A Christmas wake-up call

Image by Getty Images via @daylifeTweet

PUTIK LADA By RAPHAEL KOK

Christmas is the time for us to redeem and reconcile our relationships with people that we care about. It’s a time for us to remember and rekindle the passions in life that we dream about.

IT all began in a little town called Bethlehem, where a baby was born in a manger. Over centuries, it has captured the joys of wintertime like listening to sleigh bells ringing, building snowmen in the meadow and roasting chestnuts on an open fire.

With or without snowfall, Santa Claus always comes to town whenever the season is upon us, in the malls and on the streets.

Today, Christmas is no longer just a religious or cultural festival celebrated in the West, but a global event transcending race, religions and cultures.



Much of its universal appeal lies in the values embodied in the spirit of Christmas. The highlight at any Christmas party, whether hosted by Christian families, schools, offices or friends, is the exchange of gifts.
Christmas is about goodwill to all and sharing between loved ones.

Of course, cynics would say that Christmas also epitomises the sin of greed, considering how much people spend on Christmas decorations, shopping and parties.

However, that says more about human nature, rather than Christmas itself. After all, how we celebrate Christmas is very much like how we celebrate life.

In life, just like during Christmas, we expect to be rewarded for the good things we have done. Life, just like Christmas, is about dreams and desires.

True, more often than not, they are materialistic in nature. True, we always want to have more than what we already have, and that there is no end to dreams and desires.

There’s nothing wrong with that. Instead, where we go wrong is not knowing what we truly want out of life. We instead want things that bring little value to our lives.

We crave for more clothes, cars, properties and sources of physical affection. We crave for the same things we already have in abundance, except in different designs, colours and sizes.

We are like kids crying out for toys, ice-cream and a playmate, with no time to think of the consequences.
However, there’s got to be more to life than chasing every temporary high.

Just like Lord Buddha centuries ago, Mark Zuckerberg exhorts us to eliminate desires. Not just any desire, but desires that don’t really matter to us to begin with, or any more.

Having desires is not greedy. Having false desires is.

Our fragile minds, wrecked by insecurities, are always vulnerable to being incepted by foreign ideas. We constantly worry about what others think of us, and what they tell us we should be like.



Not only are we weighed down by excess material and emotional baggage, but we are also forced to abandon our own innermost dreams and desires.

Only when you have eliminated your false desires, will you discover what you want, what you really want.

Basically, start doing the things you have always dreamt of doing but never did because you kept telling yourself “Not this weekend, there’s a sale”, “Not this month, peak period” and “Not this year, saving for a bigger car”.

And it doesn’t just stop there. If you fail to recognise the things that truly give you joy, chances are that you will fail to recognise the things that truly give joy to the rest of the world.

Getting a gift for someone is never easy. We can’t read minds.

Sure, you may ask them what they want, but that’s rather spoiling the whole idea of a gift or they may be too embarrassed to reveal their innermost dreams and desires to you anyway.

The true value of a gift is not how much it’s worth to the giver or anyone else, but to the recipient.

How much the person appreciates the gift is a measure of how much you actually know and care for the person.

As noble as our intentions may be, the act of giving itself is simply not enough. Yes, it’s the thought that counts. But with more thought put into a gift, the more value the gift has.

So make your gifts count, be it to your family, friends or lover.

Don’t just go for the safe gifts like chocolates, Hallmark greeting cards, mugs or even expensive jewellery.

Make an effort to think hard about what the person truly wants. It may be something the person never even thought about having.

Don’t just buy something off the shelf. Forget about the price tag.

Be original. Go the distance. Fly to the moon and back. Like writing a song for your girlfriend that she can tell everybody this is her song. Don’t just say “I Love You”, say “I Love Us”.

Sometimes, the greatest gift is simply changing the way we treat others. Like being more obedient to your Mum and Dad. Or stop yelling and giving unreasonable deadlines to your employees.

And instead of just giving away monetary handouts such as bonuses, subsidies or salary increases every year, governments should also give its people greater freedom to express themselves.

As a wise prophet once said, man does not live by bread alone.

People should also be entitled to ask questions like “Who is producing and selling this bread, was there an open tender exercise?” and “Why do I only get one loaf, and my neighbour gets two?” without fear of persecution.

Whoever we are, rich or poor, Christmas ultimately serves as a wake-up call for us to change our lives for the better.

It’s the time for us to redeem and reconcile our relationships with people that we care about. It’s a time for us to remember and rekindle the passions in life that we dream about.

There’s something magical about Christmas. It’s the magic that makes us believe in miracles, and make miracles happen. It’s the magic that makes us rediscover our freedom and power to dream.

So, although it’s been said many times, many ways – have yourself a merry little Christmas, for now and always.

The writer is a young lawyer. Putik Lada, or pepper buds in Malay, captures the spirit and intention of this column – a platform for young lawyers to articulate their views and aspirations about the law, justice and a civil society. For more information about the young lawyers, visit www.malaysianbar.org.my.

Learning From The Masters of Management

Tweet

Dan Schawbel, Contributor

Adrian Wooldridge

I recently spoke with Adrian Wooldridge, who is the author of Masters of Management: How the Business Gurus and Their Ideas Have Changed the World – for Better and for Worse. Wooldridge is the management editor and “Schumpeter” columnist of The Economist. He was educated at Balliol College, Oxford, and All Souls College, Oxford, where he held a Prize Fellowship. He was formerly The Economist’s Washington bureau chief and “Lexington” columnist. In this interview, he talks about how the field of management has changed over the past decade, the difference between management and leadership, and more.

How has the field of management changed in the past decade?

Management has been revolutionised by two great changes over the past decade. The first is the rise of the internet. A decade ago the internet was still a fancy reference tool and Google was still a start up. Today the internet is reorganising the world. The internet is not only spawning an entire ecosystem of new businesses. It is reshaping the way that even the most conservative companies organise their business.

The second is the rise of emerging markets. A decade ago we still referred (often pityingly) to the underdeveloped world. Today we regard the emerging world as a hotbed of growth and innovation. Investment houses are pouring money into the BRICs even as they despair about stagnating Europe. Multinationals are ‘offshoring’ research and development as well as manufacturing to India and Brazil.

Are all managers leaders? What’s the difference between management and leadership?

No: not all managers are leaders (and not all leaders are managers: some great leaders such as Winston Churchill have been hopeless everyday managers).

The great distinction between the two lies in the choice of direction: leadership is about choosing where to go while management is about choosing how to get there. Jack Welch was a great business leader because he changed General Electric’s strategic direction with his emphasis on being number one or number two in a business or getting out. A secondary distinction lies in inspiration: the best leaders not only set a direction but inspire their followers to strain every sinew in reaching their new destination. There is nothing second-rate about management: great leaders mean nothing without the nuts-and-bolts men and women who put their visions into practice and make sure that the trains run on time. Incremental changes can sometimes add up to big changes. But given the uncertainty of the current business world—the sudden gusts of change that blow from unexpected directions—leadership is more important now than it was say fifty years ago when ‘organisation man’ ruled the roost.



Can you name a few management gurus that you’ve been observing and explain how they have helped make change?

These astonishing changes of the past decade—the world remade by the internet and turned upside down by emerging markets—have changed the pecking order among business thinkers. You are probably more likely to find a mind-changing article in Wired than in the Harvard Business Review or from an Indian than from an American-first mid-westerner.

The business gurus that I pay most attention to come in two guises: geeks or third-world firstists. Christopher Anderson made waves with his book on The Long Tale (which argued that the world of niches is replacing the world of mass markets). The book has had a huge influence not only with high-tech companies but with other organisations (retailers for example) that are seeing their markets redefined by the internet.

I suspect that his work-in-progress on 3-D printing will also have a big influence (though there is a lot of work in this area). V.G. Govindirajan of Tuck Business Shool has produced exemplary work on ‘frugal innovation’ (the idea that the most interesting form of innovation in the emerging world is about radically reducing costs rather than adding more bells and whistles. This has had a huge impact on General Electric which is producing a new generation of ‘frugal’ medical products. John Hagel and John Seely Brown have produced equally fasinating work on how these ‘frugal products’ will send a wave of disruption through rich countries, as traditional producers are forced to cut costs dramatically or see their markets eaten up by emerging-market giants.

What will the new management gurus of the future look like?

The management gurus of the future will look more like the class of 2010 at CEIBS or the Indian Business School than the class of 2010 at Harvard Business School or Wharton. They will also look more like the class of 2010 at the Stanford School of Engineering than the class of 2010 at the Stanford Business School: white faces will give way to ‘faces of colour’ and classic business school types will give way to engineers and other sorts of geeks.

Masters of Management

For the past century business thinking has been dominated by the United States. The bulk of the business cases have been about American companies. The bulk of the tools and techniques have been dreampt up by American managers. The driving assumption has been that if you don’t measure up to American standards—about how you organise your company or measure your performance—you are doing something wrong. That model was shaken by the rise of Japan but reasserted itself in the 1990s. It is now being shaken up even more thoroughly by the rise of a huge variety of emerging world companies. The business gurus of the future will come from emerging world—not just from India (which has cornered the market for the moment) but also from China, Indonesia, Turkey and Nigeria.

For the past century technology gurus have played second fiddle to strategy gurus (or even marketing gurus). Peter Drucker was less interested in technology than in the sociology of organisations. Tom Peters made little use of his training as an engineer in his voluminous writing. Technology is now at the heart of business thinking rather than an optional add on. Technology gurus are rewiring our thinking about organisations. And gurus from other disciplines face a stark choice: think deeply about what is happening in the world of the internet or face irrelevance.

Dan Schawbel, recognized as a “personal branding guru” by The New York Times, is the Managing Partner of Millennial Branding, LLC, a full-service personal branding agency. Dan is the author of Me 2.0: 4 Steps to Building Your Future, the founder of the Personal Branding Blog, and publisher of Personal Branding Magazine. He has worked with companies such as Google, Time Warner, Symantec, IBM, EMC, and CitiGroup.

 Newscribe : get free news in real time 

Civil servants shortlived bonus joy for double payout to 3,054!

Tweet

The bank forgot to withdraw the previous instruction, which led to the double payout - Datuk Farizan Darus

By Fong Kee Soon
The Star/Asia News Network

GEORGE TOWN: About half of the civil servants employed by the state have been mistakenly paid their half-month year-end bonus twice, through a banking error.

State secretary Datuk Farizan Darus said the double bonus' was erroneously paid out to 3,054 civil servants.

He said the bank had intended to pay the salary for December on Monday and the bonus on Tuesday the following day.

“However, the State Government felt it was better to pay everything on Monday and instructed the bank to do so.

“The bank forgot to withdraw the previous payment instructions, which led to the double payout of the bonus,” he told a press conference on Wednesday.



Farizan said the problem was realised on Tuesday itself when word got out to civil servants from several state agencies who did not receive the double bonus'.

“They asked to be paid twice as well, as they did not know it was a mistake by the bank,” he said.

Farizan added that the bank was working on debiting the extra bonus from the civil servants' bank accounts.

He said that at the time of the press conference, 233 accounts involving a sum of RM164,000 had yet to be sorted out and the bank was expected to resolve the whole matter soon.

Farizan said the State Government was advising those who withdrew the extra bonus to co-operate with the bank.

Chief Minister Lim Guan Eng had announced last month that the State Government would be paying out a half-month bonus with minimum payment of RM800 for state civil servants this year.

Civil servants were also paid a bonus of a half-month salary with minimum payment of RM600 in conjunction with the Hari Raya celebration in August this year.

Best startup ideas of 2011

Tweet

by Rafe Needleman

Will a health-monitoring watch be the next mobile platform?(Credit: Basis)

 

This was the year of mobile startups, but not all the best ideas for new businesses were based on smartphones or mobile devices.

There are more ways to make money than by building a product that immediately hands 30 percent to Apple or Google. Here are the best startup ideas or models from 2011.

Make it a platform

As Facebook and Salesforce.com have shown, a tech company's proprietary data can be valuable as a substrate to other businesses. Build a tool that other people can build upon and then collect the rent when they do.

The best examples of this that come to mind: Box and Spotify. Box is a cloud storage provider. It's in a boring space that's becoming commoditized. The solution to staying in front? Make it possible for developers to build apps that leverage the data that Box's enterprise customers are paying to store. That's likely the only way to fend off the competing cloud storage providers.

Spotify, for its part, has a valuable but not unique music-streaming service. People are paying for it. But will they continue to do so? By allowing other businesses to build apps that run on top of the Spotify library--basically, music discovery and recommendation apps--Spotify is able to leverage its licensing deals and give other music brands (like Rolling Stone and We Are Hunted) a great way to offer new services to their fans.



Come to think of it, this is one of the reasons mobile is so big: App stores are platforms where developers can make money on top of large bases of users and communication networks.

Jobs near you, on Zaarly. (Credit: Screenshot by CNET)

Get consumers to sell stuff to one other, 2.0

eBay and Craigslist replaced the garage sale and the classified ad, but commerce moves on, and newer ideas are making these models seem old-fashioned. Services like TaskRabbit, Zaarly, and Coffee and Power are opening up a new economy where consumers can do direct deals with each other, with the benefit of more up-to-date community features. In most cases, the key is the social network connection, so you know with whom you are dealing.

Related to this is the emergence of specialized services for sharing the stuff you own: your house (AirBnB), your office (Loosecubes), and your car (Wheelz, RelayRides, and GetAround).

Build a studio

It's hard to come up with a viable product, but some smart startups don't try. Instead, they are building new studio systems to help other inventors raise the funds to build their dream products--and then give them built-in marketplaces to sell them.

KickStarter and Quirky both encourage nascent inventors (and artists, in KickStarter's case) to pitch their ideas to their audiences. People who like ideas pony up either a cash pledge or some of their limited votes. Good ideas and projects bubble up, in theory. More importantly, people who might not otherwise be exposed to very early-stage projects get to participate in the development and, in doing so, can become ambassadors to new ideas.

Crunch down big data

The Internet is awash in information and data, but few companies, other than Web giants themselves (Google, Facebook, Amazon), make real use of it. But finally, services are emerging that give other businesses, and even consumers, access to this data and the analytics to use it.

For example, in the retail arena, Decide.com analyzes prices of consumer technology products, and predicts if prices on particular items are going to go down, up, or hold steady. It's a valuable tool for consumers. On the smaller retail front, BlackLocus scours data sources (like competing retail sites) for tech prices. It can be programmed to adjust a store's own prices to make sure they are always competitive.

Touch the real world

Nearly every new mobile startup, it seems, is now location-aware. But consumer tech is getting eyes and ears as well, and it's making for very interesting new businesses. The startup IntoNow (sold to Yahoo) is a mobile app that listens for TV shows airing in the same room. Consumers use it to get additional data about the show they're watching; marketers get much richer data about who's watching what, where, and when.

A new take on an old appliance, the Nest thermostat.(Credit: Nest)

Other sensor technologies are showing up in wearable devices: The Jawbone UP bracelet monitors activity and sleep. And Basis is building a watch that measure skin temperature, sweat level, heart rate, and even blood oxygen level.

Invest in design

The best idea in startups to come in 2011: simplification and beautiful design. Consumers, it turns out, appreciate strong design and clear user interaction. We're seeing new apps and products now that take technology and strive for simplicity,  rather then trying to show off how technological they are.

The best examples of these are two hardware products, the Nest thermostat and the minimal Roku LT streaming media box. On the mobile front, new apps like Path 2 and Oink are distilled into spare and engaging mobile experiences, instead of going overboard with features and slowing down the on-the-go user.


Rafe Needleman

Rafe reviews mobile apps and products for fun, and picks startups apart when he gets bored. He has evaluated thousands of new companies, most of which have since gone out of business. Feeling lucky? Send pitches to rafe@cnet.com. And watch Rafe's tech issues podcast, Reporters' Roundtable, every Friday.

 Newscribe : get free news in real time

 -------------------------------------------------------------------------------------------------

Best New Startups of 2011

Source: User uploaded image

The best new startups of 2011 combine an innovative idea with a motivated group of people to create new products or service or improve on products and services we already use and adore. Each of these companies are in their infancy right now but have made a big splash on the world already. Using their creativity, innovations, hard work, and of course some venture capital funding, these startups are primed to take the world by storm to change how we work, play, communicate and perform so many other everyday activities.

It's hard to believe a world without the likes of Facebook, Twitter, Groupon, LinkedIn and Instagram but once upon a time, all of these tech startups were once the new kids on the block. Their creators saw an opening for their individual products and services then took it upon themselves to fill that void. Their ideas were both well executed and well embraced by the world and became nearly instant successes. They weren't the first to create something new and certainly won't be the last, but their innovation changed the world as we know it.

The masterminds behind the best startups from 2011 hope to see that same success as they introduce new ways for people to enjoy music with their friends, like with Turntable.fm, learn coding, like at Codeacademy, or find local people and businesses to fill certain needs, do mundane tasks or sell specific items, like at Zaarly.

Other startups take things we have now and make them so much better, cheaper or more accessible. Kogeto Dot, for example, is an invention that enhances an iPhone camera. Oink, created by the founders of Digg, allows people to rate and share things they love best with others.

The best new startups of 2011 may not be names you know right now, but just like the newcomers of the past, they made an impact during the year and very well could be on their way to becoming a household name in the years to come. Did a new startup rock your socks in 2011? Add it below and tell us why it should be the best of 2011!

Source: http://www.ranker.com/list/best-new-startups-of-2011/ready-to-startup

1. 

   Turntable.fm

   added by: Ready To Startup

2. Pinterest

     added by: Ready To Startup
   

3. BetterWorks

    added by: AdamThomas
   

4. Black Swan Solar

   added by: AdamThomas
5. 

   Thisisnatural.com 

Natural & Organic Products

Simon Agius & Jean Paul Stivala

United Kingdom

added by: ThisisNatural

“ By being the Marketplace for Certified Natural, we have a core mission to ensure all natural products on the marketplace can be compared based on sustainability, traceability, fair trade and health value. Shop our huge selection of natural vitamin, nutrition, natural beauty, cosmetics, organic and more online. Find a wide range of certified natural and organic products. Choose from a wide variety of herbal products, organic, natural & wholefood ingredients including body & hair care, antiaging and organic baby products. „

Related articles

• 10 Startup Trends That Will Be Huge In 2012 (businessinsider.com)
• Top10′s Spotify app shows the potential of social music (thenextweb.com)
• Spotify Rallies Workers With Help From Rypple (blogs.wsj.com)
• Small Business Snapshot: Franchise Owners Panic Over Payroll Tax Fight (openforum.com)
• 3 New Digital Takes On Staying Fit, Secure and Social (mashable.com)

2011 was year for the protester

Tweet

This image released by Time Magazine shows the Person of the Year issue featuring "The Protester." The magazine on Wednesday, Dec. 14, 2011 cited dissent across the Middle East that has spread to Europe and the United States, and says these protesters are reshaping global politics. (AP Photo/Time Magazine) >>

Year that was for the protester

The silly season is already on us and no doubt will be a fractious and prolonged one going into 2012. 

 MUSINGS By MARINA MAHATHIR

IT’S the end of the year and, like everyone else, I’m going to try and summarise what made it an interesting year indeed.

Time magazine named The Protester as its Person of the Year in 2011.

I couldn’t agree more, because really few people have made an impact on society than protesters this year.

From the protesters in Tunisia, Egypt, Bahrain, Libya and Syria to the Occupy Wall Street protesters and its many offshoots, these largely peaceful protests have forced things to change in their societies.

In the Middle East, corrupt and authoritarian leaders have been forced to step down. In some, it’s still an ongoing battle.

Of course, these steps towards democracy are not perfect. Nor are the results. But that’s democracy for you.



Just because people don’t know what they want is no reason to dismiss democracy.

It is the fact that they finally have choices is the triumph, after so many years of not having any.

For those who insist on equating the London riots with the Arab Spring, do get your facts right.

The former was not about changing an authoritarian government for a more democratic one, nor was it meant to be peaceful.

The latter was a peaceful demand for change; the violence came from the government response.

If you want to equate the London riots with the Syrian government’s response, perhaps it would be more accurate.

Time magazine has mostly recognised the Arab, Spanish and American protesters in their essay.

But perhaps they should have also looked eastwards.

I think the Bersih rally goers, protesting peacefully for clean and fair elections, are also deserving of the award.

For the first time, ordinary Malaysians went out to demand what should be their right, to be able to vote fairly.

Young and old of all races and religions, Malaysians marched to protect this basic human right. And were demonised because of it.

While the Government responded to the Bersih demands by establishing the Parliamentary Special Committee on electoral reforms, at the same time the so-called Peaceful Assembly Act – aimed at curbing any other rallies like Bersih – was passed.

In any case, it is delusional to think that curbing protests will curb rebellious thoughts. These will continue to thrive in 2012, that’s for sure.

Perhaps 2011 was also the year of the Strong Woman.

On the international scene, not one but three women won the Nobel Peace Prize this year: President Ellen Johnson Sirleaf of Liberia, Leymah Gbowee, also of Liberia, and Tawakkol Karman of Yemen, the youngest-ever recipient.

It’s interesting that all of these women are rebellious women, who refused to accept the established, and patriarchal, way of doing things.

Instead, they found their own way, and worked for peace in their countries.

Malaysia, too, has its share of strong women. Datuk Ambiga Sreenevasan is the prime example of someone who has had to withstand personal attacks from all quarters like no other person has had to in our country, yet still carries on with her strong principles.

Let it never be said that she lacks courage.

For women to get ahead, it really is imperative that they have the sort of integrity and display the sort of ethical behaviour that we often find lacking in men.

This year is, of course, also the year of the Obedient Wives Club, hardly a great leap forward for womankind.

Nevertheless, the OWC knew exactly how to get publicity for their causes.

And, I suspect, despite the sniggers over their sex manual, there are many who actually agree with their basic premise, that a good wife is one who blindly obeys her husband even when she doesn’t feel like it.

Finally, this year has been a bad year for justice and equality.

Children born less than six months after their parents married are considered illegitimate, thus forcing them to bear the sins of their parents.

Even if legitimate, children can be married off at even 10 years old, surely a blight on our society if we are to consider ourselves progressive.

Muslim women still don’t have the same rights as their non-Muslim sisters when it comes to marriage, property and inheritance.

And people of different sexual orientations are not regarded as full citizens.

I’d like to be optimistic about 2012 but that does not look likely.

The silly season is already on us and no doubt will be a fractious and prolonged one.

Merry Christmas and Happy New Year, folks!

The Exchange Rate Delusion of US Trade Deficit !

Tweet

Michael Spence: The Exchange-Rate Delusion

A 100 yuan banknote (R) is placed next to a US$100 banknote. -- PHOTO : REUTERS >>

If one looks at the trade patterns of the global economy's two biggest players, two facts leap out.

One is that, while the United States runs a trade deficit with almost everyone, including Canada, Mexico, China, Germany, France, Japan, South Korea, and Taiwan, not to mention the oil-exporting countries, the largest deficit is with China.

If trade data were re-calculated to reflect the country of origin of various components of value-added, the general picture would not change, but the relative magnitudes would: higher US deficits with Germany, South Korea, Taiwan, and Japan, and a dramatically lower deficit with China.

The second fact is that Japan, South Korea, and Taiwan - all relatively high-income economies - have a large trade surplus with China. Germany has relatively balanced trade with China, even recording a modest bilateral surplus in the post-crisis period.

The US has a persistent overall trade deficit that fluctuates in the range of 3-6 per cent of GDP. But, while the total reflects bilateral deficits with just about everyone, the US Congress is obsessed with China, and appears convinced that the primary cause of the problem lies in Chinese manipulation of the renminbi's exchange rate.

One problem with this view is that it cannot account for the stark differences between the US and Japan, Germany, and South Korea. Moreover, the real (inflation-adjusted) value of the renminbi is now rising quickly, owing to inflation differentials and Chinese wage growth, particularly in the country's export sectors. That will shift the Chinese economy's structure and trade patterns quite dramatically over time.

The final-assembly links of global-value added chains will leave China for countries at earlier stages of economic development, such as Bangladesh, where incomes are lower (though without producing much change in the balance with the US).

A somewhat more sensible concern might be that the dollar's reserve-currency status causes it to be 'over-valued' with respect to every currency, not just the renminbi. That could create additional pressure on the tradable part of the US economy, and thus might help to explain why the US tradable sector has not generated net employment for two decades.



But, in order to explain performance relative to Japan and Germany, one would have to argue that the euro and the yen have been undervalued, which makes no sense.

In fact, the employment generated by the tradable sector has been in services at the upper end of the distributions of value-added per person, education, and income. As a result, growth and employment in the tradable sector have gone separate ways, with healthy growth and stagnant employment. In Germany, by contrast, the tradable sector is an employment engine. The same is true of Japan.

The US economy's distinctive features for at least a decade prior to the crisis that began in 2008 were an unsustainably high level of consumption, owing to an illusory wealth effect, under-investment (including in the public sector), and savings that fell short of the investment deficiency. That excess household and government consumption fueled the domestic economy - and much of the global economy as well.

In several European countries that now confront fiscal and growth challenges, the pattern was somewhat different: most of the excess consumption and employment was on the government side. But the effect was similar: an unsustainable pattern of income and employment generation, and lower productivity and competitiveness in these economies' tradable sectors, leading to trade deficits, stunted GDP, and weak job creation.

One could argue that the euro has been and still is overvalued, and that this has hindered many eurozone economies' productivity relative to non-eurozone countries. But the relative productivity deficiencies within the eurozone are more important for growth, and have nothing to do with the exchange rate.

 Excessive Focus on currencies

The focus on currencies as a cause of the West's economic woes, while not entirely misplaced, has been excessive. Developing countries have learned over time that real income growth and employment expansion are driven by productivity gains, not exchange-rate movements. This, in turn, requires public and private investment in tangible assets, physical and telecommunications infrastructure, human capital and skills, and the knowledge and technology base of the economy.

Of course, it is possible for a country's terms of trade to get out of line with income and productivity levels, requiring a rebalancing. But resetting the terms of trade is no substitute for tackling the structural underpinnings of productivity.

None of this is peculiar to developing countries. Underinvestment has long-term costs and consequences everywhere. Excess consumption merely hides these costs temporarily.

In the US, productivity deficiencies have led to a pattern of disconnection from global supply chains. So the challenge for America is not only to restore productivity, but also to restore its links to the main currents of world trade.

China's growth - and, more generally, that of the major emerging economies - provides a substantial potential tailwind. That is certainly true nowadays for Germany, Japan, and South Korea. The US and others can take advantage of it as well, but only if productivity relative to income levels in specific areas of potential competitiveness begin to rise.

As long as America economic policy remains focused primarily on deficits, domestic demand, exchange rates, and backsliding on trade openness, its investment deficiencies will remain unaddressed. That means that its employment and income-distribution problems will remain unaddressed as well.

The good news is that, at a deep level, incentives across advanced and developing countries are aligned. The emerging economies would like nothing more than the restoration of sustainable patterns of growth in the advanced economies, and are prepared to be cooperative players in that process. But focusing on these countries' exchange rates is not the right way to go about it.

Michael Spence, a Nobel laureate in economics, is Professor of Economics at New York University's Stern School of Business, Distinguished Visiting Fellow at the Council on Foreign Relations, and Senior Fellow at the Hoover Institution, Stanford University. His latest book is The Next Convergence - The Future of Economic Growth in a Multispeed World (www.thenextconvergence.com).

Can Kim Jong-un be North Korea's Deng Xiaoping?

Tweet

By Isabel Hilton guardian.co.uk,

The death of Kim Jong-il recalls Mao's. But China, unlike paranoid North Korea, opted for the path of reform 

A North Korean child is overcome by grief at the death of Kim Jong-il. Photograph: AP

There is little room for nuance in our view of North Korea. State television parades sobbing citizens and soldiers apparently convulsed with grief at the loss of Kim Jong-il. Western commentators dismiss these scenes as propaganda.

Much of this display is certainly ritual, enacted for the camera and for watching comrades and informers. To fail to grieve for the loss of the "dear leader" is a poor career move. But for some the emotions may be real enough: the regime has cultivated in the people an intense gratitude to the Kim family, from the hero-founder Kim Il-sung, whose centenary will be celebrated next year, to his grandson, Kim Jong-un.

Kim Il-sung died in 1994, a time of terrible famine when there was little to be grateful for in North Korea. But refugees interviewed by the American journalist Barbara Demick – men and women who escaped to the south – reported their own intense feelings of bereavement for a leader whom they had been taught to revere as the embodiment of North Korean resistance, nationalism and independence.



Viewed from Beijing, these displays are easier to read: the death of Mao Zedong, whose tyrannical gifts were more than equal to those of the Kim dynasty, sparked similar scenes in China. Like the North Koreans, Chinese had lived under a regime of intense ideological control with limited information about the outside world, and were taught to regard their leader as the embodiment of national resistance to foreign aggression. Mao has never been dethroned as the regime's founding father, but as Beijing struggles to maintain its own internal stability, the question it asks of its troublesome neighbour is: will North Korea follow the Chinese path to reform?

In China Deng Xiaoping was waiting in the wings, a military and political veteran who triumphed over Mao by outliving him and doggedly undoing his legacy. North Koreans, instead, are expected to transfer their affections to a chubby 28 year-old who was catapulted to four-star general status in September last year. The customary chestful of medals will doubtless follow.

Kim Jong-il was nobody's political naif, so we must assume that he judged his third son the best available choice. The fact remains that, beyond the cachet of his DNA, Kim Jong-un has no military or political heft. Whether he has any interest in reform is impossible to gauge; whether it would matter if he did seems unlikely – he will depend on the support of military and the party for his power, and any change of course would have to begin there.

Planning for this transition has been under way since Kim Jong-il's stroke in 2008 with Beijing taking a close interest. China has muted its irritation at North Korea's repeated provocations and stepped up economic and trade relations as a buffer against any derailment of the succession planning. For now, Beijing hopes it will go smoothly enough to avoid any disturbance in China's three north-eastern border provinces.

The Chinese army has well-honed contingency plans to intervene in North Korea in the event of a breakdown, but hopes never to be forced to enact them, standing instead as Pyongyang's guarantor of investment, and of food and energy supplies. Beijing has no desire to cope with a flood of refugees across its nearly 900 miles of border, or to risk the intervention from US-backed South Korea that a collapse in the north could provoke.

The Chinese press has increasingly questioned what China gets out of the relationship with North Korea. For now, though, China has little choice but to pay the bills, while nudging the regime towards the kind of transformational reforms that Deng Xiaoping launched after the death of Mao.

A leadership change offers the regime an opportunity to shape a new narrative, and China's experience till now shows that economic reform need not threaten authoritarian power. To date, though, Pyongyang has shown only limited enthusiasm for the Chinese model. Without more radical reform, the already enormous economic gap between North Korea and its neighbours will only grow, and keep the country isolated and paranoid.

North Korean dependency on China is already stark: China provides 90% of the investment and accounts for 80% of North Korea's trade. China is building power plants, roads and transport infrastructure, Chinese businesses have invested in factories in North Korea's economic development zones, and exports of iron ore and coal to China from North Korea are important earners.

For both Beijing and Pyongyang, this dependency is a mixed blessing. South Korea, Japan and the US may be the bogeymen invoked to frighten North Korean children, but North Korea is also wary of becoming an economic colony of its giant neighbour. North Korea's main international weapon is blackmail: waving its nuclear capability in the face of the US and threatening China with instability. It works, after a fashion, but it is not a recipe for early reform.

Newscribe : get free news in real time