SCO submit, non-Western Eurasia rises

https://youtu.be/tUCzHV3Vfe4 https://youtu.be/Hpw5ZMIo8NI https://youtu.be/2jLWJWNtJro https://youtu.be/WyL3x6eUKtI https://youtu.be/1nRtQ8vFC0Q https://youtu.be/y4CZ6FQHcVM

First among equals: Putin and Xi had an official meeting before the Shanghai Cooperation Organisation summit in Qingdao. Sloppy US policies have helped to build a growing China-Russia alliance for a full decade now.- AFP

THE week that was ended with a significant non-Western event often ignored or misunderstood by the West: the latest Shanghai Cooperation Organisation (SCO) summit.

The 18th annual SCO summit in the Chinese port city of Qingdao this weekend is only the fourth held in China. Beijing is relaxed about its role in a growing organisation of eight member countries, six Dialogue Partners and four observer nations – a confidence that suggests considerable clout.

China and Russia are the two hulking members of a group that boasts formal parity, being the conspicuous “firsts among equals.” And as two consecutive US administrations unwittingly drive these giants closer than ever before strategically, Western attention is led astray.

Western reports track President Putin’s travel to Qingdao and the diplomatic niceties exchanged there. At the same time, Western commentators are tempted to dismiss the summit as yet another futile talkfest.

Both approaches are wrong or misplaced. While Xi-Putin exchanges may not be the highlight of this year’s SCO summit, neither are they insignificant.

Sloppy US policies helped to build a growing China-Russia alliance for a full decade now. This is evident enough from the meeting rooms of the UN Security Council to the battlefields of Syria to the South China Sea and the Baltics.

The latest SCO summit reaffirms the trend but adds only marginally to it by way of atmospherics. There are more important developments visible at, if not represented by, the Qingdao summit.

It is the first SCO summit at which both India and Pakistan arrive as full members.

Beginning as the Shanghai Five in the mid-1990s, the SCO has grown steadily and now incorporates three giants – China, Russia and India – in the great Eurasian land mass where both the US and the EU have scant inputs.

With Pakistan coming in at the same time as India as an equal partner, the SCO should be free from any sub-regional turbulence within South Asia.

Turkey is also an SCO Dialogue Partner whose interest in full membership is not without broader implications for the West.

Turkey has considerable military strength and is also a member of Nato, hosting its Allied Land Command and a US air base in Izmir. However, Ankara’s years-long effort to join the EU has been snubbed by Brussels.

Turkish President Recep Tayyip Erdogan has famously mulled over choosing between the EU and the SCO, reportedly preferring the latter. How would the West find a Nato member joining a non-Western group led by Russia and China?

Deep-seated discomfort would be a mild way to put a reaction in Brussels and Washington. To US policymakers, Turkey is a strategic country because of its location as well as its status as a prominent Muslim country.

Both China and Russia have sounded positive about Turkey’s prospective membership of the SCO. Nonetheless, SCO members share an understanding of sorts that Turkey may have to forego its Nato membership before SCO membership can be entertained.

However, Beijing and Moscow may be less concerned than Washington and Brussels about Turkey’s SCO membership with its Nato credentials intact. That immediately makes Turkey more comfortable to be in SCO company.

Turkey has already received what amounts to special treatment within the SCO that no other Dialogue Partner has enjoyed. Last year it was elected as Chair of the SCO’s Energy Club, a position previously enjoyed only by full members.

Erdogan has called the SCO “more powerful” than the EU, particularly in a time of Brexit. Bahrain and Qatar seek full SCO membership; Iraq, Israel, Maldives, Ukraine and Vietnam want to be Dialogue Partners; and Armenia, Azerbaijan, Bangladesh, Egypt, Nepal, Sri Lanka and Syria want Observer status.

Iran already has SCO Observer status and had applied for full membership in 2008. Following the easing of UN sanctions on Tehran, China declared its support for Iran’s membership bid in 2016.

The recent US pullout from the Joint Comprehensive Plan of Action (“Iran nuclear deal”) has further prodded Tehran to “look East.” These days that means China and a China-led SCO.

Iran already trades heavily with China with myriad deals in multiple sectors. Mutual interests abound, far exceeding the basic relationship of oil and gas sales to China.

As Europe treads carefully, mindful of possible new sanctions on Iran following the US cop out, cash-rich Chinese firms take up the slack. US policy is also pushing Iran, among others, closer to China.

In preparing for Prime Minister Modi’s arrival in Qingdao on Friday, Indian Ambassador Gautam Bambawale said both countries were determined to work in close partnership and would never be split apart.

This echoed two main points already shared by Indian and Chinese leaders – that their countries are partners in development and progress, and what they have in common are greater than their differences.

All of this seems set to undo the Quadrilateral Security Dialogue (Quad) that groups the US with Japan, Australia and India, all boasting a democratic system in common in a joint strategic encirclement of China. But India’s relations with China have been on the upswing for half a year now.

The day before Modi arrived in Qingdao, a Quad meeting in Singapore closed on Friday with India expressing differences with the other members. Its Ambassador to Russia Pankaj Saran said the Quad was not the same as its hopes for an inclusive “Indo-Pacific region” (IPR) that did not target any country.

He added that India wanted closer ties with Russia as well in an IPR. Just a fortnight before, Russia’s recent Ambassador to the US Sergei Kislyak said President Trump also wanted closer ties with Russia.

That was only a small part of the roller-coaster ride of international diplomacy in the first half of 2018.

In January Trump condemned the Taliban for a spate of attacks in Afghanistan, vowing that all talks with them were off. Until then, top US diplomats were carefully planning negotiations with the Taliban.

In March, US officials blasted Russia for allegedly arming the Taliban, which Moscow denied. The following month Nato voiced support for Afghan President Ashraf Ghani’s efforts to talk with the Taliban to “save the country.”

Meanwhile Trump’s ramparts of trade barriers in the direction of a trade war would decimate allies from East Asia to Europe. French President Emmanuel Macron expressed a European position in reaching out to China on climate and security issues.

By March the EU had dug in, preparing for the worst of US trade barriers while vowing retaliation. The WTO also warned Washington that it was veering towards a trade war with tariffs on steel and aluminium.

In April, China’s new Defence Minister Gen. Wei Fenghe arrived in Moscow for talks with his Russian counterpart Sergei Shoigu. Wei rubbed it in for Washington, publicly announcing that his visit was to show the US the high level of strategic cooperation between China and Russia.

Two days later the Foreign Ministers of China and Russia expressed similar sentiments. They championed negotiations and sticking to pledges while weighing in against the unilateralism of a unipolar power.

Where China has the SCO, Russia has the Eurasian Economic Union (EAEU).

If any discomfort is felt in Washington, it is from acting as a unipolar power in an increasingly multipolar world.

Source: Behind the headlines by Bunn Nagara is a Senior Fellow at the Institute of Strategic and International Studies (ISIS) Malaysia.



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The Asian financial crisis - 20 years later

https://youtu.be/eocI_JZK5_g

East Asian Economies Remain Diverse

It is useful to reflect on whether lessons have been learnt and if the countries are vulnerable to new crises.

IT’S been 20 years since the Asian financial crisis struck in July 1997. Since then, there has been an even bigger global financial crisis, starting in 2008. Will there be another crisis?

The Asian crisis began when speculators brought down the Thai baht. Within months, the currencies of Indonesia, South Korea and Malaysia were also affected. The East Asian Miracle turned into an Asian Financial Nightmare.

Despite the affected countries receiving only praise before the crisis, weaknesses had built up, including current account deficits, low foreign reserves and high external debt.

In particular, the countries had recently liberalised their financial system in line with international advice. This enabled local private companies to freely borrow from abroad, mainly in US dollars. Companies and banks in Korea, Indonesia and Thailand had in each country rapidly accumulated over a hundred billion dollars of external loans. This was the Achilles heel that led their countries to crisis.

These weaknesses made the countries ripe for speculators to bet against their currencies. When the governments used up their reserves in a vain attempt to stem the currency fall, three of the countries ran out of foreign exchange.

They went to the International Monetary Fund (IMF) for bailout loans that carried draconian conditions that worsened their economic situation.

Malaysia was fortunate. It did not seek IMF loans. The foreign reserves had become dangerously low but were just about adequate. If the ringgit had fallen a bit further, the danger line would have been breached.

After a year of self-imposed austerity measures, Malaysia dramatically switched course and introduced a set of unorthodox policies.

These included pegging the ringgit to the dollar, selective capital controls to prevent short-term funds from exiting, lowering interest rates, increasing government spending and rescuing failing companies and banks. This was the opposite of orthodoxy and the IMF policies. The global establishment predicted the sure collapse of the Malaysian economy.

But surprisingly, the economy recovered even faster and with fewer losses than the other countries. Today, the Malaysian measures are often cited as a successful anti-crisis strategy.

The IMF itself has changed a little. It now includes some capital controls as part of legitimate policy measures.

The Asian countries, vowing never to go to the IMF again, built up strong current account surpluses and foreign reserves to protect against bad years and keep off speculators. The economies recovered, but never back to the spectacular 7% to 10% pre-crisis growth rates.

Then in 2008, the global financial crisis erupted with the United States as its epicentre. The tip of the iceberg was the collapse of Lehman Brothers and the massive loans given out to non-credit-worthy house-buyers.

The underlying cause was the deregulation of US finance and the freedom with which financial institutions could devise all kinds of manipulative schemes and “financial products” to draw in unsuspecting customers. They made billions of dollars but the house of cards came tumbling down.

To fight the crisis, the US, under President Barack Obama, embarked first on expanding government spending and then on financial policies of near-zero interest rates and “quantitative easing”, with the Federal Reserve pumping trillions of dollars into the US banks.

It was hoped the cheap credit would get consumers and businesses to spend and lift the economy. But instead, a significant portion of the trillions went via investors into speculative activities, including abroad to emerging economies.

Europe, on the verge of recession, followed the US with near zero interest rates and large quantitative easing, with limited results. The US-Europe financial crisis affected Asian countries in a limited way through declines in export growth and commodity prices. The large foreign reserves built up after the Asian crisis, plus the current account surplus situation, acted as buffers against external debt problems and kept speculators at bay.

Just as important, hundreds of billions of funds from the US and Europe poured into Asia yearly in search of higher yields. These massive capital inflows helped to boost Asian countries’ growth, but could cause their own problems.

First, they led to asset bubbles or rapid price increases of houses and the stock markets, and the bubbles may burst when they are over-ripe.

Second, many of the portfolio investors are short-term funds looking for quick profit, and they can be expected to leave when conditions change.

Third, the countries receiving capital inflows become vulnerable to financial volatility and economic instability.

If and when investors pull some or a lot of their money out, there may be price declines, inadequate replenishment of bonds, and a fall in the levels of currency and foreign reserves.

A few countries may face a new financial crisis.

A new vulnerability in many emerging economies is the rapid build-up of external debt in the form of bonds denominated in the local currency.

The Asian crisis two decades ago taught that over-borrowing in foreign currency can create difficulties in debt repayment should the local currency level fall.

To avoid this, many countries sold bonds denominated in the local currency to foreign investors.

However, if the bonds held by foreigners are large in value, the country will still be vulnerable to the effects of a withdrawal.

As an example, almost half of Malaysian government securities, denominated in ringgit, are held by foreigners.

Though the country does not face the risk of having to pay more in ringgit if there is a fall in the local currency, it may have other difficulties if foreigners withdraw their bonds.

What is the state of the world economy, what are the chances of a new financial crisis, and how would the Asian countries like Malaysia fare?

These are big and relevant questions to ponder 20 years after the start of the Asian crisis and nine years after the global crisis.

But we will have to consider them in another article.


By Martin Khor Global Trend

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


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

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Andrew Sheng writes on global issues from an Asian perspective.

By Andrew Sheng

Year of living dangerously

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: On the beat Wong Chun Wai The Star



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Internet addiction on the rise among Malaysian youths, Asians one of the most addicted to the Internet

Enough evidence to show links to anxiety, decreased job productivity, says expert.

CYBERJAYA: A 14-year-old boy loved gaming so much that he did not leave his home for half a year until his parents hauled him to therapy for Internet addiction.

This sounds like a story that happens in Japan, China or South Korea, where teenagers have died from binging on their computers. But this case happened right here in Kuala Lumpur.

At the International Society of Internet Addiction (Isia) Conference here, researchers said they were most worried that Malaysian youth were increasingly using the Internet in excess, with local studies revealing that 37% of Malaysian parents felt their children’s online life was interfering with their home and school obligations while 18% said their children were sacrificing basic social activities.

The research, led by child psychologist and Isia spokesperson Dr Norharlina Bahar, found that males under the age of 24, from the Klang Valley, Ipoh or Penang, were the most susceptible to Internet addiction in Malaysia.

“Most spend time on online games and browsing social media and there is enough evidence to show links to anxiety, depression, physical health problems, school disconnection, unemployment, decreased job productivity and social isolation,” she said.

Studies have also found frequent use of the Internet could translate to low self-esteem, depression, boredom and attention-deficit hyperactive disorder.

“There is no denying that Internet eases our life but when it affects your mental health capacity and interferes with your day-to-day work, then you need help,” she added.

In the case of the young boy, Dr Norharlina said he became irritable and angry when he was cut off from the digital world by his parents as part of the treatment.

“This is becoming a bigger problem now,” she said.

The challenge for the academic community is translating their data into tangible policies, as definitions of Internet addiction are still being worked out, she added.

That is something the Malaysian Communication and Multimedia Commission (MCMC) is seeking to address, by adapting research on Internet addiction into guidelines that can be used by school counsellors or pa­rents to identify addiction in adolescents, said MCMC advocacy and outreach senior director Eneng Faridah Iskandar.

“We want to know when is usage going to be a problem. When should I start regulating my child’s use of the Internet? We want to develop self-help tips that parents can use,” she said.

The conference was attended by 200 researchers and psychologists from 10 countries to present their findings on Internet wellness and discuss policies to address the effects of the digital world on users’ health.

Asians one of the most addicted to the Internet

CYBERJAYA: The Middle East, North America and Asia have the highest number of people addicted to the Internet, said Hong Kong University (HKU) Psychology. Department Associate Dean Prof. Dr Cecelia Cheng.

Dr. Cheng, who presented the findings of a HKU study on Thursday said that findings suggest that the more a country experiences traffic jams, air pollution and low life satisfaction, the more likely its citizens will be addicted to the Internet.

She added that out of 31 countries surveyed, European and South American nations had the smallest number of people addicted to the Internet. “Basically if the life satisfaction of a country is low, the people in that country are more likely to be addicted to the Internet, particularly gaming,” she said.

Speaking at the International Society of Internet Addiction (ISIA) conference here, Dr Cheng added that there was a link between countries that have high levels of air pollution and Internet addiction.

“The study suggests that the problem of Internet addiction could be linked with the external environment that drives people indoors. Low life satisfaction also suggests that people look to the Internet for escapism when they are dissatisfied with the outside world,” she said.

Dr Cheng pointed out that less people are addicted to the Internet in Europe because pollution and crime rates are generally lower.

“In Europe, and people there can afford to engage in more outdoor activities than those in the Middle East and Asia,” she said.

She added that improving the quality of environmental conditions might encourage residents to engage more in outdoor activities rather than relying solely on browsing the Internet at home for stress relief.

Malaysia was not surveyed in the HKU study, but local authorities suggested that Internet addiction was a rising trend here too. According to the Malaysian Communication and Multimedia Commission (MCMC), 50.4% of children already have a smartphone by the age of 12 and Malaysians have a 100.4% penetration rate for Internet connectivity and a 143% penetration rate for cellular use.

An ISIA study led by Dr Norharlina Bahar also found that the prevalence of problematic Internet users in Malaysia could be as high as 49.2%, with people spending at least five-hours in front of screens daily.

In last year’s World Happiness Index which measures a country’s general wellbeing, Malaysia ranked 61 out of 161 countries, behind Singapore, Indonesia, Thailand and the Philippines.

By Nicholas Cheng The Star/ANN

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Why the US dollar will remain strong despite cheap money at near zero interest rates?

Relative strength: So far, the US dollar has been strong against emerging market currencies, flat against the euro and weakened relative to the yen. – AFP

THE Fed failed to raise interest rates on Sept 21, giving many markets and fund managers a sigh of relief.

Fed chairman Janet Yellen said the case for an increase has strengthened, but decided for the time being to wait for further evidence of continued progress toward the Fed objectives of maximum employment and price stability. Some analysts felt that any Fed rate increases would be seen as favouring one party in the US Presidential elections.

Caution having over-ridden valour, overall stock markets rallied somewhat, while currency markets moved sideways. Going forward, the futures market think that there is a 60% chance of the Fed raising interest rates in December, after the November Presidential elections.

The key question is whether the dollar will strengthen. So far, the US dollar has been strong against emerging market currencies, flat against the euro and weakened relative to the yen.

There are hoards of analysts trying to forecast short-term and long-term exchange rate movements. Exchange rates are determined by the supply and demand in currency pairs, usually between the dollar and the most traded currencies, such as euro, sterling, yen and other liquid currencies (Australian dollar etc). In turn, the supply and demand for foreign exchange would depend on the current account (trade flows) and capital account (financial flows) of the balance of payments.

If one only looked at trade flows, then exchange rate expectations would depend on whether countries are running large current account surpluses or not, on the basis that a surplus country’s currency would strength. On that basis, one would expect that the Euro should strengthen, because the eurozone is now overall running a current surplus of roughly 3% of GDP. Germany alone is runnng a current account surplus equivalent to 8% of German GDP. However, investor nervousness about the sluggish outlook for the eurozone has keep the euro on the weak side.

One reason is that capital flows are now driving the exchange rate, due to large portfolio flows in search of yield and total returns, as financial assets become more globalised. Theoretically, portfolio flows should be driven by covered interest rate parity, meaning that foreign exchange traders arbitrage in spot, forward and futures markets to equalise risk-adjusted interest rates between countries. Hence, expectations of interest rate differentials between countries matter in shaping exchange rate behaviour.

Interest rate behaviour is determined today largely by monetary policy, which is why global markets are particularly nervous about US Fed interest rate adjustments. Since the US dollar is the world’s benchmark currency, with roughly two thirds of global financial assets measured against the dollar, global financial markets move in expectations of future Fed interest rate increases.

The US remains the dominant military and economic power and is consequently the safe-haven currency. Whenever geo-politics become tense, as is the situation currently, the flight is always towards the dollar.

Furthermore, all signs point towards the US economy performing best amongst the advanced economies, despite overall slower growth post-crisis.

There is enough evidence that the US is already reaching full employment levels at 4.9% unemployment rate, with anecdotal evidence that companies are hiring in anticipation of growing consumer confidence.

There is however a disconnect between US recovery and trade growth. The US consumption pattern has changed from consuming durables towards spending on services, such as new apps and digital entertainment. A partial shift towards manufacturing at home also explains why exports to the US have not increased substantially. With global trade growing slower than GDP, emerging markets are not growing due to the traditional cyclical uptick in exports.

The bad news is that historically, a strong dollar has been associated with slower global growth and vice versa. The explanation is that when the dollar is weak, capital flows out to the emerging markets, stimulating trade and investments. When the dollar is strong, capital flows back to the US and if the US is unable to recycle these flows, global growth weakens.

As the taper tantrum in 2013 showed, when the Fed signalled an increase in interest rates, emerging markets suffered huge turmoil of capital outflows, leading to either interest rate increases or sharp devaluations.

The power of the US to recycle global capital flows is critical to global recovery. Unconventional monetary policy in the US, in the form of near zero interest rates, is not working because the transmission mechanism of cheap money to the real economy is not working. Liquidity remains within the central bank-financial market nexus, with relatively slow lending to finance private sector long-term investments. The private sector is also not confident about the future until there are stronger signs of sustained consumer spending. Furthermore, much-needed public sector investments in infrastructure are being constrained by the large debt overhang and toxic politics.

In short, global capital flight to the dollar, with near zero interest rates, will mean global secular deflation. The reason is that zero interest rate dollar holdings have the same deflationary role as gold in the 1930s. Holding gold was deflationary because spending stops as more and more gold hoarding drained liquidity from the market.

Wait a minute. If the Chinese economy is still growing three times faster than the US in GDP terms (6.7% versus 1.8%), shouldn’t the yuan appreciate? Yes, China is running a current account surplus, but capital outflows are currently running about the same level as trade surpluses, so foreign exchange reserves are flat. Many people think that capital outflows indicate that the yuan will remain weak against the dollar until private sector confidence recovers.

The European and Japanese central banks are running negative interest rate policies precisely because with interest rates relatively lower than the dollar, capital flows will induce lower exchange rates, which will hopefully reflate their economies. The Fed has exactly the same fear as the People’s Bank of China in 2009 when China was growing at more than 10% per year.

Higher Fed interest rates would attract higher capital inflows, pushing up the dollar and inducing even higher asset bubbles, with no inflation in sight.

In sum, much will depend whether the US will use more fiscal stimulative policies and less of unconventional monetary policy to revive productivity growth. It looks as if we will have to wait for a new President to make that strategic call. We will know by November,

By Andrew Sheng

Tan Sri Andrew Sheng is Distinguished Fellow, Asia Global Institute, University of Hong Kong.

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The Zika virus spreading to Malaysia and Singapore

 

 Parents-to-be taking additional precautions against disease

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

https://youtu.be/H5IbCDebdBM

The Zika virus, explained 
 

https://youtu.be/OILBAbva6QA

First Zika patient getting better

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Take precautions when in Singapore 

 

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

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

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

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

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

“If you can avoid visiting Singapore, then avoid.

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

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

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

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

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

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

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

Singapore battling outbreak of Zika virus

https://youtu.be/WR4Fh3GanhI

Foreigners account for half of Singapore cases

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

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

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

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

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

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

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

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Money, culture and the chase for Olympic gold

>
https://youtu.be/-8qdKZhA_Uc

https://www.youtube.com/watch?v=63BmkZeq2mo
https://youtu.be/o2h1d6clCeE

Rio 2016 Olympic Games badminton mixed doubles winners - (from left) silver medallists Chan Peng Soon and Goh Liu Ying of Malaysia; gold medallists Tontowi Ahmad and Liliyana Natsir of Indonesia; and bronze medallists Zhang Nan and Zhao Yunlei of China. PHOTO: REUTERS

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

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

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

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

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

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

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

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

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

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

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

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

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

India also sent its biggest ever contingent of 118 sportsmen and women, and has so far won only a bronze medal in wrestling. Winning an Olympic gold medal is the Holy Grail of sports.

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

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

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

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

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

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

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

Does it work?

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

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

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

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

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

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

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

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

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

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

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

 By June H.L Wong Chief Operating Officer (Content Development) The Star, Malaysia.
The writer was the former group chief editor of The Star Media Group Malaysia. This is the eighth article in a series of columns on global affairs written by top editors from members of the Asia News Network and published in newspapers across the region.

Heartbreak again for Chong Wei, Chen Long takes gold

The medallists (from left): Silver medallist Chong Wei, gold medallist Chen Long and bronze medallist Viktor Axelsen on the podium at Riocentro Pavilion 4. - AZHAR MAHFOF / The Star

https://youtu.be/63BmkZeq2mo

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Medals By Countries - Rio 2016

London 2012 Olympics - Medal Table

Rio 2016 Asia Regional Aug 21 Medal by Countries

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