From Outsourcing To Multi-Sourcing
Ed Sperling, 12.28.09, 06:00 AM EST
Much has changed since outsourcing was introduced.
IT outsourcing has been around for decades, but in the past it was a one-for-one handoff. Either a company ran the IT department or an outsourcing contractor did it for them.
Much has changed. Companies are choosing from a menu of options and a list of competitive offerings, with results that still aren't fully understood. To help shed light on what's changing, Forbes caught up with Jamie Erbes, chief technology officer for Hewlett-Packard ( HPQ - news - people ) Software and Solutions.
Forbes: Outsourcing IT is hardly a new concept. What's different this time?
Erbes: We've certainly seen this outsourcing trend in the past, but what we're seeing now is uptake of more selective sourcing. The CIO and IT organization are looking at sourcing some of their operation to cloud providers, but not all of it. They're also looking at ways to keep tabs on the integrity of IT as it all blends back together into the business services that they need to offer back to the business units.
What's driving that change?
A lot of conversations I've had recently with customers is how they can capitalize on the resources from various providers including the Amazons and Rackspaces of the world or enterprise services from companies like HP. How can they take advantage of that sourcing model and put an effective framework above it--one that comprehends IT financial management, for example, or service-level aggregation and management? Those are the questions we're starting to hear.
So there's more CIO involvement in the outsourcing?
Yes. If you go back 20 years, the message behind outsourcing was, "Come and take over my IT." The IT organization handed over responsibility for everything including interaction with the business units. It was not just a portion of IT or a piece of the data center. It was all of IT, and in some cases that included the CIO. The change that we've seen is there's a step toward multi-sourcing. There may be a line cut, for example, between infrastructure outsourcing and applications development. Some of these services are best-of-breed outsourcing selections and a lot of analysts are encouraging clients to do multi-sourcing. But when they outsourced to a sole provider, the management level on top and the reporting and transparency was intact. With multi-sourcing you have silos of management and reporting, limited visibility and service-level agreements in silos.
What's the best way to deal with that?
The next step will be to pull all of that together into business services. There's a layer of service management at the enterprise level that is necessary to do all of the translation from the intricate specific detail around service levels, availability and outages, for example.
What does the corporate IT department do in the future?
Before we used to counsel the client on how to be the best they could be at planning, designing, building and running IT. There's still some of that activity, but they need more of a skill set for sourcing, integrating and managing. That's an evolutionary need now within IT.
And it's no longer just about data, right?
That's correct. The whole concept of portfolio management is taking on a new life in these organizations. It's almost like a product manager role that's evolving within IT. One CIO told me he needs a sales and marketing team--and a product management team. They have to understand what they're crafting in terms of cost models and pricing models back to their business. If you look at the aptitude of the type of person that takes, it is like a product manager. You have to be able to talk about the IT capabilities you have and what you can offer to the business because now the business has choice. The last thing you want is for them to avoid IT. If IT is a hidden-cost overhead that's a pain to deal with, it's going to be avoided. The IT organization has to draw the client in with products and services their business wants to consume. That mitigates the desire for businesses to go out and directly obtain these cloud services or software-as-a-service--basically an end-run around IT.
It used to be a matter of assessing technological capabilities and applying them to a business. Now it appears to be less about the technology.
IT always will have to have a competency for understanding the technology, but it's unlikely they'll have to be the expert on server technology in the future. If they do a smart sourcing strategy, they don't need the server experts. But they will need the platform expert to blend the server and storage and the application types to make sure the outsourcing decision they make around the infrastructure-as-a-service fits well with their application strategy.
Who are you selling this stuff to? Is it the companies or the cloud providers?
Our strategy has three prongs. The first is we are a cloud service provider. The other two are in terms of aligning products and consulting and enablement services for the service provider. We helped Verizon ( VZ - news - people ) craft their compute-as-a-service strategy set, for example. We also help the enterprise business to be a better and wiser consumer of services, and to be a better provider of services internally.
Will the software in a cloud be customized, and if not, what is the penalty?
We think the question should be, "What is the cost of all that choice and heterogeneity in the data center?" The penalty you pay is one of the concerns. Customers need to understand application or workload characteristics and to be able to construct private clouds or pooled infrastructure within their own data centers. They need to manage workload against that target, as well as provision applications out to other cloud providers such as Amazon. If you have several choices, each with different compute styles, that should give you the right granularity so you can run them where they should be run. But too much choice and variety is a bad thing. There are some specialized applications such as airline systems where that's required, but for most it is not.
Aside from those specialized cases, is there a difference from one organization to the next?
Some of the mature organizations--those with a concept of ruthless standardization--have normalized their hardware platforms and their networks and their compute styles. They have a handful of compute styles. That's compared to the immature organizations, which may have grown by acquisition or decisions that were made without a clear sense of architecture. Those are very messy environments. Our challenge is to span both environments and hide some of the complexity.
Ed Sperling is the editor of several technology trade publications and has covered technology for more than 20 years. Contact him at esperlin@yahoo.com.
Monday 28 December 2009
The Cloudy IT Landscape
The Cloudy IT Landscape
Ed Sperling, 12.28.09, 06:00 AM EST
The shift to a utility-based computing model has massive implications for everything we've ever known about IT.
pic
Ed Sperling
Gartner's outlook for the next few years shows a steady migration toward cloud computing, driven at first by cost and then by quality of service. But the bigger issue that emerges from the research house's new report on the effects of cost-cutting and utility-based computing is who's going to be offering what to whom?
The immediate driver for cloud computing on the IT side comes from the economic downturn and the need to cut costs, says Frances Karamouzis, a Gartner research vice president. It's cheaper to outsource some operations to places like India, where labor costs are lower. But over the next couple years, those deals will be renegotiated or revisited as risk-management becomes the big issue.
Article Controls
This shift is massive, both in physical scale and economic impact, and it's tough to make sweeping generalizations. Some CIOs already have a firm grip on risk-management. Others will never care because of their specific business models. But the push toward utility-based outsourcing, which allows companies to turn on and off servers, storage and software, has profound implications for the companies that have provided IT hardware, software and services for decades.
"The competition gets blurred about who buys what from whom," Karamouzis says. "Everyone's business model gets squeezed."
So where is this new competition coming from? First, it's open-source software. Gartner says about 15% to 25% of all software costs is for product support in the way of patches and updates. That has made open source particularly popular in some markets, and the appeal will only grow as IT departments get a firm grip on how they spend money and where those dollars actually go.
The second area of competition is caused by the convergence of software, hardware and services with the emergence of the cloud model and software-as-a-service. That helps explain why large systems vendors have been buying up service companies. IBM ( IBM - news - people ) bought PricewaterhouseCooper's consulting arm, Hewlett-Packard ( HPQ - news - people ) bought EDS and Dell ( DELL - news - people ) bought Perot Systems ( PER - news - people ). But it also shakes up the image of what each company really provides.
"The value is shifting to a relationship-based model that is inherent in the services world," Karamouzis says. "As a result, you could see a company like Accenture ( ACN - news - people ) competing head-to-head with a software company."
But if the real value comes from utility-like service, then how do these companies differentiate themselves from a software company like Oracle, which will also provide service and hardware, or a services company like Accenture, which can establish partnerships to provide everything it doesn't have? And what's to stop service giants from places like India--TaTa Group and WiPro, for example--from moving into the market where they barely had a toehold?
Big changes are coming and so far it's uncertain who will emerge stronger from these shifts. While CIOs enjoy the short-term benefits of pricing benefits and, in many cases, increased service for every dollar spent, the longer-term effects may not be quite so kind to the smaller utility-based service consumers.
Ed Sperling is the editor of several technology trade publications and has covered technology for more than 20 years. Contact him at esperlin@yahoo.com.
Ed Sperling, 12.28.09, 06:00 AM EST
The shift to a utility-based computing model has massive implications for everything we've ever known about IT.
pic
Ed Sperling
Gartner's outlook for the next few years shows a steady migration toward cloud computing, driven at first by cost and then by quality of service. But the bigger issue that emerges from the research house's new report on the effects of cost-cutting and utility-based computing is who's going to be offering what to whom?
The immediate driver for cloud computing on the IT side comes from the economic downturn and the need to cut costs, says Frances Karamouzis, a Gartner research vice president. It's cheaper to outsource some operations to places like India, where labor costs are lower. But over the next couple years, those deals will be renegotiated or revisited as risk-management becomes the big issue.
Article Controls
This shift is massive, both in physical scale and economic impact, and it's tough to make sweeping generalizations. Some CIOs already have a firm grip on risk-management. Others will never care because of their specific business models. But the push toward utility-based outsourcing, which allows companies to turn on and off servers, storage and software, has profound implications for the companies that have provided IT hardware, software and services for decades.
"The competition gets blurred about who buys what from whom," Karamouzis says. "Everyone's business model gets squeezed."
So where is this new competition coming from? First, it's open-source software. Gartner says about 15% to 25% of all software costs is for product support in the way of patches and updates. That has made open source particularly popular in some markets, and the appeal will only grow as IT departments get a firm grip on how they spend money and where those dollars actually go.
The second area of competition is caused by the convergence of software, hardware and services with the emergence of the cloud model and software-as-a-service. That helps explain why large systems vendors have been buying up service companies. IBM ( IBM - news - people ) bought PricewaterhouseCooper's consulting arm, Hewlett-Packard ( HPQ - news - people ) bought EDS and Dell ( DELL - news - people ) bought Perot Systems ( PER - news - people ). But it also shakes up the image of what each company really provides.
"The value is shifting to a relationship-based model that is inherent in the services world," Karamouzis says. "As a result, you could see a company like Accenture ( ACN - news - people ) competing head-to-head with a software company."
But if the real value comes from utility-like service, then how do these companies differentiate themselves from a software company like Oracle, which will also provide service and hardware, or a services company like Accenture, which can establish partnerships to provide everything it doesn't have? And what's to stop service giants from places like India--TaTa Group and WiPro, for example--from moving into the market where they barely had a toehold?
Big changes are coming and so far it's uncertain who will emerge stronger from these shifts. While CIOs enjoy the short-term benefits of pricing benefits and, in many cases, increased service for every dollar spent, the longer-term effects may not be quite so kind to the smaller utility-based service consumers.
Ed Sperling is the editor of several technology trade publications and has covered technology for more than 20 years. Contact him at esperlin@yahoo.com.
Banks set for more belt-tightening in 2010
Banks set for more belt-tightening in 2010
By David Ellis, staff writerDecember 28, 2009: 5:53 AM ETNEW YORK (CNNMoney.com) -- Diminutive expense accounts. Flying coach. The lingering threat of layoffs.
That seems to be the new normal in banking these days. And it's unlikely to change in 2010.
Faced with a flurry of new regulations out of Washington and sluggish loan activity that's hurting revenue, lenders are expected to have little choice but to continue tightening their belts next year.
"I think that focus is already starting," said Blake Howells, director of equity research for Becker Capital Management, an investment firm with about $2 billion in assets.
In some instances, budget cuts could be downright severe.
Southeastern powerhouse SunTrust (STI, Fortune 500), for example, is expected to cut its operating expenses, including staffing and advertising, by $1.15 billion next year, or 17%, based on estimates by research firm SNL Financial.
Banking giant Citigroup (C, Fortune 500), which has already managed to find nearly $20 billion in savings over the past year partly through the sale of some of its businesses, is expected to trim almost another $5 billion from its budget by the end of next year, according to SNL.
Such cutbacks, of course, are hardly a surprise given the turmoil banks have endured over the past year, namely the billions of dollars lost to bad loans.
What's even more troubling however, note experts, is that banks now face a whole new set of fees and rules next year that pose a big threat to their bottom line.
One of the biggest problems is the $45 billion in insurance premiums that banks had to pay to the Federal Deposit Insurance Corp. this year, to help prop up the dwindling fund used to cover bank failures. Banks will have to account for a third of that money in fiscal 2010.
At the same time, banks face a whole new set of new restrictions aimed at protecting the American consumer, including one imposed by the Federal Reserve on overdraft fees. Starting next July, banks will no longer be able to automatically enroll customers in overdraft protection programs, which charge fees when consumers spend more than they have.
Overdraft and non-sufficient fund fees have been a big business for the banking industry. Current projections suggest that lenders will rake in $38.5 billion from those two areas in 2009, according to Moebs Services, an economic research firm.
A big drop in those fees will likely leave most lenders feeling the pinch, note experts.
"I think you are looking at a fairly sizeable blow to revenues," said Seamus McMahon, a long-time industry consultant who runs his own firm McMahon Advisors LLC.
Banks certainly have any number of ways they could save a buck or two, including selling off parts of their business, trimming marketing budgets or telling external consulting firms to take a hike.
But industry experts argue that some lenders may have little choice but to take aim at their biggest source of costs -- employees. On average, salary and benefit expenses tend to make up about half of their operating expenses.
"Over the last year there has been a concerted effort by most financial institutions to bring in expenses through headcount reduction," said Frank Barkocy, director of research at Mendon Capital Advisors, a money manager that invests primarily in bank stocks.
"I think that will be a continued theme as we go forward."
Wall Street firms alone are expected to trim another 32,400 jobs over the next two years, according to estimates published by New York City's Independent Budget Office, a non-partisan agency that reviews the annual city budget.
One problem in all this, note experts, is that lenders have already drastically cut staff levels, and implemented other cost-cutting measures in recent years in an effort to stay ahead of the recession.
Citigroup, for example, has trimmed its worldwide staff by 100,000, or approximately a quarter, over the past two years, partly through the sale of some of its businesses.
The embattled lender also moved to ban off-site meetings late last year, in addition to telling employees to scale back on their use of color copies.
"It's not like these guys have been sitting on their hands for the last couple years," said McMahon.
By cutting too much further, lenders run the risk of going too far and hurting their performance.
And in the face of so many headwinds, don't be surprised if lenders try to cook up a whole new set of fees aimed at revitalizing their business.
"Banks tend to be creative," said Mendon Capital's Barkocy.
Sunday 27 December 2009
2010 preview: The polyglot web
2010 preview: The polyglot web
2010 preview: The polyglot web
Imagine what browsing the web would be like if you had to type out addresses in characters you don't recognise, from a language you don't speak. It's a nightmare that will end for hundreds of millions of people in 2010, when the first web addresses written entirely in non-Latin characters come online.
Net regulator ICANN - the Internet Corporation for Assigned Names and Numbers - conceded in October that more than half of the 1.6 billion people online use languages with scripts not fully compatible with the Latin alphabet. It is now accepting applications for the first non-Latin top level domains (TLDs) - the part of an address after the final "dot". The first national domains, counterparts of .uk or .au, should go live in early 2010. So far, 12 nations, using six different scripts, have applied and some have proudly revealed their desired TLD and given a preview of what the future web will look like.
The first Arabic domain is likely to be Egypt's and in Russia orders are already being taken for the country's hoped-for new TLD. The address HOBЫЙyЧеНЫЙ.pф - a rough translation of "newscientist" with the Cyrillic domain that stands for Russian Federation - can be registered today.
Though they will be invisible to many of today's users, these changes are a bellwether for the web's future. Today Latin-script languages predominate. But before long Chinese will overtake English as the most used language, and web use in other places with scripts of their own, such as India and Russia, is growing fast. The Middle East is spawning new users faster than any other region.
The image below, portraying links between blogs, represents just one facet of the ever-changing shape of the internet. More corrections like the arrival of non-Latin domain names are sure to come as the network underlying everyday life starts to properly live up to its "worldwide" monicker.
New Scientist by Tom Simonite
Imagine what browsing the web would be like if you had to type out addresses in characters you don't recognise, from a language you don't speak. It's a nightmare that will end for hundreds of millions of people in 2010, when the first web addresses written entirely in non-Latin characters come online.
Net regulator ICANN - the Internet Corporation for Assigned Names and Numbers - conceded in October that more than half of the 1.6 billion people online use languages with scripts not fully compatible with the Latin alphabet. It is now accepting applications for the first non-Latin top level domains (TLDs) - the part of an address after the final "dot". The first national domains, counterparts of .uk or .au, should go live in early 2010. So far, 12 nations, using six different scripts, have applied and some have proudly revealed their desired TLD and given a preview of what the future web will look like.
The first Arabic domain is likely to be Egypt's and in Russia orders are already being taken for the country's hoped-for new TLD. The address HOBЫЙyЧеНЫЙ.pф - a rough translation of "newscientist" with the Cyrillic domain that stands for Russian Federation - can be registered today.
Though they will be invisible to many of today's users, these changes are a bellwether for the web's future. Today Latin-script languages predominate. But before long Chinese will overtake English as the most used language, and web use in other places with scripts of their own, such as India and Russia, is growing fast. The Middle East is spawning new users faster than any other region.
The image below, portraying links between blogs, represents just one facet of the ever-changing shape of the internet. More corrections like the arrival of non-Latin domain names are sure to come as the network underlying everyday life starts to properly live up to its "worldwide" monicker.
New Scientist by Tom Simonite
1 comments:
- Ricard said...
- True, the article said: before long Chinese will overtake English as the most used language, and web use in other places with scripts of their own, such as India and Russia, is growing fast. The Middle East is spawning new users faster than any other region.
U.S. high-tech work visa application reaches annual limit
SAN FRANCISCO, Dec. 25 (Xinhua) -- Applications for H-1B, the favorite work visa for high-tech employers in the United States, finally reached the annual cap this week after a slow start in the year because of the economic recession, local media reported on Friday.
There was only light demand for the normally popular visa in April, when the U.S. Citizenship and Immigration Services (USCIS) began to take applications for this fiscal year's quota of 65,000.
The USCIS announced this week that after nine months, employers in the country finally used up the annual quota, the San Jose Mercury News said in a report.
In comparison, filling the same quota took only one day the previous year, the newspaper noted.
The low pace of H-1B visa applications this year showed "how weak the American economy has been this past year," said Carl Guardino, chief executive officer (CEO) of the Silicon Valley Leadership Group, an organization that has more than 200 member companies in the region.
But analysts believed the fact that employers have finally used up the quota may be a good indication for the economy, showing that perhaps high-tech hiring was rebounding.
The H-1B visas are issued to U.S. employers to hire foreign workers in occupations that require theoretical or technical expertise in fields such as science, engineering and computer programming.
The visas, good for three years and renewable for another three, are especially popular with Silicon Valley high-tech companies who use them to attract talent from around the world.
According to Guardino, about 53 percent of engineers in Silicon Valley are foreign born and more than half of the founders or CEOs of new technology companies in the area are also born abroad.
The percentages underscore "the need for talent from around the globe to compete globally," he said.
1 comments:
- Ricard said...
- It is time to apply China's green cards, more opportunities there now!
10 ways to stop theft of jet engines
10 ways to stop theft of jet engines
QUESTION TIME
By P. GUNASEGARAM
And they will work well for any other kind of thefts, too, from overpriced contracts to dubious conversion of land.
WE HAVE our own Tiger scandal. Of all the bizarre things that have been stolen anywhere, anytime, any place, that of two F5 Tiger fighter aircraft engines worth RM100mil from our air force must rank as among the top of the list.
That hefty pieces of equipment can be quietly squirreled out of a high security Royal Malaysian Air Force (RMAF) base and taken all the way to Argentina complete with documentation is a major embarrassment to the country.
More importantly, it is a serious security breach which is no laughing matter, although the event has considerable satirical possibilities and gives weight to that old saying that truth is indeed stranger than fiction.
It takes the spirit of “Malaysia Boleh” to new astronomical heights but for totally the wrong reasons. If only this spirit of ingenuity, innovation and cunning were used for all the right reasons, we would have achieved high-income status a long time ago.
Instead, those engaged in such nefarious and illegal activities seem to be the ones moving up the precarious high-income ladder at a rapid pace, leaving the rest of us gawking up in utter amazement at the means that they have employed to get there.
It materialises too that police reports were made over a year ago — in August last year — even though the engines were discovered to be missing in May.
Why? Only now, after all the publicity, have the police announced that the engines have been traced to Argentina. Why? But we still don’t know if we’ll get them back.
And not only engines were taken away but other aircraft parts. But the avionics equipment — reputedly the most expensive components of a fighter aircraft — is intact. Thank the Lord for small mercies.
Further, it has been announced that a general and 40 others were dismissed from service. Why were they merely dismissed? Is that sufficient punishment for what they may have done? And is there not treason involved when members of the armed forces smuggle out and sell their own equipment?
How is it possible that such a thing can take place even?
Meantime, it was reported that police have released on bail four people, including three low-ranking RMAF personnel, being investigated for the case.
Considering that this involved defence equipment whose new prices are RM100mil, why the hurry to give them bail?
In the wake of all these unanswered questions, we thought it would be useful to enumerate 10 ways to stop the theft of aircraft engines. The methods are good for any other kind of theft too — overpriced contracts, poor contracts, paying for contracts, unauthorised and dubious conversion of land, payment for land conversion — and 1,001 other things you can think of.
In fact, we dare say theft and corruption has come to such a height that it has to be stopped dead in its tracks now — not tomorrow or day after.
Here are our simple, pretty obvious remedies. If only we can find some good men to do it — and it looks like we can’t be sure of getting them even from our uniformed services.
1. Implement a culture of honesty and integrity. The only way this can be done is by example and enforcement. The top must be clean and it must force it down all the way to the rank and file. Honesty must become the norm rather than the exception.
2. Full accountability. Accountability must extend to at least the head of department when widespread and extensive collusion takes place in a department to defraud. Heads must roll and new ones take their place, otherwise you can be sure that action won’t be taken against the culprits.
3. Prompt, fair, efficient, quick investigation and action. There was nothing prompt in this sorry episode except for the speed with which the engines were stolen. The theft was discovered in May last year. By now, the case should have been closed and those responsible should have been severely punished.
4. Stiff punishment. Hopefully from point 3 above, we would have enough evidence to mete out stiff punishment to those responsible befitting the enormity of the crime that they had committed. But let’s not pre-judge. Let’s wait and see who the police charge and how much punishment they get.
5. Openness. We have this tendency to hide our problems. We should tell all sections of government to disclose problems immediately with the threat of disciplinary action if they don’t. Making people wash their dirty linen in public is the surest deterrent to soiling them in the first place.
6. Increasing competency. We need to upgrade competency through all levels of government and put people who are able in charge of all valuable equipment and their upkeep and safe-keeping. Recently, soon after the disclosure of the stolen engines, it came to light that two excavators belonging to a local council are yet to be recovered.
7. Getting good inventory systems. The government should invest in good inventory systems to ensure there is proper tracking and control of all valuable equipment it owns. Of course, following point 7, it must be ensured that there are competent, honest people to run the systems
8. Listen to the Auditor-General. We have heard promises, after the release of the Auditor-General’s Report every year, that those responsible for all that wastage will be brought to book. But unfortunately, we can’t recollect a single case where action has been taken. We still don’t listen to the AG.
9. Introduce whistle-blowing legislation. We must introduce comprehensive whistle-blowing legislation which not only protects those who blow the whistle but encourages people to do so. In fact, it should go beyond that and make it mandatory for all those who know about crime committed to report it to the authorities. If people stood by and watched while thefts were taking place, they should be punished.
10. Check the assets of key people. Police reportedly nabbed some of the offenders in this case because they were living beyond their means. Can’t we do that for a whole lot people? As an aside, we were amazed by a recent case of a former top cop and how his family were fighting over his assets of nearly RM50mil, most of it in cash. A member of the family even said that he amassed his assets because he was an astute investor – in which case he would probably rate higher than Warren Buffett. Should not something like that set alarm bells ringing and police investigating?
If we can follow these 10 measures assiduously, we not only can guarantee that we won’t have another Tiger scandal of our own but we can safely say that we will reduce all other thefts considerably too.
> Like all concerned Malaysians, managing editor P. Gunasegaram is watching to see how this episode ends.
QUESTION TIME
By P. GUNASEGARAM
And they will work well for any other kind of thefts, too, from overpriced contracts to dubious conversion of land.
WE HAVE our own Tiger scandal. Of all the bizarre things that have been stolen anywhere, anytime, any place, that of two F5 Tiger fighter aircraft engines worth RM100mil from our air force must rank as among the top of the list.
That hefty pieces of equipment can be quietly squirreled out of a high security Royal Malaysian Air Force (RMAF) base and taken all the way to Argentina complete with documentation is a major embarrassment to the country.
More importantly, it is a serious security breach which is no laughing matter, although the event has considerable satirical possibilities and gives weight to that old saying that truth is indeed stranger than fiction.
It takes the spirit of “Malaysia Boleh” to new astronomical heights but for totally the wrong reasons. If only this spirit of ingenuity, innovation and cunning were used for all the right reasons, we would have achieved high-income status a long time ago.
Instead, those engaged in such nefarious and illegal activities seem to be the ones moving up the precarious high-income ladder at a rapid pace, leaving the rest of us gawking up in utter amazement at the means that they have employed to get there.
It materialises too that police reports were made over a year ago — in August last year — even though the engines were discovered to be missing in May.
Why? Only now, after all the publicity, have the police announced that the engines have been traced to Argentina. Why? But we still don’t know if we’ll get them back.
And not only engines were taken away but other aircraft parts. But the avionics equipment — reputedly the most expensive components of a fighter aircraft — is intact. Thank the Lord for small mercies.
Further, it has been announced that a general and 40 others were dismissed from service. Why were they merely dismissed? Is that sufficient punishment for what they may have done? And is there not treason involved when members of the armed forces smuggle out and sell their own equipment?
How is it possible that such a thing can take place even?
Meantime, it was reported that police have released on bail four people, including three low-ranking RMAF personnel, being investigated for the case.
Considering that this involved defence equipment whose new prices are RM100mil, why the hurry to give them bail?
In the wake of all these unanswered questions, we thought it would be useful to enumerate 10 ways to stop the theft of aircraft engines. The methods are good for any other kind of theft too — overpriced contracts, poor contracts, paying for contracts, unauthorised and dubious conversion of land, payment for land conversion — and 1,001 other things you can think of.
In fact, we dare say theft and corruption has come to such a height that it has to be stopped dead in its tracks now — not tomorrow or day after.
Here are our simple, pretty obvious remedies. If only we can find some good men to do it — and it looks like we can’t be sure of getting them even from our uniformed services.
1. Implement a culture of honesty and integrity. The only way this can be done is by example and enforcement. The top must be clean and it must force it down all the way to the rank and file. Honesty must become the norm rather than the exception.
2. Full accountability. Accountability must extend to at least the head of department when widespread and extensive collusion takes place in a department to defraud. Heads must roll and new ones take their place, otherwise you can be sure that action won’t be taken against the culprits.
3. Prompt, fair, efficient, quick investigation and action. There was nothing prompt in this sorry episode except for the speed with which the engines were stolen. The theft was discovered in May last year. By now, the case should have been closed and those responsible should have been severely punished.
4. Stiff punishment. Hopefully from point 3 above, we would have enough evidence to mete out stiff punishment to those responsible befitting the enormity of the crime that they had committed. But let’s not pre-judge. Let’s wait and see who the police charge and how much punishment they get.
5. Openness. We have this tendency to hide our problems. We should tell all sections of government to disclose problems immediately with the threat of disciplinary action if they don’t. Making people wash their dirty linen in public is the surest deterrent to soiling them in the first place.
6. Increasing competency. We need to upgrade competency through all levels of government and put people who are able in charge of all valuable equipment and their upkeep and safe-keeping. Recently, soon after the disclosure of the stolen engines, it came to light that two excavators belonging to a local council are yet to be recovered.
7. Getting good inventory systems. The government should invest in good inventory systems to ensure there is proper tracking and control of all valuable equipment it owns. Of course, following point 7, it must be ensured that there are competent, honest people to run the systems
8. Listen to the Auditor-General. We have heard promises, after the release of the Auditor-General’s Report every year, that those responsible for all that wastage will be brought to book. But unfortunately, we can’t recollect a single case where action has been taken. We still don’t listen to the AG.
9. Introduce whistle-blowing legislation. We must introduce comprehensive whistle-blowing legislation which not only protects those who blow the whistle but encourages people to do so. In fact, it should go beyond that and make it mandatory for all those who know about crime committed to report it to the authorities. If people stood by and watched while thefts were taking place, they should be punished.
10. Check the assets of key people. Police reportedly nabbed some of the offenders in this case because they were living beyond their means. Can’t we do that for a whole lot people? As an aside, we were amazed by a recent case of a former top cop and how his family were fighting over his assets of nearly RM50mil, most of it in cash. A member of the family even said that he amassed his assets because he was an astute investor – in which case he would probably rate higher than Warren Buffett. Should not something like that set alarm bells ringing and police investigating?
If we can follow these 10 measures assiduously, we not only can guarantee that we won’t have another Tiger scandal of our own but we can safely say that we will reduce all other thefts considerably too.
> Like all concerned Malaysians, managing editor P. Gunasegaram is watching to see how this episode ends.
1 comments:
- Ricard said...
- Ini “Malaysia Boleh”! Innovative? Sighs! Must Learn the right ways lah!
Top Business School Stories of 2009
Top Business School Stories of 2009
Top Business School Stories of 2009The global financial crisis hammered the MBA job market, school endowments, and financial aid. Some questioned an MBA's value. Bring on 2010
By Alison Damast and Geoff Gloeckler
Business Schools
To call 2009 an interesting year for management education is perhaps an understatement bordering on the extreme. With the global financial crisis taking its toll on everything from the MBA job market and endowments to financial aid and the reputation of the MBA degree itself, 2009 promises to go down in history as a year to forget.
For students and graduates of MBA programs, 2009 was the year that jobs and internship offers became harder to find, even at the top schools; a year when the scarcity of student loans and visas for international students threatened to derail even the best-laid B-school plans; and a year when programs began to rethink the way they teach such subjects as ethics and corporate responsibility. Business school endowments were hit hard and the high cost of tuition was at the fore of every prospective student's thinking.
Of the 10 most popular business school stories on Businessweek.com in 2009, seven directly related to the financial crisis. The others looked at a new competitor on the B-school admissions test front, a GMAT cheating alert in China, and three top MBA programs currently without deans. Take some time to go back over the biggest stories of the year and reminisce. For better or worse, 2009 will be a year that the B-school world won't soon forget.
1. Job Market: The No. 1 concern this year for current MBAs, applicants, and recent grads was the job market. Students worried about finding internships and jobs after graduation, applicants wondered if joining the ranks of the unemployed to enroll in an MBA program was a good idea, and newly minted BBAs and MBAs wondered if their post-B-school jobs would hold up. These fears came out in comments readers left on the stories, with many weighing the pros and cons of accepting jobs with lower salaries and fewer responsibilities. Readers who earned MBAs in 2008 and 2007 also chimed in to voice their concerns, many saying they had yet to land that "dream job" and didn't expect to find it in the near future.
MBA Job Outlook Dims
MBA Tales: Searching for Work in a Recession
MBAs Confront a Savage Job Market
2. Loan Crisis: International students who planned to study at U.S. business schools had to scramble to find a student loan provider in 2009, when many of the loan programs they had used to fund their education disappeared. For years students had depended on the popular Citi Assist and Sallie Mae loan programs, which allowed applicants to obtain up to $150,000 without a co-signer to assume stewardship of the loan should the borrower default. Due to the credit crisis in the fall of 2008, those financial lifelines for many international students were pulled and many schools spent the first six months of 2009 trying to find alternative loan providers. It was a tense few months for foreign applicants, many of whom expressed their frustration in more than 250 comments on stories we published on the topic. For many, the uncertain H-1B visa situation, coupled with the loan situation, made the prospect of studying in America too big a risk to take.
By the time spring rolled around, many schools had come up with solutions for foreign students—often just in time for the deadline deposit to reserve a seat in next year's class.
Loan Crisis Hits the MBA World
World to U.S.B-Schools: Thanks, but No Thanks
3. MBAs: Public Enemy No. 1? Were B-schools responsible for the global economic crisis? It's a question that has consumed much of the B-school world for the better part of a year. In a story we ran in May, experts from inside and outside MBA programs weighed in on the debate. Philip Delves Broughton, a Harvard MBA and author of Ahead of the Curve: Two Years at Harvard Business School (Penguin Group, July 2008), directed blame at B-schools, calling the three-letter acronym, MBA, "scarlet letters of shame," and suggesting they stand for "Masters of the Business Apocalypse." Others, such as Richard Cosier, dean of Purdue's Krannert School of Business (Krannert Full-Time MBA Profile), defended MBA programs, saying, "It is my opinion that business schools will continue to produce students who will be part of the solution, rather than the problem."
Readers, meanwhile, started a rousing debate on the topic via the story's comments. Some completely blamed business schools for the crisis, criticizing everything from teaching techniques and the competitive environment MBA programs seem to foster to the overall value of the degree. Others defended today's B-schools, saying business schools are about as responsible for the economic crisis as engineering schools are for global warming. In the end, the common sentiment seemed to be that business schools deserved some blame, but not all of it.
MBAs: Public Enemy No.1?
4. GRE vs. GMAT: For years, the Graduate Management Admission Council (GMAC) had a virtual monopoly over the admission testing arena at business schools. Its well-known entrance exam, the Graduate Management Admission Test (GMAT), was the standard test used to get into business schools in the U.S. and many other schools around the world for decades. That all changed this year when the Educational Testing Service (ETS) started to encroach into GMAC territory, courting business schools and encouraging them to allow students to submit the Graduate Record Examination (GRE) for admissions. ETS' efforts are starting to pay off. There are now approximately 285 business schools that allow students to submit the GRE in lieu of the GMAT exam, including the University of Pennsylvania's Wharton School(Wharton Full-Time MBA Profile), Harvard Business School(Harvard Full-Time MBA Profile), and New York University's Stern School of Business(Stern Full-Time MBA Profile). ETS says that it expects more than 300 schools to sign on in 2010.
GRE v.GMAT: Battle of the B-School Gatekeepers
5. The Best Part-Time B-Schools: It was an interesting year to survey part-time and executive MBA students. For many prospective students, the thought of spending tens of thousands of dollars on a graduate business degree was frightening. For those already enrolled, fear of job loss and waning corporate support added stress to already intense business programs. At the schools themselves, application numbers were down considerably, as was student satisfaction. Not surprisingly, most student complaints centered on many programs' lack of career services for part-time students. Because more students were paying their own way, they expected the kind of attention that full-time MBAs get in terms of access to recruiters and job openings. This proved to be a real challenge for most business schools, which were unaccustomed to sourcing positions for ultra-experienced EMBA students. When the economy rights itself, interest in part-time and executive MBA programs is expected to rebound, but the need for increased career support is likely here to stay.
A Brutal Wake-Up Call for Part-Time B-Schools
6. The Harvard MBA Oath: As a way to get MBA students talking about ethics, 33 students from Harvard Business School's Class of 2009 approached classmates and asked if they would be willing to sign an oath to "act with utmost integrity" in their professional lives. The idea caught on quickly at HBS and before long, students at other top B-schools followed suit. To date, 1,784 MBA students and graduates have signed the oath via a Web site created by the Harvard students. Readers thought the idea of an MBA oath was a good one in theory, but were skeptical that MBAs—some of whom were responsible for many of the lapses in moral judgment that led to the financial crisis—would follow through on what they agreed to do in the oath.
Harvard's MBA Oath Goes Viral
7. GMAT Cheating in China: China is the latest frontier in GMAC's campaign to prevent students from cheating on the GMAT. In November, a Chinese court barred a Beijing-based Internet site from selling materials such as questions from the GMAT, test prep materials, and PDFs of actual test books. The Web site was owned by Passion Consultancy, a company that coaches Chinese students applying to the top U.S. business schools. As a result of the court ruling, the Web site had to take the copyrighted GMAC material down, pay GMAC $76,000 in compensation, and post a notice from GMAC about the consequences of cheating. It was a victory for GMAC, which has been aggressively pursuing users of such Web sites as well as "proxy" test-takers who are hired to take the exam in place of applicants. GMAC says it will be keeping a close eye on errant Web sites that promote cheating among Chinese GMAT test takers in 2010. The organization has recently filed about 10 administrative complaints with the Chinese copyright office against Web sites that it says illegally carry GMAT preparation material and is constantly scanning for other suspect Web sites around the world, GMAC says.
Crackdown on China GMAT Cheating
8. College Affordability: With college costs spiraling out of control and family financial resources strained to the breaking point, it's no surprise that the issue of college affordability was front and center this year. Nowhere was that more apparent than in a story we published in March about student debt. The story focused on Robert Applebaum, a New York attorney who finished law school owing $80,000 in student loans. His idea was simple: Forgive student loan debt for those earning less than $150,000 a year, a move that he believed would help boost the economy by putting more money in the hands of the middle class. Applebaum's effort, mounted via a Facebook group he started, struck a chord with millions of people who graduated from college with student loans, Readers were eager to share tales of their student loan debts; the story drew more than 400 comments. Some readers criticized Applebaum's idea, saying that it was unrealistic to expect the government to cancel student loan debt, while others praised the concept and the potential it had to jump-start the economy. Applebaum subsequently created a nonprofit to lobby for an overhaul of how higher education is financed in the U.S. Membership in his Facebook group has nearly doubled.
Asking for Student Loan Forgiveness
9. Deans Wanted: As the year comes to a close, three top business schools find themselves in the midst of a dean search. At HBS, Dean Jay Light recently announced that he would be retiring at the end of the 2009-10 school year. At Northwestern's Kellogg School of Management (Kellogg Full-Time MBA Profile), Dean Dipak Jain left his post in September after eight years at the helm.And at Chicago's Booth School of Business (Booth Full-Time MBA Profile), Ted Snyder announced that he would not be seeking a third five-year term as dean and would step down next June. These high-profile vacancies come just as many are questioning the value of the MBA degree, endowments are hurting, and financial markets are in a state of flux. In the world of management education, these are arguably the three most attractive high-profile jobs available—but are also among the most difficult. In the coming months it will be interesting to see how these schools seek their next leader.
Kellogg Dean Steps Down
Harvard B-School Dean Jay Light Stepping Down
Snyder to Step Down as Dean at Chicago Booth
10. B-School Cutbacks: Business schools were hit hard by the Great Recession, with many facing a series of painful declines in endowment earnings and gift-giving, along with state- and university-mandated budget cuts. The ripple effect of endowment declines was even felt at the richest of institutions. At Harvard Business School, where the university's endowment fell to $26 billion, from $36.9 billion, during the fiscal year that ended June 30; the business school laid off 16 staff members this spring. And at Stanford Graduate School of Business(Stanford Full-Time MBA Profile), 49 employees lost their jobs—about 12% of its 400-person staff.At many schools, the decline in the annual operating budget called for even more drastic measures.At Florida State University's College of Business (Florida State Full-Time MBA Profile), budget cuts forced the school to get rid of 110 telephone lines, shut down a computer lab, and cancel some part-time MBA programs.State universities in cash-strapped states such as New York were forced to raise additional revenue by asking students for more money; at the University of Buffalo's School of Management (Buffalo Full-Time MBA Profile), students had to pay an additional $184 in mandatory fees last spring to make up for a $1 million shortfall in the operating budget.
School officials are hoping 2010 will be a slightly easier year, although it could still offer a bumpy ride. A recent survey by the National Association of College and University Business Officers and the nonprofit Commonfund Institute showed that college endowments averaged returns of -19% during the fiscal year, a sign that the hard times haven't yet ended.
Financial Woes Force B-School Cutbacks
Damast is a reporter for BusinessWeek.com. Gloeckler is a staff editor for BusinessWeek in New York.
MEETING GOD'S BANKERS
MEETING GOD'S BANKERS
Meeting God’s bankers
THINK ASIAN
By ANDREW SHENG
RECENTLY, I had the honour of shaking hands with one of God’s top bankers.
He had learnt the art of connecting from someone with Clinton-like charisma. He shook my right hand with a firm grip, with the left hand holding my left elbow, looked me straight in the eye and gave me the impression that he really was completely on my side.
I don’t know about the ladies, but after that I was ready to give him every cent I had to invest until it is all gone.
Why are we all so upset about bankers’ bonuses?
We should never envy the ability of people to make money, but it is the way it was made that made people mad.
It is as if someone had a heart attack, you took him to hospital and paid for the medical bill. Then, the day after, the guy goes out, has a party and you end up again with the bill.
Maybe we should have left the guy on the pavement.
But that is not how one leading Wall Street banker saw it, (http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6907681.ece).
“We’re very important… We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It’s a virtuous cycle. We have a social purpose.”
Last year, governments had no alternative but to rescue banks in a crisis, because their failure would have devastated the real economy. The US Federal Reserve cut interest rates, guaranteed all deposits and converted investment banks into bank holding companies so that they could receive special low interest rate funding.
Are we surprised that with almost zero funding costs, these investment banks are making money hand over fist?
Governments now seem hostage to the “too interconnected to fail” argument. Some bankers seem to have learnt from their Ponzi borrowers – if I borrow US$1,000 from my bank, it’s my problem, but if I borrow US$1bil, it’s the bank’s problem.
The logic of this is the flip side of British comedian Ronnie Barker’s dictum: “Success is relative – the more success, the more relatives.” Loss is also relative, the more loss to more people, the more I can’t lose.
Asians have great difficulty in commenting on the present state of affairs without seemingly criticising our teachers.
After all, we learnt the science of modern banking and financial regulation from the West. I am the first to admit that this crisis has shaken what I learnt about market values to the core.
So where did our teachers go wrong? Financial regulators are the first to preach to bankers to “Know Your Client and Know Your Risks”.
With hindsight, our teachers ignored their own advice because they had not appreciated that the tools and processes that worked for simple retail banking were totally inadequate when the banks had evolved into wholesale banking giants with massive derivative liabilities (hidden in the generally under-regulated shadow banking area).
To be fair, during the Asian crisis, we also failed to understand how Asian corporations were hugely over-leveraged.
The second mistake was also a blind spot. Our teachers failed to appreciate that a fundamental difference between retail banks and wholesale banks is the principal-agent problem.
Historically, banks are regulated because they are agents for public savings. They are the network connectors between the retail public and the corporate and consumer borrowers.
Retail banks are heavily regulated and given a safety net precisely because their failure would have large contagion impact on the depositors and borrowers.
What had happened was that under intense competition, banks could not make money from the declining spread (lending rate minus deposit rate), so they moved into wholesale banking.
They packaged their loans into new derivative instruments to sell and fund themselves and engaged in proprietary trading. In other words, they were less and less agents for their customers and more and more principals in their own right.
This was driven by the idea that banks should be universal and one-stop “financial supermarkets”.
Western regulators had always argued that hedge funds should not be regulated because they are investors, trading on their own account with their own money, so that their failure would not be systemic.
However, when investment banks are trading for their own account, they are actually competing with their customers.
Are they agents (which should be regulated) or are they principals (which should not)? Herein lie the conflict of interest between principal and agent.
No one disputed the old partnership model of merchant banks, because when the merchant banks failed through their proprietary trading, the losses were borne by the partners.
But when investment banks became public companies and also key originators and market makers, their capital inadequacy clearly made the whole system vulnerable.
Should the public guarantee proprietary trading?
If you accept this fundamental principle, why don’t the public guarantee you and me when we do proprietary trading?
Why isn’t a major commodity trader not given a public guarantee, while investment banks are given that safety net?
Arguably, there is now no level playing field between those who do proprietary trading with a public safety net and access to cheap funding and those who don’t.
Hence, it’s not a question of whether banks should be split up under Glass-Steagall because they are too big to fail.
It is because if investment banks primarily engage in proprietary trading, they cannot have their cake and eat it with a public safety net.
To paraphrase Confucius: “Making money should be like frying small squid (or was it fish?) – it must not be overdone.”
·Datuk Seri Panglima Andrew Sheng is author of “From Asian to Global Financial Crisis” and adjunct professor at Tsinghua University, Beijing, and Universiti Malaya.
THINK ASIAN
By ANDREW SHENG
RECENTLY, I had the honour of shaking hands with one of God’s top bankers.
He had learnt the art of connecting from someone with Clinton-like charisma. He shook my right hand with a firm grip, with the left hand holding my left elbow, looked me straight in the eye and gave me the impression that he really was completely on my side.
I don’t know about the ladies, but after that I was ready to give him every cent I had to invest until it is all gone.
Why are we all so upset about bankers’ bonuses?
We should never envy the ability of people to make money, but it is the way it was made that made people mad.
It is as if someone had a heart attack, you took him to hospital and paid for the medical bill. Then, the day after, the guy goes out, has a party and you end up again with the bill.
Maybe we should have left the guy on the pavement.
But that is not how one leading Wall Street banker saw it, (http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6907681.ece).
“We’re very important… We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It’s a virtuous cycle. We have a social purpose.”
Last year, governments had no alternative but to rescue banks in a crisis, because their failure would have devastated the real economy. The US Federal Reserve cut interest rates, guaranteed all deposits and converted investment banks into bank holding companies so that they could receive special low interest rate funding.
Are we surprised that with almost zero funding costs, these investment banks are making money hand over fist?
Governments now seem hostage to the “too interconnected to fail” argument. Some bankers seem to have learnt from their Ponzi borrowers – if I borrow US$1,000 from my bank, it’s my problem, but if I borrow US$1bil, it’s the bank’s problem.
The logic of this is the flip side of British comedian Ronnie Barker’s dictum: “Success is relative – the more success, the more relatives.” Loss is also relative, the more loss to more people, the more I can’t lose.
Asians have great difficulty in commenting on the present state of affairs without seemingly criticising our teachers.
After all, we learnt the science of modern banking and financial regulation from the West. I am the first to admit that this crisis has shaken what I learnt about market values to the core.
So where did our teachers go wrong? Financial regulators are the first to preach to bankers to “Know Your Client and Know Your Risks”.
With hindsight, our teachers ignored their own advice because they had not appreciated that the tools and processes that worked for simple retail banking were totally inadequate when the banks had evolved into wholesale banking giants with massive derivative liabilities (hidden in the generally under-regulated shadow banking area).
To be fair, during the Asian crisis, we also failed to understand how Asian corporations were hugely over-leveraged.
The second mistake was also a blind spot. Our teachers failed to appreciate that a fundamental difference between retail banks and wholesale banks is the principal-agent problem.
Historically, banks are regulated because they are agents for public savings. They are the network connectors between the retail public and the corporate and consumer borrowers.
Retail banks are heavily regulated and given a safety net precisely because their failure would have large contagion impact on the depositors and borrowers.
What had happened was that under intense competition, banks could not make money from the declining spread (lending rate minus deposit rate), so they moved into wholesale banking.
They packaged their loans into new derivative instruments to sell and fund themselves and engaged in proprietary trading. In other words, they were less and less agents for their customers and more and more principals in their own right.
This was driven by the idea that banks should be universal and one-stop “financial supermarkets”.
Western regulators had always argued that hedge funds should not be regulated because they are investors, trading on their own account with their own money, so that their failure would not be systemic.
However, when investment banks are trading for their own account, they are actually competing with their customers.
Are they agents (which should be regulated) or are they principals (which should not)? Herein lie the conflict of interest between principal and agent.
No one disputed the old partnership model of merchant banks, because when the merchant banks failed through their proprietary trading, the losses were borne by the partners.
But when investment banks became public companies and also key originators and market makers, their capital inadequacy clearly made the whole system vulnerable.
Should the public guarantee proprietary trading?
If you accept this fundamental principle, why don’t the public guarantee you and me when we do proprietary trading?
Why isn’t a major commodity trader not given a public guarantee, while investment banks are given that safety net?
Arguably, there is now no level playing field between those who do proprietary trading with a public safety net and access to cheap funding and those who don’t.
Hence, it’s not a question of whether banks should be split up under Glass-Steagall because they are too big to fail.
It is because if investment banks primarily engage in proprietary trading, they cannot have their cake and eat it with a public safety net.
To paraphrase Confucius: “Making money should be like frying small squid (or was it fish?) – it must not be overdone.”
·Datuk Seri Panglima Andrew Sheng is author of “From Asian to Global Financial Crisis” and adjunct professor at Tsinghua University, Beijing, and Universiti Malaya.
No more RPGT for properties sold after 5 yrs of purchase in Malaysia
No more RPGT for properties sold after 5 yrs of purchase in Malaysia
No more RPGT for properties sold after 5 yrs of purchase in Malaysia
08:53, December 24, 2009
Malaysian Prime Minister Najib Razak announced on Wednesday that the Real Property Gains Tax (RPGT) of 5 percent will only be applied to properties sold within five years of purchase.
This implied that a real property seller would not incur the tax if he sold his real property after five years from the date of purchase, said Najib at the swearing-in ceremony of the Federation of Chinese Associations Malaysia (Hua Zong).
By making the decision after receiving appeal from Hua Zong and other industry players, Najib said the Malaysian government would forgo tax revenue amounted to 200 million ringgit (57.14 million U.S. dollars) a year.
The RPGT of 5 percent was announced in the 2010 Budget of the country in October 2009. It was aimed to broaden Malaysia's tax base to finance various development projects and reduce the physical deficits in Malaysia.
With the RPGT applied to less real property sellers, Najib hoped that the move would drive the real estate sector to grow at a speedier rate next year.
Meanwhile, Najib said hotel owners reinvesting in the refurbishment, renovation or expansion of their premises in next five years would receive 60 percent allowance on the extra investment made.
Najib said this was to encourage the hotel owners to tap the great potential in the country's tourism industry, adding that Malaysia was expecting more than 22 million tourist arrivals in the country this year.
Source: Xinhua
08:53, December 24, 2009
Malaysian Prime Minister Najib Razak announced on Wednesday that the Real Property Gains Tax (RPGT) of 5 percent will only be applied to properties sold within five years of purchase.
This implied that a real property seller would not incur the tax if he sold his real property after five years from the date of purchase, said Najib at the swearing-in ceremony of the Federation of Chinese Associations Malaysia (Hua Zong).
By making the decision after receiving appeal from Hua Zong and other industry players, Najib said the Malaysian government would forgo tax revenue amounted to 200 million ringgit (57.14 million U.S. dollars) a year.
The RPGT of 5 percent was announced in the 2010 Budget of the country in October 2009. It was aimed to broaden Malaysia's tax base to finance various development projects and reduce the physical deficits in Malaysia.
With the RPGT applied to less real property sellers, Najib hoped that the move would drive the real estate sector to grow at a speedier rate next year.
Meanwhile, Najib said hotel owners reinvesting in the refurbishment, renovation or expansion of their premises in next five years would receive 60 percent allowance on the extra investment made.
Najib said this was to encourage the hotel owners to tap the great potential in the country's tourism industry, adding that Malaysia was expecting more than 22 million tourist arrivals in the country this year.
Source: Xinhua
1 comments:
- Ricard said...
- Good news!
Five Lessons from the eBay-Craigslist Fight
Five Lessons from the eBay-Craigslist Fight
Five Lessons from the eBay-Craigslist Fight
Entrepreneurs considering a strategic alliance can learn from the legal battle between the online auctioneer and the online classifieds site, says Tom Taulli
By Tom Taulli
Story Tools
Back in 2004, eBay (EBAY) purchased a 28.5% stake in Craigslist for $32 million. The online auctioneer and the online classifieds company planned to expand into global markets in a joint venture as well as share best practices. However, the relationship quickly deteriorated and eBay launched its own classifieds service, Kijiji, in 2007. EBay claims that there was a lack of seriousness to work together, whereas Craigslist says it wanted to remain in control and continue its mostly free services.
Now, the parties are embroiled in dueling lawsuits: EBay says that its stake was unfairly diluted and wants to get its original equity amount back. Craigslist says it's the victim of unfair competitive practices and violations of confidentiality. It wants to get all its shares back and receive damages for lost profits and malicious actions.
Such disputes are often settled out of court because of the expense and distraction involved, but the lawsuits are moving forward. EBay wants to maximize its ownership in Craigslist, which is a valuable asset (with 50 million unique monthly visitors and 19 billion page views) and continue to learn from its operations. As for the Craigslist, it is in the awkward position of having one of its largest competitors as a major shareholder.
As a result, we can get an inside look at big-time dealmaking—gone wrong and wild—that offers some valuable lessons for any entrepreneur contemplating a strategic agreement with another company. Let's take a look:
1. When issuing stock, include shareholder restrictions. The eBay-Craigslist dispute got its start because of a disgruntled shareholder who wanted the venture to focus much more on increasing profits. The shareholder owned a 28.5% stake in Craigslist and was actively shopping the shares from 2003 to 2004. There was nothing Craigslist could do because the shareholder agreement did not have resale restrictions. It would have been advisable for Craigslist to have insisted on a right-of-first-refusal clause, which gives the company and current investors the right to participate in any share sales before others.
In a similar vein, when transferring equity from your own company, make sure you hire a qualified securities attorney to craft strong resale restrictions. These clauses can get extremely complicated. Check out my previous column for what to consider when choosing a lawyer to help you do this.
2. Spell out the responsibilities of each of the partners. The eBay-Craigslist arrangement was a classic strategic relationship. To keep growing, eBay wanted to enter adjacent markets, such as classifieds. By having a board seat and significant equity stake, the company would be in a position to learn about the dynamics of a successful classifieds business. Ultimately, this could lead to joint ventures or even an acquisition, which is what eBay really wanted, according to the legal briefs.
Craigslist also received benefits, such as learning about running successful online marketplaces, dealing with illegal activities in online forums, putting together professional financial forecasts, and operating in foreign markets.
Then why did this relationship break down? It's far from clear. But there are hints. For example, Craigslist did not want to maximize profits or sell out to eBay. It also appeared that the initial share purchase was rushed by eBay to try to prevent Google (GOOG) from gaining a foothold in the classifieds market.
Generally, it's a good idea to spend time crafting your go-to-market strategy for an alliance and coming up with extensive deliverables before you sign off on the transaction. Key questions for both companies to hash out together include: Who will work on the various parts? What are the timelines? How are the capital contributions allocated? What is the profit split? In a way, it's as if both sides are putting together a comprehensive business plan. For more on what to consider, read my previous column.
3. Put an exit plan in place as part of the deal. It could be in the form of a buyout clause. Craigslist could have negotiated the right to purchase back the equity interest, but eBay rejected this. The company saw its ownership in Craigslist as vital and wanted it to be solid. According to its legal brief, Craigslist said there was a "gentleman's agreement" for a buyout arrangement. But such unwritten agreements are usually not enforceable, especially when they are between two sophisticated parties.
4. Protect confidential information. Intellectual property is often the most valuable asset for a company, especially in the tech world. This is why it's critical to negotiate hard on protecting confidentiality as well as limiting the use of information. As for the eBay-Craigslist dispute, there is disagreement on how broad these protections were in the shareholder agreement. Could this information be used for the launch of Kijiji? The courts will likely decide that question.
Besides strong contractual provisions, it is also smart to find other ways to protect intellectual property from the other party. This might include filing a patent with the federal government and making the technology a trade secret (which means taking comprehensive steps to protect its confidentiality).
5. Beware of tough terms. Even though eBay was a minority shareholder, it still managed to get lots of leverage. In the shareholder agreement, the company negotiated protections such as veto rights over the issuance of new shares; the ability to block certain transactions; a right to inspect the books; and a right of first refusal on the sale of the founders' shares. And of course, there was the right to compete in the classifieds market.
Sound one-sided? Keep in mind that companies with more leverage than yours can exact tough terms—and once you agree to them, it's nearly impossible to get rid of them. Of course, Craigslist did make some strong attempts to do so. By using a variety of intricate legal maneuvers, the company was able to reduce eBay's ownership from 28.5% to 24.85% and even eliminate its board seat. Of course, these actions resulted in one of its current lawsuits, which is likely to be expensive and time-consuming.
Had Craigslist negotiated stronger protections—such as a buyout clause—then these maneuverings would likely have been moot. Of course, there is a good chance that eBay would have balked. If so, the best choice for Craigslist may have been to find another buyer for the interest.
The eBay-Craigslist dispute offers a rare glimpse into the complexities of strategic alliances. Yes, even top operators can botch relationships. Like any complex business arrangement, you need strong planning, tough negotiations, and a good exit plan.
Entrepreneurs considering a strategic alliance can learn from the legal battle between the online auctioneer and the online classifieds site, says Tom Taulli
By Tom Taulli
Story Tools
Back in 2004, eBay (EBAY) purchased a 28.5% stake in Craigslist for $32 million. The online auctioneer and the online classifieds company planned to expand into global markets in a joint venture as well as share best practices. However, the relationship quickly deteriorated and eBay launched its own classifieds service, Kijiji, in 2007. EBay claims that there was a lack of seriousness to work together, whereas Craigslist says it wanted to remain in control and continue its mostly free services.
Now, the parties are embroiled in dueling lawsuits: EBay says that its stake was unfairly diluted and wants to get its original equity amount back. Craigslist says it's the victim of unfair competitive practices and violations of confidentiality. It wants to get all its shares back and receive damages for lost profits and malicious actions.
Such disputes are often settled out of court because of the expense and distraction involved, but the lawsuits are moving forward. EBay wants to maximize its ownership in Craigslist, which is a valuable asset (with 50 million unique monthly visitors and 19 billion page views) and continue to learn from its operations. As for the Craigslist, it is in the awkward position of having one of its largest competitors as a major shareholder.
As a result, we can get an inside look at big-time dealmaking—gone wrong and wild—that offers some valuable lessons for any entrepreneur contemplating a strategic agreement with another company. Let's take a look:
1. When issuing stock, include shareholder restrictions. The eBay-Craigslist dispute got its start because of a disgruntled shareholder who wanted the venture to focus much more on increasing profits. The shareholder owned a 28.5% stake in Craigslist and was actively shopping the shares from 2003 to 2004. There was nothing Craigslist could do because the shareholder agreement did not have resale restrictions. It would have been advisable for Craigslist to have insisted on a right-of-first-refusal clause, which gives the company and current investors the right to participate in any share sales before others.
In a similar vein, when transferring equity from your own company, make sure you hire a qualified securities attorney to craft strong resale restrictions. These clauses can get extremely complicated. Check out my previous column for what to consider when choosing a lawyer to help you do this.
2. Spell out the responsibilities of each of the partners. The eBay-Craigslist arrangement was a classic strategic relationship. To keep growing, eBay wanted to enter adjacent markets, such as classifieds. By having a board seat and significant equity stake, the company would be in a position to learn about the dynamics of a successful classifieds business. Ultimately, this could lead to joint ventures or even an acquisition, which is what eBay really wanted, according to the legal briefs.
Craigslist also received benefits, such as learning about running successful online marketplaces, dealing with illegal activities in online forums, putting together professional financial forecasts, and operating in foreign markets.
Then why did this relationship break down? It's far from clear. But there are hints. For example, Craigslist did not want to maximize profits or sell out to eBay. It also appeared that the initial share purchase was rushed by eBay to try to prevent Google (GOOG) from gaining a foothold in the classifieds market.
Generally, it's a good idea to spend time crafting your go-to-market strategy for an alliance and coming up with extensive deliverables before you sign off on the transaction. Key questions for both companies to hash out together include: Who will work on the various parts? What are the timelines? How are the capital contributions allocated? What is the profit split? In a way, it's as if both sides are putting together a comprehensive business plan. For more on what to consider, read my previous column.
3. Put an exit plan in place as part of the deal. It could be in the form of a buyout clause. Craigslist could have negotiated the right to purchase back the equity interest, but eBay rejected this. The company saw its ownership in Craigslist as vital and wanted it to be solid. According to its legal brief, Craigslist said there was a "gentleman's agreement" for a buyout arrangement. But such unwritten agreements are usually not enforceable, especially when they are between two sophisticated parties.
4. Protect confidential information. Intellectual property is often the most valuable asset for a company, especially in the tech world. This is why it's critical to negotiate hard on protecting confidentiality as well as limiting the use of information. As for the eBay-Craigslist dispute, there is disagreement on how broad these protections were in the shareholder agreement. Could this information be used for the launch of Kijiji? The courts will likely decide that question.
Besides strong contractual provisions, it is also smart to find other ways to protect intellectual property from the other party. This might include filing a patent with the federal government and making the technology a trade secret (which means taking comprehensive steps to protect its confidentiality).
5. Beware of tough terms. Even though eBay was a minority shareholder, it still managed to get lots of leverage. In the shareholder agreement, the company negotiated protections such as veto rights over the issuance of new shares; the ability to block certain transactions; a right to inspect the books; and a right of first refusal on the sale of the founders' shares. And of course, there was the right to compete in the classifieds market.
Sound one-sided? Keep in mind that companies with more leverage than yours can exact tough terms—and once you agree to them, it's nearly impossible to get rid of them. Of course, Craigslist did make some strong attempts to do so. By using a variety of intricate legal maneuvers, the company was able to reduce eBay's ownership from 28.5% to 24.85% and even eliminate its board seat. Of course, these actions resulted in one of its current lawsuits, which is likely to be expensive and time-consuming.
Had Craigslist negotiated stronger protections—such as a buyout clause—then these maneuverings would likely have been moot. Of course, there is a good chance that eBay would have balked. If so, the best choice for Craigslist may have been to find another buyer for the interest.
The eBay-Craigslist dispute offers a rare glimpse into the complexities of strategic alliances. Yes, even top operators can botch relationships. Like any complex business arrangement, you need strong planning, tough negotiations, and a good exit plan.
1 comments:
- Ricard said...
- Good lessons to learn: those compete in the existing markets, you would have to fight with bloody competitors like Red Ocean. Use Blue Ocean strategies, like go to new market with existing products or with different technologies in the same markets. Google, Apple and Microsoft, etc are competing in the same market with different core competencies and they succeeded and thrived in blue ocean, no bloody fight!
US BANKS FAILURE REACHES 140
US BANKS FAILURE REACHES 140
Bank failure tally reaches 140
By Ben Rooney, staff reporter December 18, 2009: 8:23 PM ET
NEW YORK (CNNMoney.com) -- Banks in six U.S. states were closed Friday, bringing the total number of failed banks this year to 140, at a cost of over $1 billion to the Federal Deposit Insurance Corporation.
Among the institutions seized by regulators was a so-called "bankers' bank" in Illinois called Independent Bankers' Bank (IBB), which had about 450 client banks in four U.S. states.
Unlike the majority of banks closed this year, IBB did not take deposits from, or make loans to consumers. Instead, it offered a variety of services such as check clearing and credit card operations to community banks around the country that find it too costly to do this on their own.
The FDIC said it created a bridge bank to take over the operations of the Springfield Ill.-based institution.
Earlier this year, regulators seized Atlanta-based Silverton Bank, which was one of the largest U.S. bankers' banks. Silverton often acted as the lead banker on some syndicated commercial real estate loans, and its collapse was seen as hastening the demise of many of its regional partners.
Separately, Illinois state officials closed Citizens State Bank. The FDIC created the Deposit Insurance National Bank of New Baltimore (DINB) to take over the failed bank. DINB will remain open for 45 days to allow depositors of the failed institution to open new accounts elsewhere.
In Florida, Peoples First Community Bank, which operated 29 branches, was closed by the Office of Thrift Supervision (OTS) and the FDIC was named receiver.
Hancock Bank of Gulfport, Miss., will assume the failed bank's $1.7 billion in deposits and will purchase the bulk of its $1.8 billion in total assets.
Two banks in California were also closed.
State regulators seized La Jolla-based Imperial Capital Bank, which operated 9 branches. The FDIC said Los Angeles-based City National Bank will acquire all of the failed bank's $2.8 billion deposits and will buy the bulk of its $4 billion in assets.
The OTS shuttered Santa Monica-based First Federal Bank of California. OneWest bank of Pasadena has agreed to assume the failed bank's $4.5 billion in total deposits and to buy the $6.1 billion in total assets.
The 39 branches of First Federal Bank will reopen on Saturday as branches of OneWest Bank. Depositors can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
The OTS closed the sole branch of New South Federal Savings bank in Irondale, Ala. The failed bank will reopen Monday under the management of Plano, TX-based Beal Bank.
Meanwhile, the FDIC said it was unable to find another financial institution to take over the operations of Atlanta-based RockBridge Commercial Bank. As a result, the agency said it would mail checks to insured depositors on Monday.
RockBridge had an estimated $2.1 million in uninsured funds. But this amount could change once the FDIC obtains additional information from these customers.
The FDIC currently covers accounts up to $250,000.
Beginning Monday, customers with deposits exceeding $250,000 at the bank may visit the FDIC's Web page "Is My Account Fully Insured?"
An average of 11 banks have failed every month this year. The spike in failures has raised concerns about the FDIC's deposit insurance fund, which has slipped into the red for the first time since 1991.
The fund was $8.2 billion in the hole as of the end of September. But that includes $21.7 billion the agency has earmarked for future bank failures.
Friday's closures will cost the FDIC an estimated $1.7 billion.
This year's tally of bank failures is the highest number since 1992, when 181 banks failed. But the total is far from 1989's record high of 534 closures which took place during the savings and loan crisis, when the insurance fund also carried a negative balance. To top of page
Total Failed Bank List: http://www.fdic.gov/bank/individual/failed/banklist.html
By Ben Rooney, staff reporter December 18, 2009: 8:23 PM ET
NEW YORK (CNNMoney.com) -- Banks in six U.S. states were closed Friday, bringing the total number of failed banks this year to 140, at a cost of over $1 billion to the Federal Deposit Insurance Corporation.
Among the institutions seized by regulators was a so-called "bankers' bank" in Illinois called Independent Bankers' Bank (IBB), which had about 450 client banks in four U.S. states.
Unlike the majority of banks closed this year, IBB did not take deposits from, or make loans to consumers. Instead, it offered a variety of services such as check clearing and credit card operations to community banks around the country that find it too costly to do this on their own.
The FDIC said it created a bridge bank to take over the operations of the Springfield Ill.-based institution.
Earlier this year, regulators seized Atlanta-based Silverton Bank, which was one of the largest U.S. bankers' banks. Silverton often acted as the lead banker on some syndicated commercial real estate loans, and its collapse was seen as hastening the demise of many of its regional partners.
Separately, Illinois state officials closed Citizens State Bank. The FDIC created the Deposit Insurance National Bank of New Baltimore (DINB) to take over the failed bank. DINB will remain open for 45 days to allow depositors of the failed institution to open new accounts elsewhere.
In Florida, Peoples First Community Bank, which operated 29 branches, was closed by the Office of Thrift Supervision (OTS) and the FDIC was named receiver.
Hancock Bank of Gulfport, Miss., will assume the failed bank's $1.7 billion in deposits and will purchase the bulk of its $1.8 billion in total assets.
Two banks in California were also closed.
State regulators seized La Jolla-based Imperial Capital Bank, which operated 9 branches. The FDIC said Los Angeles-based City National Bank will acquire all of the failed bank's $2.8 billion deposits and will buy the bulk of its $4 billion in assets.
The OTS shuttered Santa Monica-based First Federal Bank of California. OneWest bank of Pasadena has agreed to assume the failed bank's $4.5 billion in total deposits and to buy the $6.1 billion in total assets.
The 39 branches of First Federal Bank will reopen on Saturday as branches of OneWest Bank. Depositors can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
The OTS closed the sole branch of New South Federal Savings bank in Irondale, Ala. The failed bank will reopen Monday under the management of Plano, TX-based Beal Bank.
Meanwhile, the FDIC said it was unable to find another financial institution to take over the operations of Atlanta-based RockBridge Commercial Bank. As a result, the agency said it would mail checks to insured depositors on Monday.
RockBridge had an estimated $2.1 million in uninsured funds. But this amount could change once the FDIC obtains additional information from these customers.
The FDIC currently covers accounts up to $250,000.
Beginning Monday, customers with deposits exceeding $250,000 at the bank may visit the FDIC's Web page "Is My Account Fully Insured?"
An average of 11 banks have failed every month this year. The spike in failures has raised concerns about the FDIC's deposit insurance fund, which has slipped into the red for the first time since 1991.
The fund was $8.2 billion in the hole as of the end of September. But that includes $21.7 billion the agency has earmarked for future bank failures.
Friday's closures will cost the FDIC an estimated $1.7 billion.
This year's tally of bank failures is the highest number since 1992, when 181 banks failed. But the total is far from 1989's record high of 534 closures which took place during the savings and loan crisis, when the insurance fund also carried a negative balance. To top of page
Total Failed Bank List: http://www.fdic.gov/bank/individual/failed/banklist.html
2 comments:
- Ricard said...
- Read: http://newscri.be/ http://newscri.be/link/969160
- December 22, 2009 7:47 PM
- Ricard said...
- Ironically, Western Powers predicted China's banks would fail; this did not happen, instead many US and European banks failed miserably last year and this year!
FINANCIAL LIBERATION NOT THE ANSWER
FINANCIAL LIBERATION NOT THE ANSWER
Bigger economic crisis ahead unless...by Zakiah Koya
Prof Dr Jomo Kwame Sundram
KUALA LUMPUR (Dec 20, 2009) : A bigger crisis awaits Malaysia if we continue on the path of financial liberalisation and fail to learn the right lessons from the last economic downturn in the late 1990s, warns an economist.
Prof Jomo Kwame Sundaram, who is the assistant secretary general for Economic Development in the United Nations’ Department of Economic and Social Affairs, said financial liberalisation, as it showed in the 1997-98 Asian crisis, is actually the “bleeding of resources from poor to rich countries" and does not lead to development.
Jomo, who was giving a public lecture titled When Will We Ever Learn? last Wednesday, explained that the last financial meltdown not only prompted some rethinking of how to “manage” financial crises but also stimulated some serious rethinking about the character of the development model in Asia.
Lessons were supposed to have been learnt and new policy and institutional frameworks were put into place to avoid another crisis, he said.
However, after all that the country had gone through, the severity of the current crisis begs a question: did politicians and policymakers really learn the right lessons from 10 years ago?
Jomo said that the way Malaysia handled the last economic crisis was not very wise and pointed out that contrary to popular belief, it was palm oil that saved us then by spurring economic growth, and not the pegging of the ringgit to the US dollar.
“The truly local palm oil industry – everything was Malaysian about it from A to Z – which spurred the economic growth. It was not the industrialisation and setting up of the industrial zones,” said Jomo.
He also had harsh words about recent attempts to liberalise the local financial market, saying that it has been proven that this does not bring about development.
Instead, Jomo said, it bled out the capital resources of Third World countries.
“Half of the capital inflows in the year 2007 went to the US due to financial liberalisation,” he said, adding that it was imperative for Malaysia to start planning the real economy and not look to the US model.
"There is an urgent need for much more original and creative development policy thinking in the region," he said, and warned that if we continue on this path (of financial liberalisation), "Malaysia’s development status target of 2020 would be delayed by a decade."
How can Malaysia get itself out of its present economic predicament? The answer for us, Jomo said, lies with palm oil.
“If Brazil can be committed to research on bio-ethanol – fuel made from sugar cane – and today compete in the car world market, there is no reason why we cannot come up with such an answer,” he said.
Climate Change Talks end with ‘noting’
Talks end with ‘noting’
Global Trends by MARTIN KHOR
The Copenhagen Conference ended in some disarray because a secretive meeting of leaders of 26 countries was seen as undemocratic by many, and its Accord was thus only “noted” and not adopted.The Copenhagen Climate Con-ference ended in disarray, though not in complete failure, and the urgent task now is to pick up the pieces and get the global talks going again next year, as there is much at stake.
The Conference foundered in its last hours on the issue of international democracy and global governance.
The question was: Can a “deal” patched up by leaders of 26 countries in a secretive meeting that was not supposed to happen be simply presented to 193 countries to adopt without changes in the dying hours of what is claimed to be the most important international conference ever held?
The answer came in the early hours of Saturday morning, after many hours of high drama in the Conference hall, and it was “no”.
When Danish Prime Minister Lars Rasmussen, who presided over the Conference’s final days, convened the final plenary session late last Friday night, he for the first time, officially announced that a meeting had been taking place of leaders of 26 countries (whose names he did not give) and that a Copenhagen Accord had been drawn up for the Conference to adopt. As he tried to leave the podium after suspending the meeting for an hour, he was stopped by Venezuelan delegate Claudia Caldera on a point of order.
“After keeping us waiting for hours, after several leaders from developed countries have told the media an agreement has been reached when we haven’t even been given a text, you throw the paper on the table and try to leave the room,” she said.
This behavior is against United Nations practice and the UN Charter itself, she said.
“Until you tell us where the text has come from, and we hold consultations on it, we should not suspend this session. Even if we have to cut our hand and draw blood to make you allow us to speak, we will do so,” she added, referring to how she had banged on the table for almost a minute in her effort to get the attention of Rasmussen before he left the podium.
Several developed countries then spoke up to defend the work that had been done by the political leaders in the small group, which should be respected instead of vilified, and urged that the Copenhagen Accord be adopted.
This was also the position of several developing countries, including the Maldives, Ethiopia, Grenada and Lesotho. Notably, China and India — the developing countries that were the most active in the small meeting — did not speak to urge others to adopt the Accord.
When it became clear there was no consensus to adopt the document, some developed countries, led by the United Kingdom and Slovenia, proposed a vote be taken, or else that it be adopted with the names of dissenting countries placed in a footnote.
These “adoption by non-consensus” views were rejected by others who pointed out that it was against the rules of procedure.
After hours of wrangling and a break for consultations, a compromise was reached, in which a Decision was adopted in which the Conference of Parties “takes note of the Copenhagen Accord of 18 December 2009.”
The Accord, with the names of countries that took part in the small meeting, would be attached to the Decision.
In the language of the UN, “taking note” gives a low or neutral status to the document being referred to.
It means that the document is not approved by the meeting (in which case the word “adopts” would be used). “Taking note” also does not connote whether the document is seen in a positive light (in which case the word “welcomes” would be used) or negatively (in which case “rejects” or “disapproves of” would be used).
Following the adoption of the decision to simply “take note” of the document, more hours were spent on how to interpret the “takes note” decision, with the developed countries trying to stretch its meaning.
The US, supported by a number of other developed countries, tried to interpret the decision as allowing for an “opt in” type of arrangement, with countries notifying their intention to join. They tried to garner support for expanding the “takes note” decision into a system that seems styled after a plurilateral agreement, and linked it to the finance issue in an attempt to get support from developing countries.
Ed Miliband, the UK’s Climate Minister, was blunt about linking the funding of developing countries with accepting the Accord.
Those which support the Accord have to register this support.
The concerns he raised must be duly noted “otherwise we won’t operationalise the funds.”
The US wanted an arrangement through which Parties can associate with the Accord. It said there are funds in the Accord, and “it is open to any Party that is interested.”
This implies that Parties that do not register their endorsement of the Accord would not be eligible for funding. This attempted linkage of finance to the acceptance of the Accord is of course not in line with the rules of the Climate Convention, in which the which the developed countries have committed themselves to provide developing countries with the funds needed for them to take climate related actions.
Funding the actions of developing countries does not require that a new agreement or an Accord be established. The actual Copenhagen Accord itself is only three pages in length. What is left out is probably more important than what it contains.
The Accord does not mention any figures of the emission reduction that the developed countries are to undertake after 2012, either as an aggregate target or as individual country targets. This failure at attaining reduction commitments is the biggest failure of the document and of the whole Conference.
It marks the failure of leadership of the developed countries, which are responsible for most of the Greenhouse Gases retained in the atmosphere, to commit to an ambitious emissions target.
While the developing countries have demanded that the aggregate target should be over 40% reduction by 2020 compared to 1990 levels, the national pledges to date by developed countries amount to only 13-19% in aggregate. Perhaps, this very low ambition level is the reason that the Accord remains silent on this issue.
The Accord recognises the broad scientific view that global temperature increase should be below 2 degrees Celsius, and agrees to enhance cooperative action, on the basis of equity.
This echoes the view recently affirmed by India that accepting a target of temperature limit, whether it be 2 or 1.5 degrees, has to come with a burden-sharing framework, with equity as its basis.
The Accord states the collective commitment of developed countries to provide new and additional funds of US$30bil (RM103bil) in 2010-2012 through international institutions. It is unclear how new the funds will be, since the developed countries have already committed to contribute billions of dollars to the World Bank’s climate investment funds.
It also states the developed countries will jointly mobilize US$100bil (RM343bil) a year by 2020 for developing countries.
The Accord is a thin document, containing hardly any new commitments by developed countries, with a weak global goal, and attempts to get developing countries to do more. It is a sad reflection of the Copenhagen Conference that this thin document is being held up as its main achievement.
1 comments:
- Ricard said...
- American hegemony!
An insider’s view of US imperialism
An insider’s view of US imperialism
Review by ABBY WONG
Hoodwinked: An Economic Hit Man Reveals Why theWorld Financial Markets Imploded and What We Need to
Do to Remake them
Author: John Perkins
Publisher: Broadway Books
THERE exists such a profession – Economic Hit Man (EHM). Sounds fascinating but it is an arcane profession known only by few because of its rather unnerving job description – traveling to third world countries blessed with resources that American corporations covet, bribing their leaders into privatisation and modernisation projects that will ravage the environment and result in debts so huge that these countries eventually default in payment and become part of the American colony.
While his experience as an EHM has enabled him to write Confessions of an Economic Hit Man, a worldwide bestseller that exposes the extent to which American corporations will go to maximise profit, it has also given him an insider view to analyse in greater depth the driving forces behind the recent financial meltdown that sent the US and the world spiraling towards disasters.
Perkins’ analysis is stunning and groundbreaking to anyone who cares about the world and world economy, but to bankers and corporate CEOs, it is a bombshell.
In Hoodwinked, his new tell-all book, Perkins reveals how the very system that is perpetrated by EHMs to countries outside of the US is being used within corporate America in the last two decades, destroying an economy that was once regulated and sustainable.
Perkins calls this system mutant capitalism in which CEOs of large corporations carry out unscrupulous, unjust and law-breaking business practices within the US and outside in every corner of the world to maximise short-term profits.
It was a system that began during Ronald Reagan’s administration when American companies were encouraged by its president to conquer the rest of the economic world, hoping to thwart the USSR and Cold War through capitalism. And it did.
As policy makers began to adopt Friedman’s loose monetary economics and turned their back against Keynesian conservative and regulatory economics, corporations merged and acquired to become bigger.
They peddled their ever-increasing products to new markets until the world was saturated with so many goods that they became needless and useless. When demands ran dry and profits were threatened, companies and policy makers came out with a creative solution: loosen the monetary policy to allow consumers easy access to credit so as to expand their ability to spend.
In economic terms, they superficially shifted the whole demand curve thanks to two powerful Friedman economists – Federal Reserve chairman Alan Greenspan and Secretary of the Treasury Robert Rubin, both of whom served under the Clinton administration.
Corporate America moved swiftly from manufacturing to paper finance in the 1990s. Gone were classic American ingenuity and entrepreneurship stories of Dell, Bill Gates and Steve Jobs.
While conglomerates still manufactured and used their monopolistic tentacles to invade every corner of the world, it was investment bankers that reined the corporate world.
The greedy herd from all over the world rushed into the financial world despite the incomprehensible nature of financial products and investment schemes.
Those who fretted were fools because there was so much money to be made from stocks, real estate or any other medium of investment in any part of the world.
The financial world had never been so connected and Alan Greenspan was christened the most powerful person in the world.
It did not take long for the millions of Americans, and millions more outside of the US, who had spent to the hilt and leveraged through the roof to default.
Like EMHs did to third world nations, investment bankers enslaved consumers with debt that they could not pay. By the time the whole system collapsed, the world headed towards calamity.
The whole book reads like a thriller but it is not at all fiction. Some of the events narrated are still fresh in our minds, those who worked in the financial markets during the 1990s and 2000s. While Perkins is harsh in his criticism of corrupt bankers, politicians and EHMs, what piques him the most are the powerful conglomerates that make money at the expense of people and the environment.
The world would be a better place if corporations could be more socially responsible by moving beyond profit-maximisation, materialism and militarism that characterise the current economy to one that produces goods and services that serve the earth as well as its billions of inhabitants.
It is rare to see someone who is deeply involved with the government and corporate world to come forward and disclose the dark netherworld of US imperialism. Perkins’ book is a must-read for it is a work of moral courage and righteousness.
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