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Saturday, 18 December 2010

The world trichotomised


WHAT ARE WE TO DO
By TAN SRI LIN SEE-YAN

I AM often asked: What's happening to the world? Indeed, the world seems so messed-up we can't take anything for granted. It does look like the world is not simply just dichotomised anymore.

We are used to talk of north versus south, haves versus have-nots, developed versus developing. All this has changed since Friedman's (N.Y.Times) discourse that the world is flat; but we have since realised the world is not really flat (Ghemawat, Harvard).

What's going on? Why is there no convergence. What's in store for the future? Before we begin the new year, I intend to devote my last column for 2010 to throw some light on these important questions, and what we can look forward to in 2011.

State of the world economy

As I see it, the situation in the United States blows hot and cold.
By December, the US economy reached a crossroad as a flurry of data showed consumption may be recovering fast enough to sustain growth in 2011, despite weaker investment, continuing high unemployment and a gloomy housing outlook.

What's promising is inflation continues to fall (core personal consumption prices rose only 0.9% in October).
This prompted former Fed chairman Volcker to conclude the economic outlook is for continuing but limited increases in economic activity for the next year or more.

He added, inflation is not a problem next year, it won't be a problem for several yearsI see no possibility, frankly, that a deflation will take place. Over a period of time, price stability will be conducive to a strong economy.

Make no mistake, President Obama is worried: What is a danger is that we are stuck in a new normal' where unemployment rates stay high in the face of continuing high corporate profits where businesses learned to do more with less.

However, the tax package awaiting approval in Congress could give a noticeable boost to economic activity next year providing a second stealth stimulus package without antagonising lawmakers reluctant to spend more to spur growth.

The total package could amount to US$900bil (larger than the first stimulus package in '09) of spending and tax cuts over the next two years. In 3Q10, the economy was stalling at 2.5% (2.5% in 2Q10).

This gives us a chance to do what most people thought wasn't going to be possible in this environment which is to provide a real forward lift to the economy relatively quickly, according to Summers (director, National Economic Council).

Economists have since grown more optimistic, seeing a stronger expansion in 1H11, with growth picking up speed as the year progresses (as much as 3.5% next year).

Odds on a double dip recession are now cut to 15%. Data released in recent days point to recovery gathering steam in 4Q10 (shoppers' purchases were up 0.8% in November and core wholesale prices rose a milder 0.3%), pointing to growth of 3.5% in the final quarter.

Nevertheless, while 4Q10 is shaping-up rather decent, the Fed continues to view the pace of recovery as still too slow to bring down the 9.8% unemployment rate. Its US$600bil bond buying programme (QE2) is expected to continue.

The euro-area remains under siege. Greece and Ireland are in International Monetary Fund's intensive care.
The fiscal crisis threatens to engulf the peripheral PIIGs (Portugal, Ireland, Italy, Greece and Spain). Yet, for all its sovereign bond risk turmoil, overall, its real economy is stabilising.

The Organisation for Economic Cooperation and Development (OECD) think tank raised its forecast growth in the 16-member nations sharing the euro, to 1.8% for '10 (2% in 4Q10), slow by US standard, but acceptable for the aging continent.

Growth across the euro-bloc will soften before picking up again: it is expected to average 1.6% in '11 and 1.8% in '12. Euro-zone growth slowed markedly in 3Q10 as Germany's rapid growth spurt lost momentum, intensifying pressure on Europe's weakest economies.

This deceleration reduced opportunities for the PIIGs to grow out of the current crisis by exporting to its neighbours. It also showed euro-zone lagging behind the United States which is doing much better.

So, recovery will be modest in the next two years, as deficit reduction plans weigh in on growth, and large imbalances in the peripheral nations with high debt are wound down.

This fans concerns of a widening chasm between Germany's buoyant prospects and continuing struggles of the PIIGs economies.

It highlights a dualism in Europe between core countries mainly in northern Europe and the euro-zone laggards which have since become a source of serious concern. Although Germany is doing well, it may not be enough to save others in the euro-zone. This perception of the euro-zone drifting apart has been and remains a driver of the sovereign debt crisis.

Continuing market jitters about the situation is one of the main risks to play out in 2011.
The outlook for stronger growth in Europe faces two big threats.

First, fiscal tightening is expected to begin with vigour next year. But there are already enough signs of intensifying social unrest. Second, growing tension in Europe's peripherals (viz. PIIGs).

Ireland and Greece are in recession with debt overhang ratios exceeding 100%. The austerity required of them is unlikely to be readily met. Spain and Italy are barely growing and they too need to tackle their budget deficits, with ratios too high to be sustainable.

Portugal has only started to act on its deficit. Delays have kept its economy afloat but made bond investors rather nervous.

The PIIGs account for 35% of the euro-area economy (18% without Italy). Their fragility has not so far outweighed the strength of the entire region.

However, they have outsized effects on monetary policy simply because of their impact on confidence, especially in the bond markets. It is interesting Germany and the European Central Bank (ECB) have taken a tag team approach to keep the euro-zone afloat: the former supports the zone's economy and the ECB, its financial markets.

One key success of the euro has been its financial integration, so much so its banks are now heavily exposed to each other's debts. So, more trouble in the peripheral nations could easily spread with dire consequences for the euro-zone as a whole.

Since the great recession, the emerging economies have been by far the biggest contributor to global expansion.

From Guangzhou to Sao Paulo, from Bangalore to Incheon, the big emerging economies have been roaring ahead, even as United States and Europe were mired in deep recession.

Spare capacity was rapidly used-up and fear of bubbles (from capital inflows following continuing monetary easing in US and Europe) was replaced by broader overheating and fear of inflation.

China and India led the way with sustainable high growth rates and with even higher imports.
As did Brazil, where rising consumer demand packed shopping centres, and imports in November surged 44%. But inflation lurks.

Nowhere has the economic mood been so ably lifted as in emerging East Asia (North-east Asia plus Asean 6), led by China. Emerging East Asia's gross domestic product (GDP) grew by 8% annually since 2004 (9% in '10) and is expected to continue to rise by 7% in 2011.

China will expand by 10% this year (+9.1% in '09) and 9% next year.

Similarly, Asean 6 according to the ADB will grow by 5% in 11 after expanding 7.5% in '10 (1.3% in '09).
In contrast, growth in the United States in '10 is expected at 2.8% (-2.6% in '09) and 3% in '11.

Euro-zone GDP contracted by 5.2% in '09, and set to recover by 3.2% this year, with growth of 1.4% in '11.
But inflation worries are causing a policy dilemma.

High food and energy prices plus capacity constraints in the face of the Fed's quantitative easing (QE2) will force central banks to raise interest rates more aggressively. But higher interest rates to fight inflation will attract even more funds. Inflation is highest in India (9%) and Brazil (6%): in China, 4%, S. Korea, 4%; Indonesia, 5.7%; Malaysia, 2%.

To ensure interest is kept at rates appropriate to their particular circumstances, some emerging Asia economies have resorted to selective controls to offset the impact of continuing inflows of cheap monies.
Manufacturing activity strengthened significantly in China and India in November, underlying a widening gap between two of Asia's largest economies and the rest of the region.

Not unlike Europe, Asia is being dichotomised into two economic camps as growth streams ahead in China and India, but grows at a slower pace in much of emerging Asia or stays relatively flat, as in Japan. But unlike Europe, where its life-wire (Germany) is moderating, emerging Asia's big brothers are pushing ahead: China recorded in November its 7th successive month of manufacturing expansion.

Similarly, India registered a blistering 8.9% growth in 3Q10, its third in a row exceeding 8%.
Their continuing expansion is fuelled by rapidly rising demand within the Asian community, thus sharing prosperity through reversing the tide in the directional flow of goods and services.

Focus has sharply swivelled to Asia: Before, we mainly worry about the Christmas and New Year seasons in the United States and Europe. Now we also look at Ramadhan, Deepavali and Chinese New Year.

There is a clear surge in intra-regional trade in Asia which grew at an average annual rate of 13.4% from 2000 to 2009, valued at US$1 trillion. Nearly 50% of Asian exports (ex Japan) now go to other Asian nations, more than the current demand for Asian exports from the United States, Europe and Japan combined.

Another 17% goes to rest of the world, meeting largely Russian and Brazilian demand.

The main driver of this drama: China and India. In 1916, Nobel laureate Tagore (Indian poet) roamed from Calcutta to Tokyo in search of one Asia. The poet's vision was misty. Yet, by end of the century, Asia is knit together in a value adding manufacturing supply chain stretching 5,000km from Seoul to Penang to Bombay.

Importing pessimism

As I see it, the world has changed, and dramatically since the great recession. The outlook for 2011 and beyond rests on what happens in three great areas: the United States, Europe and emerging economies.

Fair enough Japan is still an economic heavy weight but it has ceased to be dynamic and unlikely to surprise. Unfortunately, all three are heading in different directions with different growth prospects and having non-compatible policy choices.

The outcome depends on how increasing chances for friction play out. The United States and Europe avoided depression by working together with a shared economic philosophy.

Now both are preoccupied with clear domestic demands. They have since adopted wholly opposite strategies to deal with them: the United States continuing to stimulate until recovery is secured (i.e. falling unemployment) before tackling its fiscal and debt issues; euro-zone is dead-on fiscal austerity and consolidation, subjecting profligate members to tough fiscal adjustments now in exchange for assistance.

The United States continuing loose monetary policies and euro-zone concerns with sovereign debt defaults both encourage a continuing flow of virtually costless funds to emerging economies in search of higher returns.
Such massive capital inflows infuriates large emerging economies' central banks which are reluctant to raise interest rates (and attract even more such funds) so needed to dampen rising inflation.

Therein lies the policy dilemma for each of the three.
Bear in mind that over the next five years, emerging economies are expected to account for one-half of global growth, but only 13% of the increase in net global public debt.

This simply means that given divergent goals of policy, the world economy is unlikely to give any priority to global rebalancing (which is so badly needed) in favour of more of the same.

The consequence: widening the gap between debt ridden US and Europe and thrifty big emerging nations.
It need not be this way, of course. The United States and Europe can work out a deal to better regulate the financial system; with the United States starting early enough to put its fiscal house in order and Europe, institutionalising the euro and putting its banking system on a more sustainable footing.

On its part, major emerging economies can start rebalancing their macroeconomic policies, including adjusting the exchange rate to better reflect underlying market conditions.

This, of course, is the best case scenario. But I won't bet on it. I see continuing friction ahead, leading to more uncertainties in terms of policy actions but little effective international collaboration and co-ordination. That's life I guess.

In times of stress, subjecting national interest to the noble greater global interest is asking too much. So Asia, stand ready for another year of importing pessimism.

Former banker, Dr Lin is a Harvard educated economist and a British Chartered Scientist who now spends time writing, teaching and promoting the public interest. Feedback is most welcome; email:starbizweek@thestar.com.my.

Thursday, 16 December 2010

Settle loan or else...

State threatens to publish defaulters' names in newspapers

 
THE names of those who defaulted in the repayments of study loans from the Penang Government’s Education Fund will be published in newspapers if they fail to pay up by the end of the month.

Chief Minister Lim Guan Eng said the names of their guarantors would be published as well.

He said 1,685 defaulters had yet to settle RM7.54mil as of Nov 30 while 5,965 borrowers made prompt payments.

He said the defaulters included those who took loans in the 1970s.

“We need to keep the fund running to enable others to take loans to further their studies in certificate, diploma, degree, masters or PhD courses,” Lim told a press conference at his office in Komtar yesterday.

He said legal action would be taken against defaulters who did not pay up after their names have been published.

He said those who had taken study loans from the fund could check their status by calling the Students Loans Unit at Komtar’s 29th floor (04-6505627/5599/ 5165/5391) or visit the state government’s website (www.penang.gov.my).

Those who wish to apply for the loans could do so online through the same website from May 2 to July 31 every year.

On another education related matter, Lim said the state government had disbursed RM1.652mil in financial aid this year under the state’s Scholarship Trust Fund to help poor Forms One to Five students in the state.

He said the amount disbursed last year was RM1.539mil compared to RM625,440 in 2008.

He said the state had last year doubled the aid from RM240 to RM480 a year for those in Forms One to Three while those in Forms Four and Five got RM720 a year from RM360 previously.

Wednesday, 15 December 2010

Penang property a goldmine



Returns expected to soar above national average within next few years

PROPERTY in Penang will continue to remain a favourite choice among investors as it is expected to show returns that are above the national average.

Henry Butcher Malaysia (Penang) Sdn Bhd director Dr Jason Teoh said property investment was generally perceived to have a longer term horizon as it was not so volatile compared to stocks.

He said investing in property had proven to be a good hedge against inflation because the returns ge-nerated were higher than the Con-sumer Price Index.

“In fact, seasoned real estate in-vestors from Hong Kong and Singa-pore have predicted that real value will increase over the next few years.

“Among the reasons is Malaysia’s recent positioning in the top 10 list of the world’s most competitive countries,” he said in a statement in conjunction with the official launch of the lifestyle suites, 118@Island Plaza, at level seven of Island Plaza, Penang, this weekend.

The public is invited to the sales gallery to view the show unit between 10am and 6pm on Satur-day and Sunday.

Response to the initial sales preview had been overwhelming with 50% of the 106 suites sold prior to the official launch.

Henry Butcher Malaysia (Penang) is the sole and exclusive marketing consultant for the contemporary suites owned by Omega Moments Sdn Bhd.

Teoh said foreign real estate investors had complimented Pe-nang’s progress in offering some of the most attractive product designs, but at prices which were only a fraction of those in their home countries.
“Penang’s real estate market can now be benchmarked against some of the best schemes in Kuala Lumpur and Singapore,” he said.

He added that Penang, being voted among the eighth most liveable cities in Asia, on par with KL and Bangkok by ECA International, had created further excitement, especially among foreigners seeking a second home.

118@Island Plaza is the first alteration and amendment development of its kind, which when completed, will offer much demanded housing and office units for professionals and expatriates.

Each unit, ranging from 500 sq ft to 1,160 sq ft, is thoughtfully conceptualised and designed as part of Island Plaza’s remodelling programme to bring in greater vi- brancy.

For enquiries, contact Henry Butcher Malaysia (Penang) Sdn Bhd at 04-2298999.

Tuesday, 14 December 2010

China, stay true to civilisation

By Wang Gungwu
stonline@sph.com.sg

If the Chinese were true to their history, they would understand that the meaning of China lies in the ideals of its civilisation. Its leaders failed when they neglected creativity and lost confidence in the civilisation. 

THE question many analysts are focused upon now is how China would use its wealth to strengthen its armed forces. The Chinese word used to describe the link between prosperity and military power has historically been fuqiang.

This compound word comes from the ancient phrase fuguo qiangbing – enriching the state and strengtening the armies. It was first used in the classic text Chronicles Of The Warring States to describe the ideas of Shang Yang and his disciples.

They helped the Qin state in the 3rd century BC to overcome its six rivals and to create a centralised Qin dynasty, under its first emperor, Qin Shi-huang.

The phrase fuguo qiangbing has always been closely associated with the so-called Legalist or Realist thinkers who helped Qin. The dynasty did not last long. A century after it fell, Confucian officials were brought in to help manage the successor Han empire. These Confucians chose to be soft and turned away from explicit appeals to fuqiang.

The word fuqiang was not extolled again until the Meiji Revolution in Japan in the 19th century. Fukoku kyohei – Japanese for fuguo qiangbing – became Japan’s national slogan in following the model of Western imperialism. The goals of government were modernised to seek wealth through industrialisation and power through modern armaments. The slogan has since become associated with imperial ambition.

The analogy between the German and Japanese empires and China today is an easy one to make. But it arises from a very narrow view of history, drawing its lessons only from the modern European experience.
If we believe that industrialisation determines everything, new wealth and the power it creates can only advance in one direction: that is, towards rivalry and competition for dominance. The consequences are obvious.

We know the Industrial Revolu­tion led to Britain becoming the pre-eminent superpower for over a century, and that the Americans succeeded them. We also know that the Soviet Union tried to avoid the mistakes made by Germany and Japan.

They used a different ideological means of becoming No 1, and they failed. As a result, the Anglo-American dominance of the world was further extended. It could last a long while yet.

It is easy to understand why so many who talk about China as No 2 today warn against it following the examples of either Germany, Japan or the Soviet Union. China is actually very conscious of these modern examples and has consistently proclaimed that it would never seek hegemony or chengba.

This idea of chengba (hegemony) comes from the Warring States period, and is another goal that Confucian thinkers have systematically rejected. I believe Chinese leaders today are intelligent enough to have learnt the obvious lessons. But as China becomes more prosperous, and when its people know less of their Confucian heritage and admire more the wealth and power of the West, how are they to convince anyone that they would never go the way of fuguo qiangbing?

China’s history alone will not be sufficient for that purpose, since most of it is hard for non-Chinese people to appreciate. In any case, modern Chinese are not Confucians. On the contrary, the robust language of 20th century Chinese revolutions, the high emotions that Chinese nationalism has aroused, are closer to what Germany, Japan and the Soviet Union sounded like.

The modern language used conveys quite a different image. Thus China seems to be locked into the prevailing strategic thinking that sees any rising power as a danger to the status quo.

For the sole superpower today, the status quo does not refer to any institution or ideology, but to its remaining the only superpower. To remain No 1 is a duty. This means not only wealth and power but also the totality of ideals that Americans believe are universal.

If rising China were no more than what Japan and Germany have become today – wealthy but without military power – there would be little reason for the United States to be concerned.

However, China does not appear to be content to be rich but militarily weak. Thus, American leaders would not be reassured unless and until the Chinese are prepared to settle for the current German and Japanese model.

Different models of civilisation

THE Chinese say they would like the world to be a place in which there are several civilisations, with each modernising in its own way, at its own speed. That was the world they were accustomed to when there was no insistence on a single universalism. In such a world, if any civilisation considered itself to be universal, it would not have the power to impose its world view on others.

One can see a China enjoying a No. 1 position in a sort of local or regional “league”. It does depend on how China is defined.

In the beginning, there was a “China” centred on the shared cultures of the peoples of the middle and lower parts of the Yellow River valley. It took about 1,000 years during the Shang and Zhou dynasties – mainly the first millennium BC – for these peoples to recognise themselves as the Hua-xia of Zhongguo, quite different from those around them.

That Zhongguo consisted of many states, each with its own institutions, even scripts for the languages they spoke.

Then came the Qin dynasty, which imposed a single script, a single coinage, a single set of weights and measures, and so on. The civilisation that emerged was identified as something unique. The foreign peoples on its borders were seen either as hostile and greedy for China’s wealth, or friendly and willing to live peacefully with China. Being Zhongguo, in the centre, actually meant that China was the regular target of external tribes that did not share its civilisation. It was essential that China should always be strong enough to defend its borders.

China was severely tested after the Han dynasty, from the 4th century AD on, by a series of tribal invasions. These non-Chinese preferred Buddhism over Confucian and other Chinese ideas, and drove large numbers of Chinese from the north to the lands south of the Yangzi river.

By the time of the Tang dynasty in the 7th century, an amalgam of peoples and cultures began to define a new period of Chinese civilisation, one that the Chinese still consider glorious.

By confirming the elite’s belief that China’s civilisation could withstand any attack and still thrive, the elite could well have seen their China as some sort of No 1.

This faith sustained them during several centuries of division and weakness – from the declining Tang dynasty of the 9th century to the Northern and Southern Song dynasties of the 13th. These were centuries when China desperately defended itself against its enemies.

In the course of that defence, China acquired a powerful self-conscious identity. It was so strong that none of the Turkic, Tungusic, Tibetan and Mongol forces that had defeated them could overcome it. Even when the Chinese became subjects in the Mongol empire, they did not lose a keen sense of their own civilisation.

Eventually, the Ming dynasty (1368-1644) produced the first Han Chinese rulers for 500 years to rule over all of China, and they reaffirmed the ideals of the Han and the Tang. Fortunately, after the 17th century, the Manchu Qing dynasty did little to change the fundamentals of that civilisation.

In the light of Chinese history, what does it mean for China to be seen as No 2 now? Does it even matter, for the criteria used are not China’s? But for Chinese leaders to say that, they would have to have a keen sense of China’s history.

If the Chinese people were true to their history, they would understand that the meaning of China lies in the ideals of its civilisation, that China failed whenever it became closed. This was especially so when its leaders rejected change and experimentation, when they neglected the need for creativity and lost confidence in the civilisation’s ability to adapt to change. Clearly the civilisation faltered during the 19th century.

New leaders like Mao Zedong then emerged, eager to replace what they had with what they barely understood. And they were prepared to do this even when ideas and institutions they borrowed from the West brought their people almost to the edge of destruction.

The past 30 years have seen a remarkable turnaround. The willingness to be open has been moderated by wariness that the Chinese should not be carried away again by the urge to copy and imitate what has been successful elsewhere. There is a new caution that the revolutionary urges of the past have brought too many unsustainable ideals that destroyed more than they constructed. Lessons have been learnt about the importance of traditions that had served the people well before.

There are many in China today who appreciate that being impatient in the 20th century, as Mao was, was as dangerous as having been complacent before.

This is not the time for China to be ranked in a league with polities that are so different from it. Almost overnight, there has been the highlighting of something called the Group of 2.

Almost overnight, the US and China have been coupled as if they were in some race to become the world’s fastest gun or the fairest maiden. Who gains from this exercise of trying to fit China into a league defined by others who care little for its heritage?

There are many questions facing the Chinese. They need to remain cool and be neither boastful nor alarmed. For one thing, 30 years of reforms is too short a period to be more than just a beginning. For another, there is no single league for comparison.

The League of Wealth and Power that has been trumpeted is a poisoned chalice. Even if China does not drink from it but merely tries to hold it in its hands, there is a real danger of self-deception.

The most dangerous moment would be when China’s frustrated and excitable youth, with little interest in their country’s political traditions, are aroused by the idea of being just No 2. If they believed that, then China would find itself entering the bloody arena that the country’s literati ancestors had spent centuries warning against. I hope that wiser heads in China will not allow that to happen.

What many are seeking now to do is to restore faith in the idea that there are several legitimate civilisations in the world and therefore many other kinds of leagues that China could try to play in. There is, after all, no reason to compete in a league that is not of your own choice.

If China is true to its own civilisation, it would know that only a League for Cultural Achievement is worth the effort to compete in. Chinese civilisation has been much weakened, but this would be a league in which the Chinese people’s ancient and resilient civilisation could give them some advantage. — The Straits Times / ANN

> The writer is chairman of the East Asia Institute

Monday, 13 December 2010

Confucius Institutes - 5th Conference opens in Beijing




Play Video

The Opening Ceremony for the Fifth Conference of Confucius Institutes has been held at the Beijing National Convention Center.

Li Changchun, a senior CPC official, attended the event. Students enrolled at Confucius Institutes in a number of different countries performed at the ceremony.

Named after the nation's most renowned ancient philosopher and educator, Confucius Institutes are non-profit public institutions which aim to promote Chinese language and culture in foreign countries. More than 320 Confucius Institutes have now been established in 96 countries and regions, since the first site was inaugurated in 2004.

Li Changchun, a senior CPC official, attended the event.

Sunday, 12 December 2010

The Leadership Secrets of Genghis Khan, one of China's Emperors


A determined and focused leader

By ANDREW LEE
starbiz@thestar.com.my

Book review: The Leadership Secrets of Genghis Khan
Author: John Man Publisher: Bantam Books

THESE days, it seems, there exists a straightforward path to becoming a leader.

You leave school with the best grades possible, gain acceptance into a good college before obtaining a discipline from a reputable university in order to achieve the best.

You then choose to enter politics as you were active at grassroots level with a party whose principles you believe in, or because your father knows someone influential.

Five or ten years down the line (20 to 30 if you are unlucky), you sweep into power on a bed of half-truths and promises, delivered to the public with empty rhetoric that would even make Socrates weep.

This method appeals directly to the middle class because; the ability to pay for high education fees aside, the future has conveniently been mapped out for them.

Sure, only a select few end up leading a party, but so what if we don’t make it to the top?
There’s no need for any social mobility, or to break through the class barrier, as we sit comfortably among many.

There’s much more to be lost than gained by pushing for change – and God forbid we should come up against the less privileged, who outnumber us significantly. No, there’s no future in change – it’s much easier to contribute to the world, one day at a time, from within the safety nets we were lucky enough to be brought up in.

Contrast such mentality with that of a young Temujin. The year is 1181, and the Mongols, bereft of culture and education, are little more than warring nomads.

It is with a rival group of these nomads that Temujin finds himself in trouble with, and, initially pursued, he heaves a sigh of relief when they decided to back off.

Temujin isn’t yet the fearsome leader that history remembers him by, as John Man puts bluntly in his book The Leadership Secrets of Genghis Khan. At this point, he is “khan of nothing and no one”.

He takes his hat off, “drapes his belt around his neck” and kneels nine times towards the sun, scattering mare’s milk with flicks of his fingers. He feels, knows at this point, that he is destined to be a great leader of his people.

Within 20 years, he would have conquered most of Asia and a large part of Europe – “the greatest land empire in history”. All these were done by a man who, if the Mongols had any social structure at that time, many would have dismissed as having “no future”.

No doubt many historians will debate about how an illiterate young man managed to achieve such a feat.
Man argues that Genghis (actually pronounced Chingis) Khan might be the greatest leader of all time – and he might have a point.

Referring to the many categories created by Jim Collins in his leadership book Good to Great, he states that many good leaders fall into the trap of getting “stuck on level four ... egotistical, charismatic, driven by short-term gains and unable to look after his succession.” Obvious examples such as Alexander the Great, Attila the Hun, Napoleon and Tony Blair all spring to mind – but not Genghis Khan.

History has decided that Genghis Khan was no more than a warmongering leader, forever looking forward to his next conquest, with little remorse for his victims.

However, as Man points out, they often forget that he had a strong bond with his close family, in particular his mother – and that he respected women. When he marched into battle with his men, he made it clear that he would share their hardship.

His methods of conquest may have been terrifying, but it should be pointed out that he did not commit genocide per se. He arrived at every city’s doorstep with a choice – surrender, or the death of every male taller than his whip. His method worked – many a city from Beijing to Baghdad crumbled under his attack.

What is astonishing about this man is not just how he conquered vast amounts of land, but how determined and focused he was on his objectives.

Many of his rivals – the Chinese to the east and the Muslims to the west – lived in highly complex societies, with their poetry, spices and afternoon tea.

They simply could not cope with Genghis and his battle-hardened men, who could survive solely on grass.
Another key factor in Genghis Khan’s success was his disregard of riches – he was not distracted by spices or silk. His only mission was to unite his people – and then conquer the world.

However, it is folly to believe that Genghis did not appreciate cultural advances. Man points out that Genghis admired the Muslims and their culture, and would not have attacked their lands had a few of their leaders not betrayed his trust.

From his throne, he also employed the most educated men from the lands that he conquered (typically from China) to be his advisors. Perhaps those unwilling to change may yet find a career – as a yes man.

Genghis Khan

Author: Mick Yates 

Biography

Genghis Khan, the creator and Leader of the Mongol empire, was born around 1165 (dates vary wildly), and died in August 1227.

Genghis Khan portrait An excellent biographical source is Paul Ratchnevsky's book "Genghis Khan: His Life and Legacy". A book written in Mongolian, straight after Genghis' death, was The Secret History. In what follows, the Leadership analysis is my own, mistakes and all.
    
Original art by G. Radnaabazar, from the Mongolia Page Culture & History web site     

 Background

At the time of the rise of Genghis Khan, the Mongol tribes were disunited. They had a fiercely independent nature, a strongly held system of social rules, and were essentially shamanistic in religious beliefs. Their nomadic existence meant they relied on barter rather than money, but because of long standing in-fighting between the tribes, they were economically poor. Stories of eating "anything that moved" and even of some cannibalism in hard times persist.

Politically, whilst the Mongols clearly recognized their own tribal connections and blood ties, there was no "Mongol Nation".

The Tartars to their east, and the Keraits to their immediate west were enemies of the Mongols. To the south-west were the Uighurs, and due south, the Chinese Chin dynasty was well established. The Chin were powerful enough to extract dues of various kinds from their northern, nomadic neighbors. And, to the far west, stretching to the Black Sea, the Islamic Sultanate of Muhammad of Khwarazm prospered.

The times were cruel, with execution being the usual punishment for transgressions. Wars were fought with no mercy for the opposing army. Slavery was the norm for conquered peoples. On the other hand, the Mongols had an intense sense of loyalty, hated theft, had a history of the acceptance of the beliefs and the way of life of others, and tended to be generous to people they trusted.

Not surprisingly, this background helped shape Temuchin, who later became Genghis Khan.

Conquests

Temuchin's first major patron was Toghrul, of the Keraits, who he saw as an adopted father. Toghrul was probably the strongest leader amongst the Mongolian tribes at that point, although he was constantly under threat both externally and from family infighting. When Temuchin's wife Börte was abducted by the Merkits, Toghrul and Jamuka (Temuchin's blood brother, his "anda", and eventually his enemy) helped rescue her (1183/84).

But not everything went Temuchin's way, with a major defeat in 1187 leading to almost a ten year gap in his life history, until 1196. That year Temuchin successfully attacked the Tartars. He then rescued Toghrul from exile, who was given the Chin title "Wang Khan". Jamuka declared against Temuchin in 1201, when he was elected "Gurkhan". In 1202 Temuchin exterminated the Tartars, and that year Wang Khan broke with Temuchin. Thus, and perhaps inevitably, Genghis was at war with the Keraits.

In 1203 Wang Khan died, and Genghis assumed his title of King of the Keraits. Jamuka was betrayed to Temuchin, and died in 1205. Thus the stage was set for Temuchin to be elected "Genghis Khan", over all of the Mongolian tribes, in 1206.

In 1209, the Uighurs submitted to Genghis, leaving him free to concentrate on the Chin and to refuse to pay tribute to them. Eventually, after many battles and even a withdrawal to Mongolia, Genghis destroyed Zongdu in 1215. This was the Chin capital (later to become Beijing), so the Chin capital moved south to Nanking (Kaifeng).

Treacherously, and somewhat stupidly, soldiers of Sultan Muhammad of Khwarazm killed ambassadors from Genghis, forcing him to declare war on that Islamic empire in 1219. Genghis won in 1221. His Empire stretched from the Korean peninsular almost to Kiev, and south to the Indus. It was the largest land empire ever seen.

Genghis was thus now able to focus his time on establishing an effective administration of the Mongol Empire, whilst keeping internal strife under check and setting his succession in place.

He died in August 1227 (the cause is not certain), having named one of his sons Ogödei Kha'an his principal successor. Ogödei is remembered by history as probably the most principled of the sons, explaining Genghis' choice.

Genghis' youngest son Tolui (by all accounts the cruelest of his sons) was not chosen - but Tolui's son became Khubilai Khan, later the first Yuan Emperor of China.

Values

Genghis Khan's value system was visible to all, and he certainly "walked the talk".

He totally shared his people's belief in the nomadic way of life, recognizing that, in war as in the hunt, booty is the main aim .. and winning was what counted. However, amassing material wealth did not matter much to him, as he shared everything with his loyal supporters. He was seen as a most generous Leader.

VaseAs an individual, he wanted power. He was a physically strong man, although he was probably not a "hero" in the sense of an outstanding hand-to-hand fighter. He encouraged his supporters to be frank and speak without ceremony, and usually moderated his passion and anger with thoughtful responses.

Genghis also demonstrated a rather liberal and tolerant attitude to the beliefs of others, and never persecuted people on religious grounds. This proved to be good military strategy, as when he was at war with Sultan Muhammad of Khwarazm, other Islamic Leaders did not join the fight against Genghis - it was instead seen as a non-holy war between two individuals.

Whilst Genghis was himself illiterate, he understood the power of spreading ideas via the written word, and used it to administer his empire. He was responsible for the spread of the Uighurs script as the common Mongolian alphabet. He was relentless in learning new things, absorbing ideas from other cultures as often as he could.

Against his enemies, vengeance was a constant theme, reflecting his Mongol cultural heritage, and he slaughtered people with ease. Terror was always one of his principle weapons of war. He laid waste to entire cities and populations that resisted his armies, although he often by-passed others that submitted.

He was clearly most perceptive about politics in rival tribes and cities, and he understood what drove individuals. Usually his strategies involved finding psychological ways to undermine his enemies, based on these perceptions

On the other hand, he recognized the values of his individual enemies. He would put to death a soldier who had tried to be disloyal to their own commander, by, for example, betraying the commander to Genghis. However, he would pardon and even bestow honours and responsibility on those who had fought loyally for their commander - even if against Genghis. In fact one of his most trusted generals, Jebe, was once a young opposing soldier who shot Genghis' horse from under him in battle.

Envision

Genghis Khan actually used the 4 E's of Leadership, even if he didn't know it!
The vision was one of economic prosperity for his people, power for himself, total destruction of his enemies and fairness for willing subjects.
At the beginning it is doubtful that he had a grand vision of building the World's biggest empire. Rather, he recognized that rich plunder was the best means of preventing the Mongol tribes from fighting each other. He also recognized that this would allow them to preserve their nomadic way of life.

Enable

His enablers included good use of military technology, a unique organization of his army, promoting leaders on merit not lineage or family, definite rules of engagement in war, and a clear administrative system for conquered peoples.

Whilst his army had no unique weapons, he put to good use the short horse stirrup, to give better control at close quarters. His elite troops were quite heavily armored, although others were more militia-like. His soldiers used the Central Asian compound bow, which had the power of a European crossbow (although they didn't know it), whilst being half the size of a long bow.
Mongolian compound bowHe organized his army into units of "ten thousand", not sorted by tribal affinity as was historically the case. This reduced the possibility of internal friction. He also had an elite "Household Guard" with hand-picked commanders, upon which he relied for the most difficult tasks. All of his officers were instructed never to abuse their soldiers.
Rules of engagement were clear to all, and rigorously enforced. For example, if a soldier deserted his troop, he was executed. If a soldier failed to stop to help a fellow warrior whose baggage fell from his horse, he was executed. If two or more members of a troop made a great advance, but were not supported by their comrades, the latter were executed. And so it goes on ...

In terms of battle strategy, it seemed that there was little unique about Genghis' approach, building as it did on the Mongolian way of hunting. He also tended to close in on the enemy only when he was sure of overwhelming them - although he did loose some battles, even then. It seems that the thoroughness, fierceness, courage and total dedication of his troops were what carried the day.

In peacetime, Genghis developed unique administrative organization structures, designed to pre-empt feuding. the unit was not the tribe, family or aristocracy - but based again on tens, hundreds and thousands - "mixed and matched". Leadership was, as ever, based on merit. And he organized a system of internal communication by horse riders. (As an aside, the way some of these riders behaved caused much distress to the populace. They were accorded first right to virtually anything they wanted from local people as they rode across the country, and often abused this right. Genghis was not perfect in his adminstration ...)

Genghis' legal code (The Yasa of Chingis Khan) was firmly based on Mongol common law, but written down and extended as cases arose. And, as for his armies, the rules were clear and tough. For example, theft of any kind led to execution, and adultery was also punishable by death for both parties. He also rigorously enforced the Mongol religious taboos, although as noted before his administration was tolerant of other people's beliefs. On the downside, it should be noted that the continual pursuit of booty and plunder meant that many valuable artifacts were destroyed as he conquered, both religious and otherwise.

In no way am I trying to justify the more uncivilized of these rules .. but I simply want to point out that the clarity and universality of Genghis' rules ensured that his empire worked.  

Empower 

It may be difficult to see that a Leader as strict as Genghis practiced "Empowerment". However if we define "Empowerment" as a contract between a leader and his followers for mutual trust and accountability, it was certainly central to Genghis' approach.

Merit was Genghis' guiding principle in choosing his leaders, both in wartime and when at peace. He did use the noble group as commanders, but his most valuable generals were solely picked on merit. He trusted these people to get the job done, although he clearly held them accountable for results

The army units were led by commanders personally picked by Genghis. His commanders could be from his immediate family, lowly sheep herders, or even conquered warriors he trusted and respected. Commanders were expected to have their troops ready for battle at all times - else they were replaced. All of the soldiers from whatever rank thus literally had the possibility before them of becoming commanders, based on their own merit.

Net, the Mongol army fully agreed with the goals of their Leader, and accepted the rules under which they fought. They totally trusted Genghis, and would rather die than let him down. In that sense, empowerment was clearly at work.

Energize 

It seems clear that Genghis was consistently reflecting the real desires of his followers. He unleashed their need to escape from a poverty cycle, rather than simply focus them on visions of world conquest. Then, he made the "enemy without" the tool to prevent internal conflict.

It is perhaps most difficult to assess exactly how Genghis Khan energized his people, as almost no speeches are accurately recorded, and he himself could not write. However, "The Secret History" and several Persian chroniclers provide a few Candleclues.

Whilst Genghis sought power for himself, he also was careful at every stage to offer his followers major gain from their conquests. He shared his animals, his clothes, his food and his plunder with his people, almost irrespective of their social position.

He constantly demonstrated his loyalty to his trusted people, and his generosity surely encouraged all to follow. Rules were clear, rewards were many, and merit was a guiding principle of his administration.

When he went into battle, he very clearly intended to win. His people knew they followed a winner. Even in matters of vengeance, or of being insulted (as was the case with Sultan Muhammad), he very obviously put things in terms his followers could deal with and act upon.

Finally, he was totally true to his own value system, in a way that was obvious to both his friends and his enemies. This in itself must have provided significant energy to his followers.

Aftermath

Genghis Khan forged the unification of the Mongol tribes, and reversed their decline in living conditions. 

Trade flourished, and contact with distant lands, including Europe, was encouraged. He set in motion the events that created the World's biggest land based empire, including the creation of the Yuan Dynasty in China. Importantly, his firm stand on his society's ethical rules and his intolerance of misdeeds led to a marked change in the social climate. Inter family rivalry all but disappeared, and peace and order were very evident to outside visitors, including European travelers.

As Microsoft Encarta says:

"The greatness of the khan as a military leader was borne out not only by his conquests but by the excellent organization, discipline, and maneuverability of his armies. Moreover, the Mongol ruler was an admirable statesman; his empire was so well organized that, so it was claimed, travelers could go from one end of his domain to the other without fear or danger".

Or, as in the introduction to the Genghis exhibition at the Royal British Columbian Museum said:
"Genghis Khan pledged to share with his followers both the sweet and the bitter of life. In structuring his army, he integrated soldiers from different tribes, thus inspiring loyalty to the Mongol army as a whole rather than to a specific lineage. He gave his enemies one simple choice: surrender and be enslaved, or die. By consistently enforcing discipline, rewarding skill and allegiance, and punishing those who opposed him, Genghis Khan established a vast empire".

For the people he conquered, the impact was very mixed. The Chinese fields got turned into nomadic pasture, adversely affecting the Chin peasants and causing hardship. On the other hand, for the cultures that he and later Khubilai Khan ruled, like the Chin, the encouragement of the exchange of knowledge and ideas helped them develop. For example, the Chinese became acquainted with Iranian medical knowledge and astronomy, and in return the peoples of the Middle East learnt much from China.

Unfortunately, unlike earlier days, increased prosperity meant that the lifestyle of the Mongol nobles tended to edge too far past that of the commoners. And, the sheer size of the empire and the extent of the losses in Mongolian manpower meant Genghis' empire was stretched thin.

Finally, recall that warfare and booty was the order of the day for the nomadic existence. So, in gaining a stable empire, the Mongols had to get used to the money economy. And, just as the administration came under control, so the administrators themselves became less militarily capable, and more intent on self-gain.

It was perhaps inevitable that, on his death, the empire was destined to split between his three remaining sons.
Eventually, though, four Mongol Leaders became great Khans in their own right. It is a tribute the the memory of Genghis Khan that they did not war between themselves - rather they linked co-operatively together in separate Khanates to "rule the world".

Perhaps the most important Khan was Khubilai, who founded the Chinese Yuan dynasty. This dynasty flourished from from 1279 to 1368, and had a lasting effect on all aspects of Chinese life.

It is thus very clear that Genghis was a Leader with a "capital L".

China has a long record of helping Africa


WikiLeaks cables have added to the western perception of China's self-interested presence in Africa. It is far from accurate

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    Chinese premier Wen Jiabao embraces a local chief standing next to Ghana's then president, John Kufuor, in 2006. Photograph: Li Xueren/AP
    It's not surprising that the spotlight has fallen again on China's role in resource-rich Africa. Concerns have been evident recently among NGOs, the media and foreign governments, even before this week's release of diplomatic cables. This, despite the fact that the Chinese presence there goes back to the 1950s.
    There is a western stereotype that sees China as a very aggressive newcomer, disregarding human rights and only being there for narrow national self-interest. China's investment in Africa is often characterised as a plundering of mineral resources accompanied by neglect of the welfare of the local populations. And the Chinese government has been criticised for not addressing the "reform agenda" seen as essential to Africa's future stability and prosperity.
    Is there any basis to these kinds of accusation? Not at all, in China's view. Given its record of helping African people, the Chinese government and commercial sector are entitled to feel angry. In the 1950s, China and Egypt established diplomatic relations, and Beijing sent the first team of experts from various fields like medicine, agriculture, water conservation, electricity generation and engineering. Since then China and African countries have developed good long-term relationships, supporting each other politically and co-operating economically.
    Over this period, China has helped Africa develop hundreds of programmes including the establishment of textile factories, hydroelectric power stations, gymnasiums, hospitals and schools. Among the most well known is the Tazara railway between Dar es Salaam, Tanzania and Kapiri Mposhi, Zambia, which was completed in July 1976 after six years of labour by more than 50,000 Chinese workers, at a total cost of about 1bn yuan (£95m). What Africa has seen in the Chinese workers is a spirit of diligence and sacrifice.
    China's aid to Africa extends beyond the technological. China has so far sent medical teams to 43 countries, with a total number of 16,000 people involved, reaching 240 million African people in medical need. It is one way the Chinese people seek human contact with those from other nations, and it has benefited both parties.
    With the fast growth of China's economy, economic co-operation between China and Africa is increasing in all areas, alongside the traditional aid programmes. Trade volume between two sides has reached $106.8bn (£67bn) in 2008, twice that of 2006 and 10 times more than in 2000. There are now 1,600 Chinese firms based in Africa. Since 2005, China abolished tariffs for 190 items imported from over 30 of the poorest countries in Africa, thus enabling Africa to double its exports to China.
    Boosting aid and training, offering debt forgiveness and zero tariff imports from the world's poorest countries were key Chinese pledges in the September 2010 UN summit on the millennium development goals.
    Perhaps it is the very size and scale of this programme of investment and aid that risks a backlash. The west continues to query the morality of China giving assistance to countries with bad human rights records or governance problems. But those who have benefited most from China's aid programmes are the African people. Is it moral to leave African people in dire poverty because of their bad governments? The children of criminals should not be punished for the wrong they have not done. They deserve their share of things.
    Then what about self-interest? There is no denying that China will protect its own interests through trade and investment. But when has the west ever thought that free trade was harmful for Africa? And what of its own record in there? China remembers that it was its African friends who voted China into the United Nations. Africa is confident that China will not colonise Africa because China understands the humiliation of colonisation from its own experience.
    Maybe west and east should calm down and look at themselves. In the west there has been criticism of a homegrown aid policy model, which places tough terms and conditions on aid. An emerging Chinese way of supplying aid might be another possibility, a challenge to the west, but also an opportunity. It is surely more constructive for the world community to co-operate and make progress. The words of George Bernard Shaw are perhaps more important today than they were even in his own time: "We are all dependent on one another, every soul of us on earth."
    As a product of a Chinese education, I was taught about the west's past record of colonisation in Africa. But at the same time, I could also see the movie Out of Africa in which a young Danish woman, Karen Blixen, made her home in Kenya, then British East Africa, and built schools for children there. Blixen is what the west and China have in common. That is the most precious capital.
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