The hegemonic anxiety of America First

The World Will Not Mourn the Decline of U.S. Hegemony

In the global political landscape looms a superpower with a military and economic might widely believed to remain unrivalled at least for decades to come.

Yet it appears that in recent years the hegemon -- the United States, or specifically its national security apparatus -- has grown increasingly restless. It sees the irrevocable collective rise of the developing world as a threat and refuses to accept what is natural and inevitable. That bodes trouble for all.

The peerless prowess that underpins the United States' leading role on the world stage stems from a combination of political, economic, geographical and other factors, including a grand vision that allowed it to work with others to establish the current international system.

Yet that strategic sobriety has noticeably given way to a sense of superiority. Three decades of unipolar hegemony has induced a historically ill-founded but deeply entrenched belief in Washington that the United States is an exceptional country above all others, and international affairs should be managed in either the American way or no way at all. Its past success in nipping every serious challenger to its dominance in the bud has only deepened its complacency.

But now with the unstoppable growth and ascent of developing countries, it appears destined that the U.S.-led West will have to share the stage with "the rest." Although the nascent shift is merely a logical outcome of history and does not cost Washington any of its legitimate interests, a self-inflicted anxiety is taking hold of what is called the national security state of America.

Hawkish decision-makers and opinion leaders are drowning out reason and morality in the United States and fanning the fear that America is losing what it is entitled to. Upholding the banner of "America First," the current U.S. government has in a little more than two years shown the world how far it is willing to go in order to "make America great again," although the United States remains the sole superpower in today's world.

Global trade is so far a major battlefront. In the eyes of incumbent U.S. policy-makers, the laws of economics and trade are nothing but a hoax, and any country that has a trade surplus with the United States is ripping it off.

They have waged waves of tariff offensives against not only China, but also U.S. allies like the European Union, Japan, South Korea and Canada, slapping heavy levies on imported products ranging from steel and auto parts to toys and bikes, regardless of rising financial burdens on domestic consumers and businesses, and the rules of the World Trade Organization (WTO).

Washington's assault on the rules-based multilateral global trading system is posing a serious threat to future global economic growth. Gita Gopinath, the International Monetary Fund's chief economist, warned in May that "the latest (tariff) escalation could significantly dent business and financial market sentiment, disrupt global supply chains and jeopardize the projected recovery in global growth in 2019."

The high-tech realm has also witnessed the United States scrambling to secure its supremacy. However, it is trying to do so not by sharpening its own edges in fair competition, but by employing the state power to drive out competitors.

Its unjustified crackdown on telecom equipment provider Huawei and other Chinese high-tech companies under the excuse of national security is reminiscent of its erstwhile plot against Japan's once booming semiconductor industry, and widely interpreted as an attempt to sabotage China's standard-setting capabilities in such key areas as the next generation of mobile communications and ensure China's permanent inferiority, at least in advanced technology.

In the realm of geopolitics, Washington's hegemonic anxiety disorder has become even more conspicuous, especially in its policies on the Middle East and Latin America. In recent months, the United States has flirted with going to war against Iran and orchestrating a coup d'etat in Venezuela.

Meanwhile, the current US government is seeking to reap the benefits of being what Martin Wolf, chief economics commentator at the Financial Times, called a "rogue superpower" while refusing to bear its due global responsibility. Its withdrawal from the Paris climate accord and the Iran nuclear deal has breached the global efforts to address many of the world's most pressing challenges.

In the post-Cold War era, the West once believed that the world had entered a period of "Pax Americana," where the United States would act as a builder of a rules-based international order and a guardian of peace. However, three decades later, Western countries are disappointed to discover that it has become a big bully pushing the world toward "Chaos Americana."

Given the high stakes, the international community, including the sober minds in America, needs to work together to help Washington make peace with the current historical trend. After all, every nation is part of the planet, every people is entitled to pursue happiness, and every country has the right to developing its economy and technology.

As for Washington, it should, as US political scientist Joseph Nye has suggested, learn the importance of using its power with others, not just over others, in today's increasingly interdependent world.

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Hegemonic practices of US will finally lead to failure

There's a proverb in the western world that self-knowledge is the most valuable knowledge. However, some US politicians, who are just not able to have a clear knowledge of themselves and the global situation, are still stubbornly following the outdated hegemonic approach.

With the strategy of "America first", these US politicians have never cared about the interests of other countries or the common welfare of global citizens.

They started the trade war under the excuse that the US is losing in its trade with China, but keep silent about the huge profits they have gained from the relationship. They make frequent statements that other countries have posed threat on US national security, but turn mute on their globally-reaching intelligence network. They strongly criticize international organizations such as the WTO, but make no mention of the fact that the US is a major founder and the largest beneficiary of the current global governance system.

White House National Trade Council Director Peter Navarro even said bluntly that other countries dare not to take retaliatory measures against the US because of the great power of the latter. Such arrogance revealed what truly lies under the slogan of "Make America great again".

The bullying and arbitrary practices of the US are supported by the hegemonic logic of the country that US rules apply to the whole world and other countries must compromise to ensure US interests.

From the "economic aggression" theory by US Vice President Mike Pence, to the fallacy made by Navarro that Chinese commodities are mortgaging America's future, and to the statement of former White House Chief Strategist Stephen Bannon that exporting of Chinese excess capacity gutted the upper Midwest of the United States, these US politicians take normal economic exchanges as "nails" and wish to hammer them. They are not willing to see the Chinese people live in a well-off society just like Americans do.

Under the banner of "America first", some US politicians just cannot keep a lid on their impulses and even started attacking their allies. Not long ago, Chancellor of Germany Angela Merkel expressed her views on the cracking foundation of the post-World War II order and the deterioration of trans-Atlantic ties. The US is becoming a rival of global countries.

Why the US politicians are still dreaming about the "chosen nation" and "shining city upon a hill"? It's because they still believe in the old philosophy that might is right, and perceives the world with a "law-of-the-jungle" mentality. Besides, they are taking international relations as a "clash of civilizations".

This explains why the US government always calls itself a monitor of global orders and a judge of international relations.

With the irreversible trend of today's multi-polarization, economic globalization, cultural diversification and social informatization, the US is still considering itself a savior of the world and taking the globe as its "backyard garden" where it can act arbitrarily and do everything it wants to. It is even making attempts to stop the building of a community with a shared future with the so-called "America first" policy.

At present, the US hegemony has aroused anger from across the world. Even some US enterprises are making adjustments in reaction to the pressure from the US government. A series of "made-in-America" companies including Harley-Davidson, Inc., have "escaped" from the US, and Exxon Mobil Corporation and Tesla are also building factories in China.

However, the US hegemony is nothing but a wishful thinking. According to American scholar Stephen Roach, the US had merchandise trade deficits with 102 countries in 2018, which reflected the extreme insufficiency of the country's domestic savings - a situation caused by the rash approvals of budget deficit made by the congress and decision makers.

Some scholars attributed the inequality in the US to its wrong policies, rather than economic globalization. Unfortunately, some US politicians made wrong prescriptions, and called other countries a barrier on the way to "make America great again".

Blaming the others for its own mistakes, the US will miss the opportunity for self-improvement and hurt the country and people via the diversion of domestic contradictions.

US scholar Robert Kagan argues that America's decline is being actively willed by unnamed "politicians and policymakers", and they are "in danger of committing pre-emptive superpower suicide out of a misplaced fear of declining power".

No country in the world is willing to be manipulated by other countries in human history. Mutual respect, sincere cooperation and win-win benefits should be the principle held by each country when it comes to international relations.

Of course, it's not easy for the arrogant US politicians to be aware of this. The bright side is that facts don't lie and speak louder than words.

There is an idiom in China that ultimate power incurs humiliation. Any country that deviates from the path of win-win cooperation and sticks to zero-sum games, disobeys rules for fair competition and pressures others, and goes against the trend of economic globalization and resorts to conservatism will end up losing.

Hegemony will only consume the power of a nation and accelerate the process of its recession. Such cases are just prevalent in history.

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The World Will Not Mourn the Decline of U.S. Hegemony

What the market is trying to tell investors?

Second catalyst: Cranes operate on residential buildings at a construction site in Beijing. China’s economic health is the second major concern that could spark off a crisis for Bursa and the world.

IN stock market language, when the charts point to a “dead cross” formation, it means that there is confirmation of a long-term bear market. This is as opposed to a “golden cross” that points to a bull market.

Based on weekly indicators emitting from Bursa Malaysia, a dead cross is coming to formation. The last time this pattern emerged was in the first quarter of 1997 and a year later, the “dead cross” chart was fully formed. By that time, the entire capital market was in flames.

The ringgit fell against the US dollar, banks were in trouble and the stock market hit a nadir of 261 points on Sept 4, 1998.

Technical indicators are no sure sign of market failure. It could change with sentiments. However, time and again it has been proven that the stock market runs six months ahead of what is to be expected in the real economy.

As for the nation’s economy, there is no denying that growth is slowing down. There are governance issues with regards to the handling of public funds.

However, the fact remains that for all the noise the foreign investors make, the Government did not have to pay a premium when it raised US$1.5bil debts a few weeks ago. This indicates that foreign investors have largely discounted local issues.

Nevertheless, the external headwinds are overwhelming and weigh heavy on the Malaysian economy.

It is already showing with the slew of corporate results streaming in. Companies are not doing well, as indicated by Tan Chong Motor Holdings Bhd chalking up its first loss in 18 years. Property developers that have made a pile from a great run in the last eight years are seeing miserable sales.

Malaysia is expected to see a growth of 4% this year, which is low for a small nation. Nonetheless, we are better off than some of our neighbours.

Everybody is cautious, but nobody is able to point a finger to the catalyst that could cause a severe correction to the stock market. Inevitably, it will stem from the economy – whether domestic or global.

There are several signs that have emerged which need some monitoring.

At the top of the list would be the price of oil that has a close correlation to the ringgit and the economy.

Ironically, when crude oil plunged below US$30 per barrel, the ringgit weakened significantly on the view that Malaysia was an exporter of energy and it impacted the country’s revenue.

However, in recent months, oil prices have recovered to about US$45 per barrel levels but the ringgit is continuing to see volatility. One reason is that the market is not convinced that crude oil will stabilise at current levels.

Conventional economic theory reasons that when oil prices fall, it should strengthen economic activity because the cost of doing business comes down. The International Monetary Fund estimates that for every US$20 drop in price per barrel of crude, the global economy should grow by 0.5%.

However, this is not happening because the major economic superpowers of the world are going through their own problems.

This points to China’s economic health, the second major concern that could spark off a crisis for Bursa and the world.

Nobody can authoritatively put a finger on the state of the debt levels of China, especially those held outside the financial sector. The latest figure being bandied about is that the non-financial sector debt is 279% of gross domestic product, according to data from the Bank of International Settlement.

However, the optimists contend that China’s strong growth supports borrowing. Also, the country is seeing high inflation, which in the longer term will cause debt to erode. In the process of growing the economy, China has adopted an approach to weakening the yuan to export its way out. Every time the yuan weakens, the ringgit falls.

The third indicator is the highly likely scenario of the US raising interest rates in the second half of the year from the current band of between 0.25% and 0.5%. It is a measure which, if materialises, will exert pressure on the ringgit.

The headline numbers show that the US economy is still in the stage of recovery. The unemployment rate in the world’s biggest economy has ticked up slightly to 5% from 4.9% previously based on April numbers, but wage rates are still steady, meaning people are still getting paid well.

People’s earnings are growing at an estimated 2.5% based on latest numbers, which means that inflation will kick in.

At the moment the possibility of the US Federal Reserve raising interest rates will not likely happen in the next month or so but there is a strong possibility may happen by the year-end as inflation starts to tick up. This would cause an outflow of funds from emerging economies such as Malaysia and the ringgit would come under pressure.

The fourth catalyst is also tied to the US. This time, it is the fear of Donald Trump becoming the next president. Trump prefers a strong dollar and has hinted of a haircut for those holding US dollar debt papers.

Although Trump has come out to state that he was misquoted on the US dollar debt paper issue, it has spooked investors holding US$14 trillion of US debt papers.

The markets will also watch with anxiety on how Trump deals with policies of other countries such as China, Japan and the European Union (EU) in weakening their currencies to boost the economy.

As the run-up to the presidential elections takes place in November this year, if it becomes increasingly apparent that Trump will triumph over Hillary Clinton, then emerging markets will be spooked.

And finally, the last possible catalyst to cause a global shock is the possibility of Britain leaving the EU or better known as Brexit. Increasingly, the chances of it happening are remote. Nevertheless, nobody can tell for sure until the referendum on June 23.

All the five economic events will have a bearing on the ringgit. Everything points to the US dollar appreciating in the future, leaving the ringgit in defensive mode.

This is already being reflected in the negative mood of the stock market. If there is less noise in the domestic economy on such matters relating to the handling of public funds to governance, it would help the case for the ringgit.

The market is generally correct in predicting the future. But sometimes, the unexpected can happen – such as China handling its debt problems better than expected or Trump not being a candidate for the Republicans.

Such unexpected incidences can quickly reverse the sentiments of the market and the ringgit.

By M. Shanmugam The alternative view The Star

Go to Market Watch

 http://www.thestar.com.my/business/marketwatch/

BMKLCI

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Malaysian Minister admits poor education system, students are below par

Minister admits poor education system, says blueprint is the answer

Education Minister II Datuk Seri Idris Jusoh has admitted that Malaysia's education system was below par as shown in global rankings, and cited Putrajaya's National Education Blueprint as the solution.

“It is vital to assess and compare our education system against the international standards. Out of 74 countries, Malaysia ranked in the bottom third in the Programme for International Student Assessment (Pisa) 2009+.

"This is below the international and OECD average,” said Idris, referring to member states in the Organisation for Economic Co-operation and Development.

“Primary and secondary school education standards need to improve, particularly so in bridging the gap between urban and rural areas... at the higher education level, we continue to face challenges mainly in the area of graduates' ability to be employed,” Idris (pic) said in his speech at the 18th Malaysian Education Summit in Petaling Jaya, today.

Idris said the Education Blueprint, launched in September last year and formulated with the help of 55,000 stakeholders, would benefit Malaysia as international education standards continued to rise.

He added that another blueprint for the higher education sector was currently being prepared to among others, to empower university governance, democratise access to higher education and improving employability of graduates.

He also said a “war room” was being planned to ensure that the higher education blueprint, to be launched by year's end, would be carried out smoothly.

"I know the responsibility is great, I cannot shoulder the burden alone. But we must keep on listening, we have to keep deliberating to ensure that Malaysian education is at par ‎at least with other countries.

“But that's not good enough for me.‎ I want Malaysian education to be better than other countries in the world,” Idris told some 200 delegates comprising academics and education stakeholders.

On Tuesday, the annual QS University Rankings: Asia 2014 revealed that Malaysian universities lagged behind those from neighbouring Singapore and Hong Kong.

The National University of Singapore topped the list of Asian countries, but the University of Malaya was placed at the 32nd spot. Other local universities in the top 100 include Universiti Kebangsaan Malaysia in the 56th place, Universiti Sains Malaysia (57), Universiti Teknologi Malaysia (66) and Universiti Putra Malaysia (76).

Malaysian public universities last month were left out of the latest ranking of the annual Times Higher Education (THE) Top 100 Universities under 50 years old.

Four Asian universities were ranked among the top 10 of the world’s young universities, including South Korea's Pohang University of Science and Technology which took the top spot, Korea Advanced Institute of Science and Technology (3), Hong Kong University of Science and Technology (4) and Nanyang Technological University, Singapore (5).

Malaysia, however, failed to get on the list for the second year running. In the first rankings list in 2012, Universiti Kebangsaan Malaysia (UKM) was ranked 98th.

Malaysia was also absent from the Times Higher Education World Reputation rankings list which was released in March, losing out to other Southeast Asian countries.

Malaysia's continuous failure to feature in any university rankings despite a huge education budget every year has not gone down well with the opposition, which has taken Putrajaya to task for the miserable performance.

The Education Ministry received RM38.7 billion in 2013 and has been allocated a total of RM54 billion this year – the biggest allocation yet.

Contributed BY ANISAH SHUKRY, The MalysianInsider

Malaysian students are below par, says Idris

Malaysian students are below par when compared with their contemporaries in other countries, acknowledged Education Minister II Datuk Seri Idris Jusoh.

Although literacy rates were rising in Malaysia, it was vital to assess and compare the Malaysian education system against international standards, he added.

“Out of 74 countries, Malaysia ranked in the bottom third in the Programme for Interna­tional Student Assessment (Pisa) 2009+. This is below the international and OECD (Organisation for Economic Co-operation and Development) average,” he said during the 18th Malaysian Education Summit yesterday.

“Primary and secondary school education standards need to improve, particularly so in bridging the gap between urban and rural areas. Though Malaysia has achieved commendable results in terms of providing access, we have to now ensure that access comes together with quality education of international standards.”

Meanwhile, at the higher education level, he said that the challenge was producing knowledgeable, competent and globally competitive human capital.

“Employers in Malaysia face a major problem when it comes to having fresh graduates fill out vacancies,” he said, citing poor command of English as one of the reasons.

The solution to this is the Malaysia Education Blueprint (MEB) 2012-2025, which was launched last September, as well as the soon-to-be-released National Education Blueprint for Higher Education 2015-2025 (Higher Education Blueprint).

Idris said the MEB offered a vision of the education system and students’ aspirations that Malaysia both needed and deserved and outlined 11 strategic and operation shifts that would be required to achieve that vision.

“The need for the Education Blueprint is justified in the context of raising international standards; the government aspiration of better preparing Malaysian children for the needs of the 21st century; and increased public and parental expectations of education policy,” he said.

“We have had international experts from the World Bank, Unesco, and OECD to work with our national partners to evaluate the performance of our national education system in the development process of the Education Blueprint. Overall, more than 55,000 stakeholders were consulted in its formulation.”

“The Higher Education Blueprint will also be introduced in order to ensure consistency with the primary and secondary education system, and allow for seamless progression in terms of educational offerings, opportunities and advancement,” he added.

The Higher Education Blueprint will address challenges such as empowering university governance, democratising access to higher education and improving graduate employability.

contribute by Jeannette Goon The Star/Asia News Network

Here's The New Ranking Of Top Countries In Reading, Science, And Math:

The OECD is out with new global rankings of how students in various countries do in reading, science, and math. Results of the full survey can be found and delved into here.

You can see below how Asian countries are obliterating everyone else in these categories.

The United States, meanwhile, ranks below the OECD average in every category. And as the WSJ notes, the US has slipped in all of the major categories in recent years:

The results from the 2012 Program for International Student Assessment (PISA), which are being released on Tuesday, show that teenagers in the U.S. slipped from 25th to 31st in math since 2009; from 20th to 24th in science; and from 11th to 21st in reading, according to the National Center for Education Statistics, which gathers and analyzes the data in the U.S.

Here are the top countries

Sources: Business Insider.com
 
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Always in sight, forever in my heart

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Asian students dominate global exam; Are the Chinese cheating in PISA or are we cheating ourselves?

Memento: In this file photo, parents take pictures of their children outside a high school in Beijing after they finished their national college exams. — AP

AS a ninth-grader, Shanghai’s Li Sixin spent more than three hours on homework a night and took tutorials in Mathematics, Physics and Chemistry on the weekends.

When she was tapped to take an exam last year given to half a million students around the world, Sixin breezed through it. “I felt the test was just easy,” said Sixin, who was a student at Shanghai Wenlai Middle School at the time and now attends high school.

The long hours which focused on schoolwork — and a heavy emphasis on test-taking skills — help explain why young students like Sixin in China’s financial hub once again dominated an international test for 15-year-olds called the Programme for International Student Assessment (Pisa).

Students from Hong Kong, Singapore, Taiwan, South Korea and Japan — all from Asia — were right behind. In the wealthy city of Shanghai, where affluent families can afford to pay for tutors, the results are not representative of China overall, although they are ranked as a group alongside national averages for countries such as the United States and Japan.

Still, they are indicative of education trends in China and elsewhere in Asia — societies where test results determine entrance into prestigious universities and often one’s eventual career path.

Shanghai scored an average of 613 on Maths, as compared with the nearest rival Singapore (573), and the global average of 494. Hong Kong ranked third in Maths, scoring 561, while Japan was ranked seventh and scored 536. The test is given every three years.

In China, educators say hard work is key to their students’ impressive showing. “They listen carefully in the class and do their homework,” said Bai Bing, the headmaster of Sixin’s school, where about 40 students were chosen to take the global test.

Still, Chinese educational experts say the results are at most partial and covers up shortcomings in creating well-rounded, critical thinking individuals. “This should not be considered a pride for us because overall, it still measures one’s test-taking ability. You can have the best answer for a theoretical model but can you build a factory on a test paper?” asked Xiong Binqi, a Shanghai-based scholar on education.

“The biggest criticism is that China’s education has sacrificed everything else for test scores, such as life skills, character building, mental health, and physical health,” said Xiong.

“Shanghai is an exception, and it is by no means representative of China,” said Jiang Xueqin, deputy principal at the High School Attached to Tsinghua University in Beijing. “It’s an international city where its residents pay great attention to education and where there are many universities.”

Affluent Shanghai parents annually spend an average of 6,000 yuan (RM3,190) on English and Math tutors and 9,600 yuan (RM5,100) on weekend lessons.

Shanghai Normal University president Zhang Minxuan said Pisa does not measure students’ social abilities, physical health and aesthetics, and he cautioned against extrapolating to the rest of the country.

“Shanghai students’ top placement in Pisa is no proof of equal development of education in China,” he said, as reported by Shanghai Education News. “There’s no denying, China’s education still has a long way to go.”

By Didi Tang — AP
  
Are the Chinese cheating in PISA or are we cheating ourselves?

Andreas Schleicher

Whenever an American or European wins an Olympic gold medal, we cheer them as heroes. When a Chinese does, the first reflex seems to be that they must have been doping; or if that's taking it too far, that it must have been the result of inhumane training.

There seem to be parallels to this in education. Only hours after results from the latest PISA assessment showed Shanghai's school system leading the field, Time magazine concluded the Chinese must have been cheating. They didn't bother to read the PISA 2012 Technical Background Annex, which shows there was no cheating, whatsoever, involved. Nor did they speak with the experts who had drawn the samples or with the international auditors who had carefully reviewed and validated the sample for Shanghai and those of other countries.

Others were quick to suggest that resident internal migrants might not be covered by Shanghai's PISA sample, because years ago those migrants wouldn't have had access to Shanghai's schools. But, like many things in China, that has long changed and, as described by PISA, resident migrants were covered by the PISA samples in exactly the way they are covered in other countries and education systems. Still, it seems to be easier to cling to old stereotypes than keep up with changes on the ground (or to read the PISA report).

True, like other emerging economies, Shanghai is still building its education system and not every 15-year-old makes it yet to high school. As a result of this and other factors, the PISA 2012 sample covers only 79 per cent of the 15-year-olds in Shanghai. But that is far from unique. Even the United States, the country with the longest track record of universal high-school education, covered less than 90 per cent of its 15-year-olds in PISA – and it didn't include Puerto Rico in its PISA sample, a territory that is unlikely to have pulled up US average performance.

International comparisons are never easy and they are never perfect. But anyone who takes a serious look at the facts and figures will concede that the samples used for PISA result in robust and internationally comparable data. They have been carefully designed and validated to be fit for purpose in collaboration with the world's leading experts, and the tests are administered under strict and internationally comparable conditions. Anyone who really wants to find out can review the underlying data.

Short of arguments about methodology, some people turn to dismissing Shanghai's strong performance by saying that Shanghai's students are only good on the kind of tasks that are easy to teach and easy to test, and that those things are losing in relevance because they are also the kind of things that are easy to digitise, automate and outsource. But while the latter is true, the former is not. Consider this: Only 2 per cent of American 15-year-olds and 3 per cent of European ones reach the highest level of math performance in PISA, demonstrating that they can conceptualise, generalise and use math based on their investigations and apply their knowledge in novel contexts. In Shanghai it is over 30 per cent. Educators in Shanghai have simply understood that the world economy will pay an ever-rising premium on excellence and no longer value people for what they know, but for what they can do with what they know.

PISA didn't just test what 15-year-olds know in mathematics, it also asked them what they believe makes them succeed. In many countries, students were quick to blame everyone but themselves: More than three-quarters of the students in France, an average performer on the PISA test, said the course material was simply too hard, two-thirds said the teacher did not get students interested in the material, and half said their teacher did not explain the concepts well or they were just unlucky. The results are very different for Shanghai. Students there believe they will succeed if they try hard and they trust their teachers to help them succeed. That tells us a lot about school education. And guess which of these two countries keeps improving and which is not? The fact that students in some countries consistently believe that achievement is mainly a product of hard work, rather than inherited intelligence, suggests that education and its social context can make a difference in instilling the values that foster success in education.

And even those who claim that the relative standing of countries in PISA mainly reflects social and cultural factors must concede that educational improvement is possible: in mathematics, countries like Brazil, Turkey, Mexico or Tunisia rose from the bottom; Italy, Portugal and the Russian Federation have advanced to the average of the industrialised world or close to it; Germany and Poland rose from average to good; and Shanghai and Singapore have moved from good to great. Indeed, of the 65 participating countries, 45 saw improvement in at least one subject area. These countries didn't change their culture, or the composition of their population, nor did they fire their teachers. They changed their education policies and practices. Learning from these countries should be our focus. We will be cheating ourselves and the children in our schools if we miss that chance.

International comparisons are never easy and they aren't perfect. But PISA shows what is possible in education, it takes away excuses from those who are complacent, and it helps countries see themselves in the mirror of the educational results and educational opportunities delivered by the world's leaders in education.
The world has become indifferent to tradition and past reputations, unforgiving of frailty and ignorant of custom or practice. Success will go to those individuals, institutions and countries which are swift to adapt, slow to complain and open to change. And the task for governments is to help citizens rise to this challenge. PISA can help to make that happen.

Andreas Schleicher is deputy director for Education and Skills, and special adviser on education policy to the OECD's Secretary General.

In response to criticisms and questions regarding the validity of high scores achieved by 15-year-olds from Shanghai, China, in the recent PISA assessment, he posted this article to the OECD's education blog http://oecdeducationtoday.blogspot.fr/.

Sources: The Sydney Morning Herald

Related post:
 Malaysia, US, UK and Australia lag in global education ranking as China and Asian countries rise to the top

Malaysia, US, UK and Australia lag in global education rankings as China and Asian countries rise to the top

 Malaysia students score below global average

PETALING JAYA: Malaysian students have scored below the global average under the Programme for International Student Assessment (Pisa) 2012.

According to the results released by the Organisation for Economic Cooperation and Development (OECD), Malaysia scored 421 in Mathematics, 398 in Reading and 420 in Science respectively.

The results achieved in the latest survey showed Malaysia was below the global average score of 494 in Mathematics, 496 in Reading and 501 in Science.

Based on the mean score for 2012, Malaysia is still placed in the bottom third, ranking 52 out of 65 countries, and 55 out of 74 countries in the 2009 survey.

In 2009, Malaysia scored 404 in Mathematics, 414 in Reading and 422 in Science.

Pisa is administered by the OECD every three years on 15-year-olds in both OECD and non-OECD countries and offers students questions in the main language of instruction in their respective countries. Each round focuses on one area of either Reading, Mathematics or Science.

The assessments have been conducted since 2000, with Malaysia taking part for the first time in 2009.

Currently, Malaysian students are at the bottom one-third among more than 70 countries in international assessments like Timms (Trends in International Mathe­mathics and Science Studies) and Pisa. The Malaysia Education Blueprint has set the goal for Malaysia to be in the top third of countries participating in Pisa and Timms by 2025.

 Contributed by Kkang Soon Chen The Star/Asia News Network

US students lag in global education rankings as Asian countries rise to the top

By Daniel Arkin, Staff Writer, NBC News

Students in the United States made scant headway on recent global achievement exams and slipped deeper in the international rankings amid fast-growing competition abroad, according to test results released Tuesday.

American teens scored below the international average in math and roughly average in science and reading, compared against dozens of other countries that participated in the 2012 Program for International Student Assessment (PISA), which was administered last fall.

Vietnam, which had its students take part in the exam for the first time, had a higher average score in math and science than the United States. Students in Shanghai — China's largest city with upwards of 20 million people — ranked best in the world, according to the test results. Students in East Asian countries and provinces came out on top, nabbing seven of the top 10 places across all three subjects.

U.S. Education Secretary Arne Duncan characterized the flat scores as a "picture of educational stagnation."

"We must invest in early education, raise academic standards, make college affordable, and do more to recruit and retain top-notch educators," Duncan said.

Roughly half a million students in 65 nations and educational systems representing 80 percent of the global economy took part in the 2012 edition of PISA, which is coordinated by the Paris-based Organization for Economic Cooperation and Development, or OECD.

The numbers are even more sobering when compared among only the 34 OECD countries. The United States ranked 26th in math — trailing nations such as the Slovakia, Portugal and Russia. What’s more, American high school students dropped to 21st in science (from 17th in 2009) and slipped to 17th in reading (from 14th in 2009), according to the results.

“These numbers are very discouraging,” Eric A. Hanushek, an expert on educational policy and a Paul and Jean Hanna Senior Fellow at the Hoover Institution of Stanford University, told NBC News. “They say that we have to work more seriously at trying to raise the performance that leads to these scores.”

The exam, which has been administered every three years to 15-year-olds, is designed to gauge how students use the material they have learned inside and outside the classroom to solve problems.

U.S. scores on the PISA have stayed relatively flat since testing began in 2000. And meanwhile, students in countries like Ireland and Poland have demonstrated marked improvement — even surpassing U.S. students, according to the results.

"It's hard to get excited about standing still while others around you are improving, so I don't want to be too positive," Jack Buckley, commissioner of the National Center for Education Statistics, told the Associated Press.

Duncan said the results were at "odds with our aspiration to have the best-educated, most competitive work force in the world."

The scores are likely to reopen a long-simmering political debate about the state of education in America as economically ascendant nations like China eclipse U.S. students' performance.

American students historically have ranked low on international assessments, owing to a range of social and economic factors — from skyrocketing rates of child poverty to sheer population diversity. Nearly 6,100 American students participated in this round of testing.

"Socio-economic background has a significant impact on student performance in the United States, with some 15% of the variation in student performance explained by this, similar to the OECD average," according to a PISA summary of U.S. performance. "Although this impact has weakened over time, disadvantaged students show less engagement, drive, motivation and self-beliefs."

Shanghai students also dominated the PISA exam in 2009, according to the AP.

Tom Loveless, a senior fellow at the Brookings Institution, told the wire service that the educational system in that city is not equitable — and the students tested are progeny of the elite because they are the only ones permitted to attend municipal schools due to restrictions that, among other things, prohibit many migrant children.

"The Shanghai scores frankly to me are difficult to interpret," Loveless told the wire service. "They are almost meaningless."

Buckley told the AP that U.S. officials have not encountered any evidence of a "biased sample" of students administered the exam in Shanghai. He said if the whole country was included, it is unclear what the results would show.

Hanushek told NBC News that the performance of Asian teens says a great deal about the modern mindset of the Far East.

“These East Asian countries are hungry,” Hanushek said. “They have the view that improving their lives and improving their future depends on education.”

And the U.S., he added, has grown too accustomed to leading the world in knowledge that it may have lost its edge.

“We have the strongest economy in the world. But everybody is too complacent,” Hanushek said.
The test is premised on a 1,000-point scale. Here's a sampling of the leading findings:

— In math, the U.S. average score was 481. Average scores ranged from 368 in Peru to 613 in Shanghai. The global average was 494.

— In science, the U.S. average score was 497. Average scores ranged from 373 in Peru to 580 in Shanghai. The global average was 501.

— In reading, the U.S. average score was 498. Average scores ranged from 384 in Peru to 570 in Shanghai. The global average was 496.

Students from all states were tested. For the first time, three states — Massachusetts, Connecticut and Florida — elected to boost participation in PISA to get more state-specific data.

Average scores from Massachusetts rose above the international average in all three subject areas.

Connecticut students scored on average near the global average in math and higher than the global average in science and reading. Florida students on average scored below the global average in math and science and near the global average in reading, according to the AP.

The Associated Press contributed to this report.

PISA Results Show UK Students Lagging Behind Rest Of The World

 - The Huffington Post UK/PA

UK teenagers and students are lagging far behind their peers across the world as the country fails to improve its performance in reading, maths and science, a major international report reveals.

Young adults in Singapore, Estonia and Slovenia are storming ahead, despite the UK spending more than average on education. There has been "no change" in the country's abilities in the basics, according to the latest results from the Programme for International Student Assessment (PISA) study 2012.

The UK was in 26th place for maths, 23rd for reading and 21st for science, it found.

More than half a million 15-year-olds from 65 countries took part in the Organisation for Economic Co-operation and Development's (OECD) study last year, which assesses how students could use their knowledge and skills in real life, rather than just repeating facts and figures.

The findings show that the UK's average score for maths was 494 and in reading it was 499, broadly the same as the OECD averages for the subjects and putting the country on a par with nations such as the Czech Republic, France,and Norway.

In science, the UK's teenagers scored 514 points, above the OECD average and similar to results in Australia, Austria, Ireland, New Zealand and Slovenia.

But it also leaves the UK lagging far behind leading nations including Shanghai in China, Singapore, Hong Kong, Korea and Japan in each of the areas tested.

The OECD concluded that across all three subjects the UK's average performance in maths has remained unchanged since the PISA tests in 2006 and 2009.

Andreas Schleicher, special adviser to the OECD's secretary-general, said: "The relative standing and the absolute standing of the UK is really unchanged."

He added: "In essence you can say that the UK stands where it stood in 2009."

The results come despite major investment in education in the UK.

The study found that the UK spends more per head on education than the average across OECD countries, at around £59,889 per student between the ages of six and 15. The OECD average is £50,951.

It says that expenditure per student can explain about 30% of the difference in average maths results between countries, but that moderate or high spending per pupil does not automatically equate to particularly high or low performance in the subject.

The report shows that around one in eight (12%) of UK teenagers are considered "top performers" in maths scoring the highest results, this is a similar proportion to the OECD average. Around nine percent were top performers in reading, while 11% fell into this category in science.

And more than a fifth (22%) were "low performers", compared to the OECD average of 23%, meaning that at best they can solve simple maths problems. Around 15% were low performers in reading, along with 15% in science.

The results also showed that students from an immigrant background in the UK perform as well in maths as other students, whereas in many other OECD countries they score significantly lower.

It adds that UK students are generally positive about school, but like those in many other countries they are less positive about learning maths.

Mr Schleicher said that the latest PISA results could not be used to judge the Coalition Government's education reforms, saying "you couldn't possibly see anything of what's been done in the last couple of years."

Education Secretary Michael Gove said: "These poor results show the last government failed to secure the improvements in school standards our young people desperately need.

"Labour poured billions of pounds into schools and ratcheted up exam grades - yet our education system stagnated and we fell behind other nations."

He added that the performance "underlines the urgent need for our reforms".

Shadow education secretary Tristram Hunt said: "The PISA report is a big wake-up call. Eastern dominance centres on the importance that these high performing education systems place on the quality and status of the teaching profession as the central lever for driving up standards.

"This report exposes the failings of this Government's schools policy: a policy that has sent unqualified teachers into the classroom and prevented effective collaboration between schools."

Australian students slipping behind in maths, reading: OECD report

Video: Christopher Pyne says the results are a 'serious wake-up call' (ABC News)

Photo: The report shows Australian high school students are slipping further behind on maths, science and reading. (AFP: Anne-Christine Pouloulat, file photo)

Related Story: Labor refuses to back own move to cut university funding by $2.3b

Related Story: Pyne hails 'national model' after backflip on Gonski funding

Related Story: Abbott to honour Gonski school funding deals

Map: Australia

A new report comparing Australian high school students with 65 other countries shows the nation is slipping further behind in maths and reading skills.

The 2012 Programme for International Student Assessment (PISA) measures the mathematics, reading and science skills of half a million 15-year-olds from around the world.

It found Australian teens placed equal 17th in maths, equal 10th in reading and equal 8th in science.

Asian countries like China, Singapore, Korea and Japan are pulling ahead of Australian students in maths and reading.

The results show Australian students are slipping in maths performance by about a half a year of schooling compared to 10 years ago.

How the states/territories rated:

	Maths	Science	Reading
ACT	518	534	525
NSW	509	526	513
VIC	501	518	517
QLD	503	519	508
SA	489	513	500
WA	516	535	519
TAS	478	500	485
NT	452	483	466
AUST	504	521	512
Shanghai	613	580	570

The decline was stronger in girls than boys, with girls dropping to the Organisation for Economic Co-operation and Development (OECD) average.

The report also found a wide gap between students in different parts of the country.

Tasmania and the Northern Territory lagged well behind other states in all three areas.

About 14,500 Australian students from 775 schools were measured in the assessment, which was conducted by the Australian Council for Educational Research (ACER) for the OECD.

ACER's director of educational monitoring and research, Dr Sue Thomson, says gender, Indigenous status and socio-economic status still divide student outcomes.

Australian students from a wealthy background show a difference of about two-and-a-half years of schooling compared to a student from the lowest socio-economic group.

Questionnaire responses have also found girls hold a much more negative view about maths.

"Australia has slipped backwards to the type of gender disparity that was seen decades ago, and the performance scores of girls coupled with a number of particularly negative motivational attitudes puts Australia further away from providing all students with the same educational opportunities," Dr Thomson said.

Indigenous students are on average performing significantly worse than non-Indigenous students, a difference of about two-and-a-half years of schooling or more in maths, science and reading.

Your say: Read what you had to say about this article in our Storify.

Ms Thomson also raised concerns that more than two-fifths of students failed to reach base proficiency levels in maths.

"These are the levels at which the Ministerial Council set as not really ambitious goals but achievable goals for a country such as Australia and for a large proportion of students not to be achieving those results is quite a worry," she said.

Twelve other countries also showed declines in maths literacy over 10 years, with the largest decline occurring in Sweden, then Finland, New Zealand, Iceland then Australia.

See how the countries compare in the latest results:

Rightways ‏@rightwaystan

Education performance map http://public.tableausoftware.com/shared/6CBSYTXH3?:display_count=no … via @tableau

Embed: Map of educational performance, December 4 2013  

Results back Government's plan to focus on teachers, says Pyne

Education Minister Christopher Pyne says the results are a bad report card on Labor's years in office.

Video: Kevin Donnelly from the Education Standards Institute says he is not surprised by the results. (ABC News)

"In that period our results dramatically declined," he said.

"These are the worst PISA results since PISA began in 2000.

"They are demonstrably worse than anything that ever occurred under the Coalition government. They are a serious wake up call for the Australian education system."

He says the report's findings vindicate the Coalition's plan to focus on teacher quality.

Prime Minister Tony Abbott says the Government has fixed the school funding issue and school standards are the key to lifting rankings.

"We've got the funding sorted out. We need to have a debate about better school performance, about more principal autonomy, about more parental involvement, about more community engagement and above all else, about higher standards and that can now happen," he said.

Don’t panic about PISA

Simple country comparisons on a single assessment provide little guidance for policy development and should be viewed with caution, writes Jennifer Buckingham.

Federal Opposition Leader Bill Shorten has used the report to intensify pressure on the Government to adopt all of Labor's Gonski schools plan.

The Federal Government will go ahead with Labor's Gonski plan from next year but will only commit to four years of funding.

Mr Shorten says it needs to get on board for the full six years.

"It's time to implement Gonski in full. It's time to stop the political games and bandaid solutions and get on board giving the next generation of Australians the best start in life."

Opposition Education spokeswoman Kate Ellis says the figures are worrying.

"We have always conceded that the system has been broken, that the old Howard-style system is broken, which is why the Labor government went through the biggest reform of our school system in 40 years and why the Abbott Government now cannot afford to toss it aside."

Scribd: PISA 2012 Assessment and Analytical Framework

Kevin Donnelly from the Education Standards Institute says he is not surprised by the results.

"We have in fact been in trouble, if you like, for many, many years.

"We have trouble with disruptive classrooms...[and] we don't allow our teachers to mentor one another and to help one another. In places like Singapore, they actually respect teachers, children respect teachers, they are well-resourced.

"They have a lot more time to learn from one another and to improve classroom practice."
He says the debate is not only about funding.

"Money is important, but it gets back to a rigorous curriculum, effective teaching practice, good teacher training - so there are a few things we can look at there."

Results back push for needs-based funding model: Greens

The Greens say Australia's results in the report should put more pressure on the Government to adopt a needs-based school funding model.

Senator Penny Wright has attacked the deals the Government struck with Queensland, Western Australia and the Northern Territory on Monday for more school funding.

She says those deals ditch the so-called Gonski funding model in favour of a "no-strings-attached" model.

Video: ACER director Dr Sue Thomson speaks to Lateline (Lateline)

 

"It's not just the quantity of money handed out to the states, it's the way that money is spent," Senator Wright said in a statement.

"If that money doesn't get to the most disadvantaged students, Australia will continue to decline on an international scale."

The Australian Education Union says the widening gaps vindicate the predictions of the Gonski review.

"This must be a wake-up call to the Abbott Government," deputy federal president Correna Haythorpe said in a statement.

"They have consistently refused to embrace the Gonski recommendations for more equitable funding arrangements.

"Amid the constant backflips and chaos, it remains impossible to determine whether they even care about the inequity in education and the social and economic cost of it.

"The Government must make a full six-year commitment to the more equitable funding arrangements contained in the Gonski law and agreements if schools are to be given the resources and time required to lift achievement levels and break the connection between disadvantage and poor outcomes."

PISA in Brief 2012

http://www.scribd.com/doc/188865848/PISA-in-Brief-2012

China's education system could be model for other countries


http://player.cntv.cn/standard/cntvOutSidePlayer.swf?videoCenterId=806efeb522434775af811976bb0c6dd2&tai=outSide.english&videoId=20131206100648

A global education survey has revealed that when it comes to mathematics, reading and science, young people in Shanghai are the best in the world. The findings are part of the 2012 Program for International Student Assessment or PISA. Full story >>

For more on this, we are joined by Wang Yan, Director of the Department of International Communication at the National Institute of Education Sciences.

1. Good evening. It’s not unusual to see Chinese students ace an exam. But do you think training children to be good at taking tests at a young age is a good strategy, or something that should be changed?

2. There was criticism from experts of China’s basic schooling system. But as Chinese students continue to excel internationally, do you think other countries will begin adopting parts of China’s educational model?

Related post:
 Shy boys given rooms to grow as they are lagging girls - Rightways

New economic thinking

LAST weekend, over 400 top economists, thought leaders, three Nobel Laureates and participants gathered in Hong Kong for the fourth Annual Institute for New Economic Thinking (INET) conference, co-hosted by the Fung Global Institute, entitled “Changing of the Guard?”



So what was new?

In the opening session, Dr Victor Fung, founding chairman of Fung Global Institute, quoted Henry Kissinger as saying, “Americans think that for every problem, there is an ideal solution. The Chinese, and Indians and other Asians think there may be multiple solutions that open up multiple options.”

That quote summed up the difference between mainstream economic theory being taught in most universities and the need to build up a new curriculum that teaches the student to realise that there is no flawless equilibrium in an imperfect world and that there is no “first-best solution”.

Instead, what is important is to teach the aspiring economist to ask the right questions, and to question what it is that we are missing in our analysis. It is important to remember that theory is not reality, it is only a conceptualisation of reality.

Nobel Laureate Friedrich Hayek, one of the leading thinkers on open societies and free markets, explained why the practice of mainstream economics is flawed. In 1977, he said, “A whole generation of economists have been teaching that government has the power in the short run by increasing the quantity of money rapidly to relieve all kinds of economic evils, especially to reduce unemployment.

Unfortunately this is true so far as the short run is concerned. The fact is that such expansions of the quantity of money, which seems to have a short-run beneficial effect, become in the long run the cause of a much greater unemployment. But what politician can possibly care about long-run effects if in the short run he buys support?”

Sounds familiar on present day quantitative easing?

In his 1974 Nobel Laureate Lecture entitled “The Pretense of Knowledge”, Hayek showed healthy scepticism: “This failure of the economists to guide policy more successfully is closely connected with their propensity to imitate as closely as possible the procedures of the brilliantly successful physical sciences an attempt which in our field may lead to outright error.”

Hayek understood what is today recognised as quantitative model myopia. What cannot be easily measured quantitatively can be ignored. Then it is a small step to assume that what can be ignored does not exist. But it is precisely what cannot be measured and cannot be seen the “Black Swan” effect that can kill you.

In other words, economists must deal with the real world of asymmetry information, that there exists Knightian uncertainty, named after University of Chicago economist Frank Knight, what we call today unknown unknowns.

Unknown unknowns arise not just from accidents of Mother Nature, but from the unpredictability of human behaviour, such as market disorder, which is clearly complex and ever-changing.

If unknown unknowns are common in real life, then a lot of the economic models that appear to give us precise answers may be wrong. In other words, for every question, there is no unique answer and the solutions are “indeterminate”.

George Soros, who helped found INET, explained his theory of reflexivity based on the complex interaction between what he called the cognitive function (human conception of reality) and the manipulative function (the attempt by man to change reality).

His theory of reflexivity in markets differs from mainstream general equilibrium theory in one fundamental aspect. General equilibrium models assume that market systems are self-equilibrating, going back to stable state. Borrowing from engineering systems theory, we now know that this is a situation of negative feedback a system that gets disturbed fluctuates smaller and smaller till it returns to stable state.

The trouble with nature and markets is that positive feedback can also happen. The fluctuations get larger and larger until the system breaks down. Nineteenth century Scottish scientist James Maxwell discovered that steam engines can explode if there is no governor (or automatic valve) to control the steam building up.

At about the same time, English bankers learnt that banks can go into panic regularly without the creation of a central bank to regulate the system. Markets therefore need a third party the state to be the system “governor”. Free market believers think that the market will take care of itself. John Maynard Keynes was the first to recognise that when free markets get into a liquidity trap, the state must step in to stimulate expenditure and get the economy out of its collective depression.

In the 21st century, we have evolved beyond Keynes and free market ideology. Belief in unfettered markets has created a world awash with liquidity and leverage, but the capacity of advanced country governments to intervene Keynesian style has been constrained by their huge debt burden.

Larry Summers has pointed out that Keynes invented not a General Theory, but a Special Theory for governments to intervene to get out of the liquidity trap. The fact that we are still struggling with the liquidity trap means that economists are searching for new solutions, such as borrowing from psychology to explain economic behaviour.

The INET conference introduced the thinking of French literary philosopher, Rene Girard, and his theory of memetic desire, to explain how social behaviour more often than not get into unsustainable positive feedback situations, either excessive optimism or pessimism. How do you get out of such situations? Girard introduced the concept of sacrifice. We will have to wait for the next conference to explore this new angle.

Intuitively, all life is a contradiction. The sum of all private greed is not a public good. It does not add up. Someone has to sacrifice, either the public or a leader.

Schumpeter's great insight about capitalism is that there is creative destruction. He only restated the old Asian philosophy that change is both creative and destructive. But out of change comes new life.

In sum, contradictions are creative. What is new is often old, but what is old can be new.

 
Tan Sri Andrew Sheng is president of Fung Global Institute.

Malaysia's growth forecasts raised after the actual 5.4% in Q2, 2012

 Malaysia's economy up 5.4% in Q2, manufacturing, demand support growth 

KUALA LUMPUR: Malaysia's economic growth, as measured by gross domestic product (GDP), for the second quarter ended June 30 rose by an unexpected 5.4% year-on-year, underpinned by an expansion in manufacturing and robust domestic demand.

GDP growth for the first quarter was revised to 4.9% from 4.7%, while growth for the first half of the year stood at 5.1% compared with the same period a year ago. Compared with the first quarter, GDP expanded by 3%.

In the supply side of the economy, only the agricultural sector saw a contraction due to lower crude palm oil production. Manufacturing, services, construction and mining all posted growth. Domestic demand jumped 13.8% for the quarter and rose 11.8% for the first-half.

The country's second-quarter GDP numbers came as a surprise to many economists, whose median forecast was for a 4.6% expansion. Growth for the quarter even exceeded the most optimistic forecast of 5.2%.

Zeti (far right) attending the briefing. With her are other Bank Negara officials

Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said at a briefing following the release of the GDP data that the surge in private investment was the most encouraging aspect of the economy.

“Private investment has made a strong return because the investment climate has improved tremendously, with Malaysia moving up the rankings of various surveys in terms of competitiveness, costs and ease of doing business,” she said.

Zeti said the improvement was underscored by the higher implementation of investments by domestic and foreign investors. She added that civil engineering projects in the oil and gas, transport, utilities and services industries had helped spur growth in the construction sector.

By numbers, investments from the public and private sectors jumped 26.1% year-on-year for the quarter under review, with the first half rising 21.3%.


By sector, private investments rose 24.6% while public investments surged 28.9%. For the first half, private sector investments grew 22.4% while public sector investments expanded 19.5%.

Consumption rose 8.9% for the quarter and 11.8% in the first half. By sector, private consumption increased 8.8% for the quarter and 8.1% for the first half while public consumption expanded 9.4% for the quarter and 8.4% in the first half.

Zeti said monetary policy continued to be supportive of growth and that for the rest of the year, risks weighed on growth rather than on inflation with external headwinds still overshadowing the outlook.

She said it would take time for the global economy to recover and this would need action from various stakeholders.

“At this point, we're maintaining our forecast of 4% to 5% GDP growth for the year but this may change when the budget is announced (on Sept 28). This will come in at the upper range of the forecast if growth is robust,” Zeti added.

Alliance Investment Bank Bhd chief economist Manokaran Mottain has revised GDP growth for the year to 4.7% from 4.5% previously, with the second half to record growth of 4.5%.

He told StarBiz the third quarter would see expansion at its slowest.

Manokaran said despite the surprising growth figures, the global and domestic economy's outlook for the rest of the year would still be dampened by the eurozone debt crisis, slower expansion in China and tepid growth in the United States.

“We believe the eurozone crisis will continue to have an impact on trade and this will show itself in slower exports growth,” he said.

He added that with a drop in manufacturing activity, sentiments would be affected, leading to slower growth in the domestic-oriented services sector as consumption slowed.

Manokaran said Purchasing Managers Index (PMI) for July indicated that exports would slow as demand dropped in developed markets.

CIMB Investment Bank Bhd economic research head Lee Heng Guie said in a report that the leading index for June suggested that the economy could weaken in the second half.

“We caution that a sharply high base in the second half of last year poses a hurdle to year-on-year growth,” he said.

He pointed out that the global Organisation for Economic Co-operation and Development composite leading together with regional high-frequency indicators, including trade and PMI, were still under external pressures.

Meanwhile, the Statistics Department released data showing that July prices as measured by the Consumer Price Index gained 1.4% year-on-year to 104.8 and remained unchanged compared with the previous month.

By FINTAN NG fintan@thestar.com.my The Star/Asia News Network

Economists turn bullish following better-than-expected growth in Q2

 
PETALING JAYA: Several economists have raised their gross domestic product (GDP) forecasts for Malaysia following better-than-expected growth for the second quarter ended June 30.

Malaysia's economic growth for the second quarter rose by an unexpected 5.4% year-on-year underpinned by an expansion in manufacturing and robust domestic demand.

GDP growth for the first quarter was revised to 4.9% from 4.7%, while growth for the first half of the year stood at 5.1% compared with the same period a year ago.

Compared with the first quarter, GDP expanded by 3%.

Hong Leong Investment Bank's (HLIB) research unit said that following the strong-than-expected second quarter data, it had raised its full-year 2012 GDP forecast to 5% (previously: 4.5%).

For the second half of 2012, HLIB Research expected GDP growth to dip to 4.5% year-on-year in the third quarter (dragged by subdued trade and manufacturing and higher base in the third quarter of 2011) before improving to 5.1% year-on-year in the fourth quarter, yielding an average of 4.8% year-on-year (first half: 5.1% year-on-year).

“We are still positive that line-up of the Economic Transformation Programme projects for the second-half and 2013 could still provide a strong support to GDP growth despite external uncertainty,” said HLIB Research.

According to Bloomberg, Goldman Sachs also raised Malaysia's GDP growth predictions to 4.6% from 3.8% for 2012, and to 5.3% from 5.2% for 2013.

Meanwhile, CIMB Investment Bank Bhd economic research head Lee Heng Guie said given the steady performance in the first half, he had raised the 2012 growth estimate to 5%, from 3.8% previously.

“However, this still implies a slower growth of 4.5% to 5% in the second half versus 5.1% in the first half,” said Lee in a report.

Lee warned that external headwinds still warranted caution as they remained hurdles to Malaysia's export growth.

Meanwhile, Maybank Investment Bank (IB) Research said its 2012 and 2013 growth forecasts of 4.4% and 5.1% respectively were under review.

“Provisionally, we expect 2012 growth to be around 5%, which implies a slightly slower growth of 4.8% in the second half as the global purchasing managers index in July signals that the global economy hence external demand will remain soft in the third quarter.”

Maybank IB Research said domestic demand would continue to be well supported by initiatives to sustain consumer spending, policies and measures to spur investments, and the roll-out and progress of big ticket infrastructure projects and capital expenditures in industries like oil, gas and energy.

By THOMAS HUONG huong@thestar.com.my The Star/Asia News Network