Chinese tell Cameron: return the treasures Britain looted from China!

 

Britain's Prime Minister David Cameron (L) listens to China's Premier Li Keqiang as the two leaders deliver statements following a signing ceremony at the Great Hall of the People in Beijing on Dec. 2, 2013 Reuters

BEIJING: British Prime Minister David Cameron faced demands for the return of priceless artefacts looted from Beijing in the 19th century on Wednesday, the last day of his visit to China.

Cameron travelled to the southwestern city of Chengdu on the third day of what embassy officials said was the largest ever British trade mission to the country.

British officials say £5.6 billion-worth of deals have been signed so far on the trip, but Cameron has been derided by both Chinese state-run media and the country’s sharp-tongued Internet users.

The prime minister last Friday set up his own microblogging page on Sina Weibo, China’s version of Twitter, attracting more than 230,000 followers by Wednesday. He invited netizens to ask questions, saying that he would aim to reply during the visit.

One of the most popular questions was posted by a prominent Chinese think-tank, the China Center for International Economic Exchanges, which is headed by former vice-premier Zeng Peiyan and includes as its members many top government officials and leading economists.

“When will Britain return the illegally plundered artefacts?” the organisation asked, referring to 23,000 items in the British Museum which it says were looted by the British Army, part of the Eight-Nation Alliance that put down the Boxer Rebellion at the end of the 19th century, a popular uprising against the incursion of European imperial powers in China.

To the Chinese, the ransacking of the Forbidden City, and the earlier destruction of the Old Summer Palace in Beijing in 1860 about which one British officer wrote: “You can scarcely imagine the beauty and magnificence of the places we burnt. It made one’s heart sore to burn them” – remain key symbols of how the country was once dominated by foreign powers.

Even now the ruling Communist party appeals to nationalism to bolster its popularity.

Beijing was outraged by Cameron’s meeting with the Dalai Lama – who it condemns as a dangerous separatist – last year, which led to a diplomatic deep-freeze between the two nations.

Despite the trip being billed as a trade mission, it has widely been seen as an attempt to repair some of the damage caused to China-British relations.

But a leading state newspaper launched an attack on Cameron Tuesday, saying Britain should recognise it is not a major power but “just an old European country apt for travel and study” in an editorial under the headline “China won’t fall for Cameron’s ‘sincerity’”.

The prime minister has taken more than 100 businesspeople with him to China, including the heads of Jaguar Land Rover, Rolls Royce and Royal Dutch Shell and the chief executive of the London Stock Exchange. - By AFP

China won’t fall for Cameron’s ‘sincerity

The UK Prime Minister David Cameron arrived in China Monday, starting his three-day tour in the country. The once halted Sino-British relations, due to Cameron's meeting with the Dalai Lama last year, may see an ice-breaking. This year, China has been actively engaged in relations with Germany and France, which propels the urgency of the Cameron administration to end the chilliness of bilateral relations.

Some analysts say that the UK, France and Germany have reached an unwritten understanding on the issue of the Dalai Lama to provoke China. When the leadership of one country meets with the Dalai Lama, the other two countries develop ties with China.

Such an argument does echo the real situation of China's relations with Europe, especially when yesterday, the British Royal Navy's Chief of Staff, Admiral George Zambellas met with Japanese Defense Minister Itsunori Onodera and supported Japan's stance toward China's recently declared Air Defense Identification Zone in the East China Sea. This has added doubts over Cameron's sincerity in improving ties with China.

Perhaps there is no need to talk about "sincerity" in terms of Sino-British relations. What Cameron does is out of his own political interest and the UK's national interest. His visit this time can hardly be the end of the conflict between China and the UK.

Beijing needs to speed up the pace of turning its strength into diplomatic resources and make London pay the price for when it intrudes into the interests of China.

China has gained some achievement in countering European leaders' moves of meeting with the Dalai Lama. China's strategic initiatives in its relations with Europe have been increasing. The UK, France and Germany dare not make joint provocations toward China over the Dalai Lama issue.

The Chinese government will surely show courtesy to Cameron. But the public does not forget his stance on certain issues. We know that the British government has been making carping comments on Hong Kong implementing universal suffrage for the chief executive's election in 2017. It also gives ulterior support for those who advocate opposition between Hong Kong and the central government. This has added to the negative impression the Chinese public holds toward the UK. Chinese people believe that if London interferes in Hong Kong's transition process of implementing universal suffrage, Sino-British ties can be halted again.

The Cameron administration should acknowledge that the UK is not a big power in the eyes of the Chinese. It is just an old European country apt for travel and study. This has gradually become the habitual thought of the Chinese people.

China has believed in "diplomacy is no small matter," while after years of ups and downs, we have acquired the strategic confidence that "diplomacy is no big matter." China will act accordingly given how it is treated.

Finally, let us show courtesy to Cameron and wish him a pleasant trip. - By Global Time 

Olympics and business

The economic benefits of hosting the Olympic Games have been rather dubious at best

IF you were a hard-core sports fan, you would have woken up at 4am to watch the opening ceremony for the London Olympics this morning. In which case you probably won’t read this until afternoon as you regain some sleep.

Yes, the long-awaited games are upon us and we wait again to see if someone will bring a gold medal home finally. I think our only chance is Lee Chong Wei in badminton who lost the last Olympics final to Lin Dan of China in 2008 and returned with a silver.

What continues to boggle the mind is the cost of the games and how it keeps on going up and up. For Britain, the injection of money into the economy as well as a slew of business opportunities the games must have thrown up must offer some welcome respite from the bad times and even a chance to stem the downturn in the economy.

As former British Prime Tony Blair put it at an event publicising the Olympics: “If you were to pose the question to (fellow bidders) Paris or Madrid or New York ... ‘Would you prefer to be putting on the Olympics right now?’ I’m sure they would say ‘Yes’.”

Well that’s his take on it. The cost of hosting the games is £9.3bil or a massive RM46.5bil. But what is telling is that the original estimated cost was just £2.4bil (RM12bil).

Blair helped to deliver the Olympics to London for 2012 in 2005 over other competitors which included Paris and New York, with Paris being the hot favourite. Given the traditional rivalry between the French and the British, the unexpected victory must have been sweet.

But not so the near quadrupling of the costs in hosting the Olympic games. This has been heavily criticised with people questioning loudly whether London would benefit from hosting the games with costs having increased so much.

Besides, London through its mayor Ken Livingstone, signed off considerable rights to the International Olympic Committee (IOC) which requires cities bidding for the games to sign the contract ahead of the awarding of the games to a particular city.

A lengthy article in Vanity Fair gives a glimpse of such requirements revealed by activist groups. Below is an extract:

“To comply with its terms, London must designate 250 miles of dedicated traffic lanes for the exclusive use of athletes and ‘the Olympic Family,’ including IOC members, honorary members, and ‘such other persons as may be designated by the IOC.’ (These traffic lanes are sometimes called ‘Zil lanes,’ alluding to the Soviet-era express lanes in Moscow reserved for the politburo’s favourite limousines.)

“Members of the Olympic Family must also have at their disposal at least 500 air-conditioned limousines with chauffeurs wearing uniforms and caps. London must set aside and pay for 40,000 hotel rooms, including 1,800 four- and five-star rooms for the IOC and its associates, for the entire period of the games. London must cede to the IOC the rights to all intellectual property relating to the games, including the international trademark on the phrase ‘London 2012.’ Although mail service and the issuance of currency are among any nation’s sovereign rights, the contract requires the British government to obtain the IOC’s ‘prior written approval’ for virtually any symbolic commemoration of the games, including Olympic-themed postage stamps, coins, and banknotes.”

One would be forgiven for thinking that London has surrendered its sovereign rights to the IOC for the period of the games!

Back to business. Lloyds Banking Group chief economist Patrick Foley meantime estimates that the Olympic Games will give a boost of £16.5bil (RM82.5bil), mostly through construction, to the UK economy although how he arrives at that is not clear.

That’s not a lot simply because the direct spend on the Olympics is already £9.3bil and unless such spending has the recurrent ability to reproduce income over many years, it is not justifiable.

Foley points that the bigger impact will be the regeneration of a neglected area of East London which became the Queen Elizabeth Olympic Park. However, it is naïve to think that the area would continue to be as lively after the Olympics and there would be the question of what to do with all that excessive infrastructure post the games.

At best, the benefits of the Olympics for the host city is dubious. At worst, one can argue quite cogently that all that money could have been put for better use in infrastructure and regeneration that would have been more sustainable than for providing facilities for a large and temporary influx of athletes, even if they were world-class, and others.

Meantime, Britain is making the best out of the Olympics. Prime Minister David Cameron just two days before the opening ceremony for the Olympics launched a high-powered attempt to woo global business at a conference to showcase Britain to the world.

Among those for whom the red carpet will be rolled out is a 30-strong delegation from China. Britain is wooing foreign investors in a real big way and using the Olympics to the hilt to do that.

And read what Cameron’s predecessor Blair said to Vanity Fair earlier: “If you said to David Cameron, or anyone involved with this, ‘If you could click your fingers, and the Olympics would be held in Paris instead of London, what would you feel: (a) relieved, or (b) Oh, my God, what did we give that up for?’ it would be b. What you make of the Olympics is in a way up to you. For a country like Britain, it’s a great thing for us to have the Olympics here. We can afford to do the Olympics. We’re Britain. We’re not some Third World country.”

Really? That’s almost a desperate attempt to try and get foreign investments in to help soothe the troubled waters that is the British economy smacks of what many Third World countries would have done to boost their own economies.

A Question of Business by P.GUNASEGARAM

 l Independent consultant and writer P Gunasegaram (t.tp.guna@gmail.com) does not love the Olympics so much as to stay awake until 4am to watch the opening ceremony.

British rivate banks have failed - need a public solution

Private banks have failed – we need a public solution

The Barclays scandal has underlined the City's unmuzzled power. But it also offers a chance to take democratic control

Bob Diamond, who resigned as chief executive of Barclys on Tuesday, is fighting for a payoff of over £20m. Photograph: Dylan Martinez/REUTERS

The greatest danger of the rate-fixing scandal now engulfing the City of London is that it will be managed and defused in the usual way, and nothing will really change. Tuesday's forced resignation of Bob Diamond, the Barclays chief executive, follows well-worn procedures for dealing with crises that potentially threaten those in power: denounce the worst offenders, let a few symbolic heads roll, set up an inquiry under a safe pair of hands, and tweak the regulations to prevent a repetition of the most egregious misdemeanours.

That's been the pattern of the past few years as Britain's establishment has lurched from the disaster of the Iraq war to the disgrace of parliamentary expense fiddling and media phone-hacking (though in the case of Iraq, the only heads to roll were BBC executives and an army corporal). As for the banks that triggered the greatest economic crisis for 80 years, they have been bailed out and featherbedded, with only the loss of the odd sacrificial City baron to show for their reckless mayhem.

But we can't afford to allow such political dereliction again. The racket revealed around the rigging of the crucial Libor inter-bank interest rate – affecting $500tn worth of contracts, financial instruments, mortgages and loans – has underlined the scale of corruption at the heart of the financial system. It follows the exposure of the mis-selling of dodgy derivatives and payment protection insurance, voracious tax avoidance and last month's breakdown of the RBS-NatWest basic payments system.

It's already clear that the rate rigging, which depends on collusion, goes far beyond Barclays, and indeed the City of London. This is one of multiple scams that have become endemic in a disastrously deregulated system with inbuilt incentives for cartels to manipulate the core price of finance. Not only that, but the rigging has been public for years – it was first reported in 2008 – and no action has been taken until now.

That echoes the phone-hacking scandal, which erupted eight years after Rebekah Brooks told parliament News International was bribing the police and her admission was entirely ignored. On Tuesday Barclays sought to implicate Whitehall officials in its rate-rigging in 2008, and an angry Diamond, fighting for a payoff of over £20m, can be expected to go further when he appears before the Commons on Wednesday.

As they did with the Murdoch press, politicians who have abased themselves before the financial elite are now denouncing corrupt bankers and each other for failing to bring them to heel. David Cameron, whose party relies on City donors for more than half its income, wants a narrowly Libor-focused parliamentary inquiry to avoid the bigger picture and focus blame on New Labour's enthusiasm for "light touch regulation" in the runup to the crash.

Ed Miliband is rightly pressing for a much broader, Leveson-style public inquiry into the entire banking system. But the reality is that the whole political class embraced deregulated finance in the boom years. While Tony Blair and Gordon Brown pampered the banks, George Osborne and the Conservatives were demanding still less regulation, and even the Liberal Democrat Vince Cable, now the bankers' scourge, endorsed a financial "light touch".

This is yet another disgrace for the country's governing elites. The new revelation of corruption comes after the exposure of the deception of the Iraq war, fraud in parliament and the police, the criminality of a media mafia and the devastating failure of the banks four years ago. It could of course have happened only in a private-dominated financial sector, and makes a nonsense of the bankrupt free-market ideology that still holds sway in public life.

Political and business powerbrokers insist it's all a problem of leadership, bad apples and a culture that has gone awry. But such cultures are generated by structures and systems – and in the case of the City, deregulated short-term profit maximisation has as good as required them. It's certainly necessary to have a clearout of City bosses, prosecutions and wide-ranging inquiries, but only far-reaching change will clear this cesspit.

The financial system has already failed at huge economic and social cost. It has been shown to be corrupt, incompetent, rapacious and economically destructive. The City's claims to be an indispensable jobs and tax engine for the British economy are nonsense: the bailout costs of 2008-9 dwarfed the financial tax revenues of the boom years, which were below those of manufacturing even at their peak.

In fact, the banks are pumped up with state subsidies and liquidity that they are still failing to pass on in productive lending five years into the crisis. A crucial part of the explanation is the unmuzzled political and economic power of the City: its colonisation of Whitehall and public life, effective grip on its own regulation, revolving-door pull on politicians and civil servants, and purchase of political parties. Finance has usurped democracy.

The crash of 2008 offered a huge opportunity to break that grip and reform the financial system. It was lost. The system was left as good as intact, and even the part-nationalised banks, RBS and Lloyds, have since been run at arm's length to fatten them up as quickly as possible for re-privatisation (savage RBS cost-cutting lies behind its humiliating performance last month), instead of as motors of investment and recovery.

The rate-rigging scandal now offers a second opportunity to build the pressure for fundamental change. That's hard to imagine being carried out by a coalition dominated by the City-funded Tories, but Labour has also yet to break fully with its pre-crisis economic model.

Tougher regulation or even a full separation of retail from investment banking will not be enough to shift the City into productive investment, or even prevent the kind of corrupt collusion that has now been exposed between Barclays and other banks. As a report by Manchester University's Cresc research team argues this week, the size and complexity of the modern banking system makes it "near ungovernable".

Only if the largest banks are broken up, the part-nationalised outfits turned into genuine public investment banks, and new socially owned and regional banks encouraged can finance be made to work for society, rather than the other way round. Private sector banking has spectacularly failed – and we need a democratic public solution.

• This article was amended on 4 July 2012. The original misspelled Rebekah Brooks's name as Rebecca. This has been corrected.

• • Seumas Milne  guardian.co.uk,
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Debt crisis in Europe will affect rest of the world

The economic crisis in Europe is deepening and may get worse, with worrisome effects on the rest of the world.

Eurozone crisis: high-stakes gamble as David Cameron warns Greek voters.

David Cameron and European Commission president José Manuel Barroso talk before a session at the Nato summit in Chicago. Photograph: Pablo Martinez Monsivais/AP

THE economic situation in Europe has worsened considerably in the past week, giving rise to a very worrisome situation.

The ramifications of a full-blown crisis are serious not only for Europe but also the rest of the world.

The recent Greek elections saw the citizens proclaiming their anger towards the austerity policies tied to the European-IMF bail-out package, by repudiating the two major parties and giving the small anti-austerity Syriza party second place.

The elections came in the midst of a greatly deteriorating condition. Greece has 22% unemployment, 50% youth unemployment, GNP is falling steeply, and public debt will remain high at 160% of GDP next year despite the recent bailout and debt-restructuring measures.

The leader of Syriza, Alexis Tsipras, who swept to the forefront of Greek politics on the wind of protest against the austerity measures imposed by creditors, wants to re-negotiate the terms of the bailout.

He thinks his insistence on this will eventually force the creditors to change the terms, with Greece remaining in the Eurozone.

But many analysts think that the response to this demand from the EU and IMF would be to stop further loans and force Greece to exit the Euro. In a second election in mid-June, Syriza is expected to do even better and a messy Greek loan default and Euro exit are now seen as more than just possible.

In a Eurozone exit, Greece would re-introduce a local currency, and after Greeks change from their Euros, a depreciation of the new currency is expected to happen.

News report indicate that some capital flight from Greece is already taking place, as Greeks fear that their present Euro-denominated assets would lose value after conversion to the local currency.

Meanwhile, Spain was last week desperately trying to avoid a run on banks after the government was forced to partly nationalise Bankia, the second largest bank, followed by rumours of such a run.

The value of bad loans held by the banking sector rose one third in the past year to 148 billion Euro and Moody’s downgraded the credit rating of many Spanish banks.

The Spanish finance minister Luis de Guindos said the battle for the Euro is going to be waged in Spain, implying his country is now in front in trying to prevent the Greek crisis from infecting other European countries and bringing down the Euro.

The spreading crisis throws into doubt the policies in most European countries that have in recent years focused on drastically cutting government spending to reduce the budget deficit in an attempt to pacify investors and enable a continued flow of loans.

This reversed the coordinated policy of fiscal reflation that the G20 leaders agreed on in 2009 to counter the global crisis. It contributed to the rapid recovery.

Since then economists and politicians alike have been debating the merits of Keynesian reflationary policies versus a resumption of IMF-type fiscal austerity.

The movement towards recession in Europe as a whole and deep falls in GNP in bail-out countries like Greece has boosted the arguments of the Keynesians.

But key leaders such as Angela Merkel of Germany and David Cameron of Britain are still convinced of the need to stick to austerity.

The victory of the new French President Francois Hollande and the stunning polls performance of the Syriza party in Greece indicate that the public wind has shifted radically against austerity, and that a change may be on the cards.

The stopping of loans to Greece would lead to an economic collapse, with government debt default, bank runs, re-denomination of local contracts to local currency and default on external contracts denominated in euro, in a scenario painted by Wolf.

A Greek exit could trigger bank runs and capital flight in Portugal, Ireland, Italy and Spain and beyond, causing collapse in asset prices and large GNP falls.



A decisive European response is needed, such as the European Central Bank providing unlimited loans to replace money taken out in bank runs, capping of interest rates on sovereign debt, Eurobonds and abandoning austerity-centred policies.

But if these policies are not taken, the Eurozone may disintegrate, with one study suggesting GNP falls on 7% to 13% in various countries, and if a full Eurozone break up takes place there could be a freeze in the financial system, a collapse in spending and trade, many lawsuits and Europe facing a situation of political limbo.

The impact on the world would be worse than the Lehman collapse. Though the implication is that this should not be allowed, a Greek exit would greatly increase the likelihood of these dangers.

If Greece leaves, the Eurozone will have to change fundamentally but if that is impossible, large crises will be repeated in a nightmare.

There would have to be a choice between a stronger union of European countries (which many do not like) or endless crises in future, or a break up now. No good choices exist, concludes Wolf.

The scenarios and predictions detailed above in the Wolf article are pessimistic, but may also be realistic not only because of the current economic situation, but also the apparent lack of conditions for a political solution.

Watching from the sidelines, with no ability to influence developments, many in the developing countries are disturbed by the turn of events. It will likely lead to a weakening of the global economy at best and a full blown crisis at worst, with the developing countries at the receiving end in terms of trade downturn, financial reverberations, and declining incomes and jobs.

It is apparent, once again, that a global forum should exist where all countries can discuss developments in the global economy and contribute their views on what needs to be done.

In the inter-connected world, policies and events in one part (especially in the core countries) affect all others.

 

 Global Trends By MARTIN KHOR

Related posts:

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The euro crisis just got a whole lot worse 

Unemployment Fuels Debt Crisis
Stop the banks from gambling! 

 

UK bank governor warns of eurozone debt crisis 'storm'; Eurozone 'very close to collapse'!

The Bank of England has cut its growth forecast for this year to 0.8% from 1.2%, saying the eurozone "storm" is still the main threat to UK recovery.

The eurozone was "tearing itself apart" and the UK would not be "unscathed", said its governor Sir Mervyn King.

He also confirmed that the Bank has been making contingency plans for the break-up of the euro.

The rate of inflation will remain above the government's 2% target "for the next year or so", the Bank said.

Sir Mervyn was presenting the Bank's quarterly inflation report.

He told a news conference that the euro area posed the greatest threat to the UK recovery, and there was a "risk of a storm heading our way from the continent".

"We have been through a big global financial crisis, the biggest downturn in world output since the 1930s, the biggest banking crisis in this country's history, the biggest fiscal deficit in our peacetime history, and our biggest trading partner, the euro area, is tearing itself apart without any obvious solution.

"The idea that we could reasonably hope to sail serenely through this with growth close to the long-run average and inflation at 2% strikes me as wholly unrealistic," Sir Mervyn said.

“Start Quote

European policymakers, I suspect, will not rush to thank him for his kind and timely advice”

Stephanie Flanders Economics editor

• Read more from Stephanie
• Flanders: Sir Mervyn, the UK and the euro
• PM: Euro to 'make-up or break-up'
• UK unemployment falls by 45,000

A 'mess'

Andrew Balls, the managing director in London of global investment firm Pimco, said it was reasonable for Sir Mervyn and other policymakers to plan for a Greek exit.

"Yes, maybe they should plan for an exit, but the thing is, speculating about it can make the event more likely, so the Europeans really do have a mess there," he told the BBC.

"If Greece is to slide out of the euro and collapse, how are they going to protect Ireland, Portugal, Spain and Italy?"

Separately, Prime Minister David Cameron also spoke of the financial storm clouds across Europe, warning that eurozone leaders must act swiftly to solve its debt crisis or face the consequences of a potential break up.

He said during Prime Minister's Questions in the House of Commons: "The eurozone has to make a choice. If the eurozone wants to continue as it is, then it has got to build a proper firewall, it has got to take steps to secure the weakest members of the eurozone, or it's going to have to work out it has to go in a different direction,

"It either has to make up or it is looking at a potential break up. That is the choice they have to make, and it is a choice they cannot long put off."

The Bank's report said, however, that the eurozone crisis was not the only issue weighing on the UK economy, with volatile energy and commodity costs, and the squeeze on household earnings also having an impact.

Andrew Balls, of global investment firm Pimco says, "a disorderly outcome for Greece is going to be bad for the global economy". 

It all meant that the UK economy would not return to pre-financial crisis levels before 2014, Sir Mervyn said.

Nevertheless, he remained optimistic about the longer term. "We don't know when the storm clouds will move away. But there are good reasons to believe that growth will recover and inflation will fall back," he said.

On quantitative easing, he said that no decisions had been made whether or not to continue pumping money into the economy. The last stimulus programme was still "working its way through the system".

'Outlook is probably better'
 
Sir Mervyn's comments came on the day that official unemployment figures showed a fall in the jobless rate, underlining recent surveys that the private sector had become more confident about hiring labour.

He said the fall in joblessness was consistent with the expected gradual recovery in the UK economy.

But Graeme Leach, chief economist at the Institute of Directors, said of the Bank's report: "Talk about kicking an economy when it's down.

"On top of the euro crisis and a double-dip recession, the Bank of England is now saying inflation may not fall fast enough to permit more quantitative easing.

"Actually we think the inflation outlook is probably better than the Monetary Policy Committee (MPC) thinks, with the impact of the euro crisis, declining real incomes and weak money supply growth suggesting inflationary pressures may recede later this year and into 2013.

"After many years of underestimating inflationary pressure let's hope the MPC is now making the opposite mistake by overestimating it".

Ed Balls, Labour's shadow chancellor, said: "The Bank of England has once again slashed its growth forecast for Britain, but despite this the government says it will just plough on regardless with policies that are hurting but not working.

"The governor is right to warn of a coming storm from Europe. That is why we warned George Osborne not to rip up the foundations of the house and choke off Britain's recovery with spending cuts and tax rises that go too far and too fast.

"What happens in the eurozone in the coming weeks and months will have an impact on our weakened economy," Mr Balls added.-  BBC

Eurozone was 'very close to collapse'

Eurozone was 'very close to collapse'

 

17 May 2012Last updated at 00:36 GMT

A European Central Bank board member has conceded the ECB may have "saved" the eurozone banking system and eurozone economy in Autumn 2011 by providing one trillion euros of emergency loans to hundreds of European banks at an interest rate of just 1%.

ECB Executive Board member, Benoit Coeure, told Robert Peston: "We were very close to a collapse in the banking system in the euro area, which in itself would have also led to a collapse in the economy and deflation, And this is something that the ECB could not accept."

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Fragile British economy enters double-dip recession

LONDON, April 25 (Xinhua) -- Britain's economy has fallen into double-dip recession after official figures showed its economy shrank in the first quarter this year.

The Office for National Statistics (ONS) said Britain's gross domestic product (GDP) contracted 0.2 percent in the first three months 2012, meaning the country has slipped back into recession.

Technically, a recession occurs after two consecutive quarters of negative growth. The ONS figures said Britain's GDP in the last quarter of 2011 dropped by 0.3 percent. Britain last experienced recession in 2009.

A HEAVY BLOW

The worse-than-expected economic growth figure has dealt a heavy blow for the ruling coalition led by Prime Minister David Cameron.

The prime minister and Finance Minister George Osborne were "very disappointed" at the figures.

Cameron said: "I don't seek to excuse them. I don't see to try to explain them away. There is no complacency at all in this government in dealing with what is a very tough situation that frankly has just got tougher."

Osborne in his March budget forecast growth of 0.8 percent this year and 2 percent next year. In 2014, 2.7 percent was forecast, followed by 3 percent growth the following years.

The current 0.2 percent contraction in GDP is bad for the coalition government as it desperately seek to grow the economy and eliminate the country's large budget deficit over the next five years.

The government is set to unveil new measures to further limit public spending as part of the government's efforts to meet its austerity targets. Under the new rules, government departments will have to set aside 5 percent of their annual budget to cover unexpected expenses in a bid to discourage them from asking for more money from the central government when emergencies arise.

Osborne said: "It's a very tough situation when you're recovering from these enormous debts that Britain built up in the good years."

Cameron added it was "painstaking, difficult" work, but the government world stick with its plans and do "everything we can" to generate growth.

Labor party leader Ed Milliband said the figures were catastrophic, blaming the government's economic policies for landing the country back in recession.

A GLOOMY OUTLOOK

The latest data from the ONS is consistent with a report released by the OECD predicting the British economy would shrink in the first quarter of 2012, taking it back into recession.

Meanwhile, economists and research institutes have warned that Britain's economy will continue to struggle with factors such as high inflation, rising unemployment and uncertainty in its exports market, which is strongly affected by eurozone debt.

According to the ONS, the recession was mainly driven by a sharp fall in construction sector, which contracted 3 percent and 0.2 percent in the last two quarters. At the same time, the manufacturing sector failed to return to growth.

The services sector, which accounts for a third of the economy, grew only 0.1 percent in the first quarter this year, after a decline of 0.1 percent in the previous quarter.

Production industries output also declined 0.4 percent in the first quarter of this year, and 1.3 percent in the previous quarter.

The latest report issued by the Ernst & Young Item Club said Britain's jobless rate is forecast to rise to 9.3 percent in the middle of next year from the current 8.4 percent, with the number of those seeking work rising to almost 3 million.

Britain's Consumer Price Index (CPI), a major gauge for inflation, will reach 2.8 percent this year and drop to 2.1 percent next year.

The country's consumer spending power continued to deteriorate in March, dropping by 1.1 percent compared to a year earlier, reaching the lowest level since February 2011. - Xinhua

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Eurozone unemployment hits new record

Unemployment is at the highest rate since the euro was launched in 1999

The jobless rate in the 17 countries that use the single currency was 10.4% in December, unchanged from November's figure which was revised up from 10.3%.

Some 16.5 million people were out of work in the eurozone in December, up 751,000 on the year before.

The highest unemployment rate remains in Spain (22.9%), while the lowest is in Austria (4.1%).

Unemployment has been rising throughout 2011, as the debt crisis in the region has continued. In December 2010, the unemployment rate in the euro area was 10%.



Investment delays
 
Guillaume Menuet, economist at Citigroup, said he expected the number of people out of work to increase throughout 2012.

"If you think about the direction of employment expectations that you see across various business surveys, the outlook for employment doesn't look particularly enticing, simply because the uncertainty is very high.

“Start Quote

Much energy and argument has been spent on this agreement. It is questionable, however, whether it will have much influence on the immediate crisis. ”

Gavin Hewitt BBC Europe editor

 

"In many cases you find firms continuing to delay investment projects. For those that are still making profits, hiring is being frozen, and for those which are under pressure to hit results or losing money, job losses are becoming the only solution that they have," he said. 

In the 27 EU countries, the unemployment rate was 9.9% in December, with 23.8 million people out of work. November's figure was also revised up from 9.8% to 9.9%.

The biggest increases over the past year were seen in Greece, Cyprus and Spain.

The largest falls took place in Estonia, Latvia and Lithuania.

Deteriorating situation

  The issue of jobs and economic growth was a key area for discussion at this week's summit of EU leaders in Brussels.

On Monday, figures showed that the Spanish economy shrank by 0.3% in the last quarter of 2011. It is now widely expected that Spain will enter recession in the first quarter of this year.

Also on Monday, France cut its growth forecast for this year to 0.5% from 1% "to take into account the deterioration of the economic situation".

At the Brussels summit, 25 of the 27 member states agreed to join a fiscal treaty, aimed at much closer co-ordination of budget policy across the EU to prevent excessive debts accumulating.

The UK and the Czech Republic did not sign up to it. UK Prime Minister David Cameron said he had "legal concerns" about the use of EU institutions in enforcing the treaty, while the Czechs cited "constitutional reasons" for their refusal.

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London Bridge is falling down !

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WHY NOT? By WONG SAI WAN

The recent riots in Britain have given this nursery rhyme new significance about all that is wrong, but sadly it is nothing new.
Image via Wikipedia

THE world was shocked to see thugs, many barely in their teens, rioting and looting in various cities in England, which many Malaysians consider a heaven, with some unabashedly saying that going there is “balik kampung” (going back to the hometown).

The horror of the whole thing was brought even closer to home by the video clip of Malaysian student Mohd Asyraf Rafiq Rosli being robbed by the rioters after he had been assaulted. It was uploaded onto YouTube for the world to see, and then picked up by all TV stations.

The assault and robbery of Asyraf and the burning of a century-old furniture shop in Hackney were the main haunting images of the riot.

British Prime Minister David Cameron was quick to recall Parliament for an emergency session, where he condemned the rioters and at the same time dismissed the mid-summer nightmare as greed and thuggery.

He rejected any suggestion that his government’s budgetary cuts was the cause of the riots, and declared “all-out war” on gangs, which he blamed for fuelling four nights of frenzied looting, saying they were “a major criminal disease that has infected streets and estates across our country”.

“This has been a wake-up call for our country. Social problems that have been festering for decades have exploded in our face,” he said, adding that a redoubling of efforts to tackle broken families, welfare dependence and educational failure was needed.



“Do we have the determination to confront the slow-motion moral collapse that has taken place in parts of our country these past few generations?”

But has this come a little too late?

Well-known London social worker Sheldon Thomas, an ex-gang member who runs a mentoring programme, pointed out that British society is “broken” and the government action may be too late.

“People like me have been saying this for decades,” he said. “People are angry, people are frustrated. There are no jobs, there is no aspiration.”

Thomas and many of his fellow youth leaders said Cameron’s government was only reacting to the visuals that were seen all over the world, especially when the rioting and looting affected the wealthier part of the cities.

Youth and social workers have been sounding the warning for years but successive British governments were more interested in projecting the growing materialistic part of Britain while the inner city problems were swept underneath the proverbial carpet.

People like Thomas are right. Go to YouTube and type “Moss Side” to see hundreds of CCTV video clips by the Greater Manchester Police on gang problems there.



National Geographic produced an excellent series on Manchester’s underworld, titled Gunchester. It seems there are more guns in this former industrial centre than in any other city in Britain.

Moss Side, the centre of these violent gangs, is one of many inner city projects started in the 1950s after World War II that have turned into a social mess. There used to be thousands of council flats in Moss Side and neighbouring Hulme, where hundreds of Malaysian students stayed in their student days.

Among these, almost 30 years ago, was yours truly. Moss Side then was filled with blacks from the Caribbean and Africa. And they still form the majority today.

It was here in 1985 that the first race riots occurred, and spread to the rest of Britain. As a consequence, the British government decided to do away with the flats, blaming them for the inner city problems.

The truth was that Moss Side and many such inner city areas were a different country from the rest of Britain. They were improvised areas with many unemployed. Moss Side was – and still is, I am told – a bastion of drugs, vice and gangsterism.

A colleague, a fanatical Manchester United supporter, said he had been to the city many times, but he never ventured into Moss Side.

“Be careful when you see a boy wearing a hoodie (a sweatshirt with a hood) walking towards you. I will normally cross the street when I see one,” he said.

I don’t blame him because records show there had been more than 800 gang-related murders in Manchester in the past decade.

About five years ago, a 14-year-old boy was killed by a rival gang in Manchester.

His was not an isolated incident. There have been scores of teenage murders up and down England, especially in the inner cities, like Moss Side.

But to blame the gangs alone for the recent riots is a convenient excuse at best, or political naivete at worst.

Morality is not a word with any meaning in places like Moss Side, where the social structure has broken down. In this kind of place, one competes to be the youngest mother or grandmother.

Most parents do not know where their kids are at any time of the day. Anyway, most fathers and mothers have criminal records or had served time at the nearby city prison.

I recall being in a newspaper shop in Moss Side and the local postman strolled in and greeted the woman shopkeeper, who replied: “What can I do for you today, Mick?”

He said: “Can I have a 12-year-old virgin, please?”

To this, the elderly woman replied: “There are no such thing as 12-year-old virgins here. This is Moss Side.”

This conversation has stayed in my mind for the past 30 years and, of course, it was an exaggeration by the shopkeeper and the postman, but not by much.

We in Malaysia must be aware that we are also building inner city estates all over Kuala Lumpur and Petaling Jaya. Tall council or public housing flats are a sure-fire formula for such problems as in Moss Side.

The Women’s and Family Development Ministry must study these areas carefully to ensure that social problems are solved before they become tinder to a highly inflammable situation.

Executive editor Wong Sai Wan was kept awake for three days in Moss Side by Bob Marley’s No Women No Cry when he died on May 11, 1981



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The convenient scapegoat barring technology and social media

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The convenient scapegoat

ALONG THE WATCHTOWER By M.VEERA PANDIYAN veera@thestar.com.my

Barring technology and the social media is not the answer to quelling unrest.
Image via CrunchBase

IS the social media and free flow of information via digital technology good or bad? It depends on where it happens and whom it affects.

Text messages, Twitter and Facebook were hailed as powerful tools against repression when the people of Tunisia, Egypt and Libya took to the streets to protest against their authoritarian rulers in February.

British Prime Minister David Cameron declared then that the Internet and social media belonged to people who had “enough of corruption, of having to make do with what they’re given, of having to settle for second best”.

But when riots and anarchy broke out back home in London and elsewhere in Britain, the reaction was patently different.

“Everyone watching these horrific actions will be struck by how they were organised via social media.

“Free flow of information can be used for good. But it can also be used for ill. When people are using social media for violence, we need to stop them.”

And Cameron told an emergency session of the British Parliament: “So we are working with the police, the intelligence services and industry to look at whether it would be right to stop people communicating via these websites and services when we know they are plotting violence, disorder and criminality.”

The UK police have rounded up close to 5,000 people and taken about 1,000 rioters and looters to court since the ugly wave of unrest and arson hit.

Britain’s entire national intelligence machinery – including its Security Service, or M15, which usually handles espionage and terrorism – is now focused on identifying the culprits and trying to prevent future occurrences of disorder.



The authorities have been generally blaming the misuse of social media for the mayhem; it appears that Research in Motion’s (RIM) BlackBerry Messenger (BBM) was the most effective tool used because of its tight security features.

The BBM application provides password-protected messages to individuals or groups that can only be read with a PIN.

During the height of the riots, British MP David Lammy used Twitter to call for the halt of the service by tweeting: “BBM clearly helping rioters outfox police. Suspend it.”

RIM, Facebook and Twitter have since given assurances that they would comply with the UK’s Regulation of Investigatory Powers Act, the country’s privacy laws.

Besides his government’s willingness to consider shutting down or blocking access to social networks, the British PM also pledged a “zero tolerance” system of policing under which no form of law breaking would be condoned.

Critics have been quick to censure Cameron’s call for curbs and tough measures as smacking of hypocrisy and as a violation of free speech, civil liberties and human rights.

Index on Censorship news editor Padraig Reidy slammed it as “a bizarre and kind of knee-jerk reaction by the government”.

“More recently, we’ve seen this kind of thing in Egypt,” he said.

Actually, the most recent incident of shutting down a phone network happened last week in the United States.

The San Francisco Bay Area Rapid Transit (BART) shut down the cell phone service at four stations to prevent a protest rally over the shooting of two men by police.

BART deactivated the service from 4pm to 7pm to stop protest organisers from communicating.

Meanwhile, China, which was subject to Western sermons over its fierce crackdown on dissent in the wake of the Arab Spring uprisings, has raised safety concerns over the 2012 Olympics to be staged in London.

The Chinese media has responded to the UK riots with “a mixture of shock and schadenfreude”, as fittingly described by the Daily Telegraph.

“The West has been talking about supporting Internet freedom, and opposing other countries’ government to control this kind of websites. Now we can say they are tasting the bitter fruit (of their complacency) and they can’t complain about it,” wrote a People’s Daily commentator.

But the real issue to be addressed by governments everywhere is distrust brought about by the gap between the haves and have-nots and unfairness, whether real of perceived.

Ian Williams, a veteran journalist and analyst, described it aptly when he said the UK government’s posturing ignored the fact lawlessness in the highest places was at the root of the riots.

“The rioters who were interviewed and people on the streets all remarked upon members of parliament stealing expenses from the tax payer, mostly with impunity, although some went to jail,” he said when interviewed by Press TV.

“They look at the bankers making billions of dollars and getting away with it; they look at Rupert Murdoch, the head of News International, hacking innocent people’s telephones, and getting away with it.
“So basically the message that is being sent from the ruling classes of Britain is that the law is not there to be obeyed.

“So to start shouting that the lesser people - the people who steal televisions - should be locked up for life whereas the people who steal whole industries and banks and countries should be given knighthoods and peerages for it is not really a sustainable one on the streets I suspect.”

> Associate Editor M. Veera Pandiyan likes this quote by Edgar Allan Poe: The nose of a mob is its imagination. By this, at any time, it can be quietly led.

Malaysians are always an ‘exception’?

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We are always an ‘exception’

Musings By Marina Mahathir

Malaysian policies often state that we are different and therefore cannot be compared with others. Yet those who join peaceful marches are likened to British rioters. Suddenly we are the same?

ARE we getting progressively schizophrenic? Judging by current responses to events around the world, it would be easy to conclude that we are.

Schizophrenia is a mental disorder that makes it difficult to tell the difference between real and unreal experiences, to think logically, to have normal emotional responses and to behave normally in social situations.

If you read up on Malaysian policies and statements on various issues, the one striking factor is our insistence on exceptionalism. That is, we are different and therefore cannot be compared with any other country.

Fiery aftermath: The violent riots in London left many properties in ruin. — AFP

In the early years of the AIDS pandemic, we thought we were protected because we were different. If non-Muslims in other Muslim countries use the word “Allah” for God with no fuss, ours can’t because we are different. We are apparently unique and incomparable to anyone else in the world.

Which is why it puzzles me that all of a sudden our citizens, or at least the ones who want to voice their opinions with peaceful assemblies and marches, are being compared to British rioters and looters.
If we are always different, how come suddenly we are the same?

Going by the statements of our leaders, basically we are nothing more than savages who would rob, rape, loot and pillage given half the chance. Therefore, we need all sorts of laws to keep us in check and not venture in groups of more than five outside our homes.

Now, this is why that schizophrenic inability to think logically comes into play. Despite evidence that none of the 30,000 or so peaceful marchers last July robbed, raped, looted or pillaged, our leaders insist that we would have. They must be looking at mirrors.

Just a few days ago the fellow who demonstrated how inconvenient a protest is by inconveniencing everyone in Penang declared that he would burn down two online news portals whose reports he disagreed with. Now if that’s not London rioter behaviour, I don’t know what is.



More disturbingly, after already having insulted all the good citizens who exercised their right to peaceful assembly, our leaders go on to insult them some more.

Instead of being proud that we did not have the type of violence that the UK experienced, instead of talking about how so much more civilised our people are, our leaders liken us to rioters who have vandalised, stolen and killed.

Talk about the inability to distinguish between reality and fantasy.

A certain amount of hypocrisy also rears its ugly head. What if Mark Duggan, the man who was shot by police in London and whose family’s peaceful protest became the original rallying cry for the rioters, was Mohamad Duggan?

Between 1987 and 1993 and 2000 and 2005, the Palestinian people went through two uprisings against the Israeli government, known as the First and Second Intifadas, respectively. Both Intifadas involved demonstrations, protests and, yes, a certain amount of violent rioting.

They were met with an even more violent response from the Israelis that resulted in many deaths and the eventual blockade of Gaza, still in force today.

Our government supported the Intifadas then. Does that mean that our government supports the right of Palestinians to demonstrate, protest and riot, but refuses its own people’s right to do much less, that is to just march peacefully?

Or is the logic that when governments are democratically elected, its people then lose the right to protest against them?

Conveniently ignored, too, is the fact that in the UK, protests and demonstrations are held all the time without the type of violence we saw recently.

One of the biggest was in 2003 when hundreds of thousands of people marched against the Iraq war. At the time we looked benignly at this because we had the same stand. Did we tell the Brits and others round the world that they should not demonstrate against the war?

So what is the message here? We may be trusted to peacefully protest as long as the subject of our protest is in sync with the Government’s. Otherwise, if we should protest for free and fair elections, against corruption or anything else that the Constitution gives us the right to, we are labelled as unpatriotic thugs out to disturb the peace and destroy the economy and image of our country.

Looking at the UK riots, are we even talking about the same thing? What cause was the UK rioters espousing?

Some wide reading instead of political posturing might be more beneficial here. The UK rioters did not loot bookshops, and some have suggested it’s because they don’t like to read.

Perhaps they are not unlike some of our politicians.

British Society is Broken: Cameron's gang war 'long overdue'

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Cameron's gang war 'long overdue'

Source: AFP

For the communities and youth workers facing the daily horror of gang violence on England's streets, Prime Minister David Cameron's vow to tackle the problem following last week's riots is long overdue.

Cameron has declared "all-out war" on gangs, which he blamed for fuelling four nights of frenzied looting and said they were "a major criminal disease that has infected streets and estates across our country".

He has hired US "supercop" Bill Bratton to advise on tackling street gangs and has rolled out the use of court injunctions to stop gangs wearing colours of allegiance, congregating in certain places and using dangerous dogs as weapons.

Cameron also admitted that "social problems that have been festering for decades have exploded in our faces", and vowed to redouble efforts to tackle broken families, welfare dependence and educational failure.

But to those living and working with the problem, many question why it has taken so long for the government to notice -- during which time gangs are getting more and more violent, and their members younger and younger.

Sheldon Thomas, an ex-gang member who runs a mentoring programme in London, supports Cameron's assertion that British society is "broken".



"People like me have been saying this for decades," he said, adding: "People are angry, people are frustrated. There are no jobs, there is no aspiration."

He also accused Cameron of only acting on gangs now because shocking images of youths rampaging through relatively wealthy areas of London last week caused a national outcry, when successive governments failed to respond in the same way to up to 800 gang-related murders in the past decade.

"Are we now a nation that values materialism -- businesses and shops --more than the life of a 14-year-old kid who was chased down a road by several gang members who stabbed him 17 times for his BlackBerry?" he asked angrily.

Youth worker Patrick Regan, who has been advising Deputy Prime Minister Nick Clegg on the recent violence, agrees that the government has failed to address the issue, although he is more hopeful that ministers can help.



"People have been warning for years that something like this could happen. I'm hoping there will be a long-term view of things, that we won't paper over the cracks," he told AFP.

Regan, the chief executive of youth charity XLP, cautioned however against any simplistic definition of gangs, and also warned that it was unlikely that organised criminal groups were entirely responsible for last week's riots.

"It wasn't all young people, and some were just purely opportunistic. Young people who just got wrapped up in it, crowd dynamics took over," he said.

He said he had spoken to his local authority who reported that known gang members had actually stayed home during the riots, "because they knew if they went out they'd get targeted by police".

One of the main pieces of research on British gangs, a 2009 report by the respected Centre for Social Justice thinktank, found that 170 gangs operated in London, although Thomas puts the number at 260, with 15,000 individual members.

Another 170 operate in the Scottish city of Glasgow, where police and local authorities claim to have cut violent offending among gang members by almost 50 percent in two years through a targeted community initiative.

Community workers are calling for more resources for proven mentoring and intervention schemes, and the US supercop, Bratton, warned this weekend that a police crackdown alone would not solve Britain's gang problems.

"You can’t just arrest your way out of the problem. It’s going to require a lot of intervention and prevention strategies and techniques," he said.

Although in the past gangs used to be defined by ethnicity, most are now about territory -- the Pembury Boys take their name from the Pembury housing estate in Hackney, east London, for example -- and they often control drugs within that.

Although they range from criminal organisations to groups of disaffected teenagers, a recent government report found that people join them for protection, a sense of belonging and status as well as a way of making money.

Gavin McKenna, 21, was in a gang in Newham in east London before he turned his life around. Although he carried a knife and robbed people, he told AFP that he and his friends weren't an organised group, "we were just trying to survive".

He grew up with an abusive father who left when he was young, had little money and his gang represented both a way of earning cash and a substitute family -- a story that is played out over and over among Britain's gang members.

McKenna says he has little faith in the government's new drive against gangs.

"I think they're going to patch it over, like they always do," he said, adding: "They don't care about us."

-Sapa-AFP

Related posts:

UK Riots: Lessons to be learned; Role for US crime guru?

UK riots: resembles more of the Third World, bring up questions about society, moral decay! Anger still burns

Anarchy in the UK - London Riots Sparked by Police Beating, Poverty, Ethnic differences...

Anarchy in UK - London Riots: Malaysian student mugged...