managing Director Dominique Strauss-Kahn delivers a speech about global economy and IMF reform at Tsinghua University in Beijing November 16, 2009.


Why didn't the International Monetary Fund (IMF) see this global crisis coming? This was the question posed by the Independent Evaluation Office (IEO) of the IMF in its report published on Jan 10.

Some readers will remember that the IEO was established after the Asian financial crisis to evaluate independently where the IMF had gone wrong during the Asian crisis. To the IMF's credit, it understood that it had to be transparent to be credible and the IEO's specific mission is to provide independent feedback to the IMF board on the IMF's effectiveness.

This time, the IEO focused specifically not the fund's handling of the crisis, but its surveillance performance in the period from 2004-2007.

The IEO should be commended on its methodical analysis. Since the IMF did not warn its members of the unfolding crisis, the study concentrated instead on whether the fund evaluated the proper risks and vulnerabilities before the crisis, what message the fund gave to its board and members, and what constraints the IMF had in conveying the difficult messages.

The facts are even up to April 2007, the IMF's main message was continued optimism after the prolonged period of benign stability. Even though it warned of the global imbalance, there was insufficient focus on the balance sheet fragilities, so it missed the key elements that underlay the crisis.

For example, in the annual review of the United States, it did not discuss the mortgage problems until the crisis had already happened. In a 2006 study of Iceland, the fund staff had concluded: “Fortunately, in Iceland's case, and as found by the 2006 Article IV mission, hedging behaviour and generally sound balance sheets and asset-liability management made the financial system relatively robust to the recent shocks.” In the next year, the largest Irish banks failed.

This was like a doctor giving good health report to a patient before he dropped of a heart attack.

One of the oft repeated criticism of the fund by its smaller members is the uneven treatment, since the fund could be quite tough on them but less tough on the members with more shareholdings. This was particularly true in the mandatory annual review of the United States, the largest shareholder. The fund did not conduct an FSAP (Financial Sector Assessment Programme) for the United States before 2009 because its authorities did not agree.

The report itself doubted that even if an FSAP review was done, whether the current analytical methodology would have identified the scale of the risk. For example, the 2006 FSAP update for Ireland had concluded that the “outlook for the financial system is positive”.

The annual Article IV surveillance reports on the United States and United Kingdom, the main financial centres, were sanguine on financial innovation and behind the curve on risks. Overall, the fund staff felt that these authorities were on top of their risks. In the 2006 report, the fund staff felt that “the credit rating agencies were uniquely positioned to assess a wide range of structured transactions”. True, they were uniquely positioned, but they told the world that these toxic products were triple-A rated.

In most countries, the person who certificates that a drug is safe and found to be toxic goes to jail. It is remarkable that no rating agency has been punished for their behaviour.

The next question is why did the fund fail to give clear warnings?

The funny thing is that the IMF economic counsellor, Raguram Rajan, had given a famous 2005 Jackson Hole Conference warning that leveraged financial innovation would leave countries more exposed than past experience. His warnings to all the leading central bankers fell on deaf ears and his work was not followed up even within the IMF's own work programme.

It goes to show that if the crowd's mindset goes in one direction, a lone voice would not necessarily stop the tide. Sometimes it takes a crisis to force a change of mindset.

The internal failings were identified as analytical weaknesses, particularly cognitive biases such as group think, intellectual capture and confirmation bias. If the group thinks that financial innovation is good, it becomes very difficult for lone dissenters to say that there are serious risks to be examined. Intellectual capture means that students find it very difficult to argue against the intellectual power of a teacher. This was the position where IMF staff were overly influenced and perhaps in awe of the largest members' reputation and expertise.

Confirmation bias refers to selective attention people tend to focus on what they expect and ignore information that is inconsistent with their theories. If the conventional wisdom thinks that global imbalance was the problem, then there may be failings to look at other areas, such as balance sheet vulnerabilities.

The IMF economists relied heavily on their macro-economic models, but these flow models often did not incorporate balance sheet data and, therefore, underestimated macro-financial linkages. The report also pointed out the fact that stress tests do not reveal second-round effects such as liquidity shocks.

The report also pointed out the organisational impediment in terms of departmental silos, where staff did not share information and did not “connect the dots”. The incentives also failed to “foster the candid exchange of ideas that is needed for good surveillance”.

Finally, to what extent was the fund subject to political constraints? The report quoted staff as saying that there were limits as to how critical they could be regarding the policies of the largest shareholders that “you cannot speak truth to the authorities” since “you are owned by these governments”.

History has not changed. Every wise government must have an independent voice to give “ruthless truth-telling”, one of the key roles for the fund by one of its intellectual founders, John Maynard Keynes.
The IEO has set an example of what should be done for the fund. Perhaps its member countries can learn from this.

Andrew Sheng is author of the book “From Asian to Global Financial Crisis”.