Make the right money moves: investing in a property is still best

THE Christmas and New Year celebrations offer us good reasons to indulge in extra spending — shopping for presents, overseas trips, parties and rewarding ourselves more lavishly than usual.

But now that the fireworks are over, what’s next?

The talk of the town these days is that the coming 13th general election have to be called before April 2013. We will know whether the ruling coalition will govern this country for yet another term. To endear themselves to the voters, the opposing coalitions are dishing out promises of reform and concession, but are we aware how these overtures, if implemented, will affect our pockets?

Reform and spending power

Well, any reform that will increase the spending power of the people is welcome. We are anxiously waiting for reforms that will lessen our tax burdens, abolish road tolls, increase subsidies on essential goods (particularly petrol), lower the prices of cars and provide free education opportunities for all.

However, these reforms are not made available to us — yet. Instead, the looming prediction that Parliament may be dissolved appears to have caused the general public to display a sense of anxiety and unwillingness to make financial commitments in property until the coming general election is over and the government of the day has assumed office.

With or without these perks, most of us still make financial resolutions with every intention of fulfilling them. But as the months pass, it is common for us to lose sight of our goals.

Conventional standards often call for a progressive career, comfortable home in a good neighbourhood, respectable ride, savings for children’s education and retirement. Sounds simple and achievable, but we know from experience that distractions creep in to dwarf our hard-earned savings aimed for these plans.

It boils down to our priorities and preferences. If you have X amount of cash, what would you do with it?

Invest wisely

The prudent approach is to invest your hard-earned money in avenues that yield long-term returns. Early gratification like rewarding ourselves with a fancy vehicle (I refer to vehicles beyond our means) before securing our first property may not be a great idea, as that would be funding a depreciating asset.

I know a young professional who owns a Ferrari but lives in a rented a house. I can’t blame him as I did the same! Although, mine was not such a luxurious ride.

Buying a property may seem like a heavy commitment now with half-a-lifetime’s worth of mortgage repayments, especially if you are young and uncertain of your future plans.

Renting appears to promise freedom of one’s cash, but in the long term, you would be glad to have tightened your belt as property values could rake in lucrative returns over the years.

As an example, I refer to a family friend, Ting, the retired general manager of an elite country club. In his younger days, the accountant reckoned that it would be more feasible to rent a house rather than buying one.

In a way, he was right in that the rent was much lower than the mortgage payments. That was in the late 1980s.

However, the world economy rose in the early 1990s, followed by a global stock market super-bull run, and local property prices have since been soaring without pause. The value of a RM200,000 link house rocketed to over RM300,000 within a few years during that period.

On seeing the phenomenon, he hastily bought his first property, a double-storey link house in an exclusive country club resort for RM400,000. That house is currently valued at about RM1.2 million.

He has since paid off his mortgage and does not have to worry about paying thousands of ringgit in rent every month.

Had Ting held off on buying that piece of property, he would have been paying monthly rent of RM3,000 till today, and thereafter, mortgage payments of easily RM5,000 every month. His timely decision saved him from all of that.

Understandably, young adults who have just entered the work force may face difficulty doing the same and some may require parental assistance. If that is not an option, it would help to have a thorough savings plan drawn up.

It is our culture in Asia for working adults to continue living with the parents as this alleviates us of the burden of paying mortgage payments or rent every month, allows us to enjoy laundry services and home-cooked meals. With such comfort, it’s easy to be unmotivated and complacent.

For young adults, the chance to buy a house or condominium unit is fast slipping away, what with the doubling of prices in the last several years. Friends and clients who are property developers say prices in the city centre, have risen from RM800 per sq ft in 2004, and to RM1,600 in 2012.

Rising property prices

Property prices rise with demand, especially demand from foreign investors, some of who have set up home in the city centre, what with the successful implementation of the Malaysia, My Second Home Programme (MM2H).

Therefore, the past few years have seen developers change their strategy in a bid to attract foreign investors.

Recently, we often hear the marketing for “bungalows in the sky”, lavish units exceeding the more conventional 1,500sq ft to 2,000sq ft. Some of these luxurious condominiums are larger than 3,000sq ft. Clearly, these products are not catering to the young working class.

These days, a double-storey link house in any prime location is selling at above RM1mil and a 1,200sq ft apartment is going for approximately RM700,000.

Pretty soon, such properties will be unatainable for the younger generation.

Furthermore, there’s Bank Negara’s credit tightening measures such as the 70% loan cap on the margin of financing for a third property purchase and other stringent lending criteria for consumer banks to follow.

Owning property isn’t going to get any easier as the years pass.

A fair perspective of the potential capital appreciation can be gained via a comparison between the KL and Singapore city centres.

A 1,500sq ft apartment in prime areas in Singapore is priced around S$4mil (RM10mil), whereas a similar unit in the Golden Triangle costs some RM2.5mil to RM3mil.

If we were to use worldwide trends in property price appreciation as a guide, we would see property prices in Kuala Lumpur have room to rise.

With relatively low property prices in the city centre, and rental yields at 6.21% (which is among the highest in the region; with Singapore at 2.94% and Hong Kong at 3.23%), investing poses an excellent proposition.

I read recently that in Hong Kong the unit rate (per square meter) for an apartment costs US$19,323 (RM59,000), while Singapore follows closely at US$16,727.

Fortunately for us, Kuala Lumpur lags, at US$2,182 in spite of our relatively high standards of living.

Consider this — the sub-prime financial crisis and the subsequent financial turmoil in the European Union did not have any negative impact on prices in our property market and the recent The Star Property Fair 2012 attracted throngs of buyers and investors. To me, this shows the high demand for property in Malaysia.

In my opinion, local property prices will not be determined by the results of the general election. Whichever coalition wins, property prices will continue to rise. So, it is up to you to make the right money moves in 2013 and make your dreams come true.

May God bless you and your loved ones with love, peace, joy and excellent health!

Mind Your Money
By CHERMAINE POO

Chermaine Poo, a chartered accountant by profession, was trained in corporate finance. A former beauty queen, she has since gained popularity as an actress, TV host, commercial talent and emcee. If you have any questions on money matters, send her an email at info@chermainepoo.com or follow her on www.chermainepoo.com, www.facebook.com/chermainepoo and www.twitter.com/chermainepoo.



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Is having a car still a symbol of freedom?

Is having a car still a symbol of freedom?

HAPPY 2113! Rest assured there is no typo error on the intended year of the greeting. I am wishing everyone a Happy 2113 at the beginning of 2013, to invite you to an adventurous ride to see the world 100 years ahead.

Imagine yourself embarking on a flying public vehicle that can carry you almost anywhere without the hassle of traffic jams. Late and missed appointments will be a thing of the past.

With an effective and efficient public transportation system in place, using your own vehicle other than for leisure or emergencies would seem unnecessary.

Imagine that the highways, car lanes and open car parks that once filled the landscapes are now replaced with parks, pedestrian friendly streets, public halls, malls, cafés and restaurants.

Travelling far to enjoy a good meal or watch a movie at the cinema becomes a distant past.

With ample time at hand, you can even catch up with colleagues, friends or family members at these easily accessible and beautiful sites or if you prefer, indulge in your favourite sports such as jogging, cycling, etc.

Now, that is creating true work-life balance.

This scenario sounds like a fantasy but it may become a reality in 2113, a hundred years from now. A hundred years ago, the sky was the limit.

Today, outer space is the limit. With the advancement of technology nowadays, there is no limit to our imagination.

However, we do not need to wait a hundred years to enjoy such a lifestyle. We can have a city with a hassle-free public transportation system if we start planning and building it now.

Efforts must be made before we can move towards a world-class city where the citizens can travel freely despite the growing population.

To achieve this, one of the areas that everyone can contribute is to reduce the usage of private vehicles which is currently the main mode of transportation in our country.

Every year, we have more than 600,000 new vehicles joining the traffic league.

Imagine what will happen to our traffic condition 100 years later if this number keeps increasing?

The strong demand for cars is understandable as cars have long been associated with the symbol of freedom and independence. This symbol is further hyped in many movies such as the James Bond series and associated with many famous celebrities including James Dean.

Today, we are still embracing a vehicle-centric culture. Given a choice to pick between a self-owned vehicle or a self-owned property, the vehicle always gets the thumbs up especially for the younger generation. The young ones plan for the wheels they ride in but give less attention to the homes they live in.

According to the 10th Malaysia Plan, our public transportation usage has only reached 12% in 2009. Our government aims to increase it to 30% by 2015. In other vibrant cities such as Hong Kong and Singapore, their public transportation modal shares are about 90% and 60% respectively. In terms of car ownership,

Malaysia has a ratio of 200 cars for every 1,000 people, compared with Hong Kong’s 59 cars per 1,000 residents, and Singapore’s 117 cars per 1,000 residents.

With the number of vehicles rising significantly in our country, there is little room left for a car to continue being a symbol of freedom as portrayed in James Dean’s movies. Where is the freedom in owning a car if it is common to have long queues on our roads and our car is caught in traffic congestion?

Even in America, where the population is traditionally obsessed with cars, the Frontier Group and US Public Interest Research Group found that, Americans between 16 and 34 years old have in fact drove 23% fewer miles in 2009 compared with 2001. Meanwhile, they increased bicycle riding by 24% and their mileage on public transport by 40%.

To effect these similar changes in our country, a comprehensive and efficient public transportation network must be provided. One of the notable efforts made is the the Mass Rapid Transit (MRT) project.

The Sungai Buloh-Kajang line which is expected to be completed in 2017, is purportedly able to serve a population of 1.2 million people and attract 400,000 passengers per day.

The announcement on the alignments of Line 2 and Line 3 next year is a good move to transform our transportation landscape.

As we wait for the completion of the MRT networks, other alternatives such as providing more feeder buses and taxis, or extending the current number of our LRT coaches should be considered.

The 2113 scenario with all its sophistication and engaging living environment is a lifestyle worth pursuing. Best of all, we do not need to wait 100 years to enjoy this lifestyle if the public transportation projects can be expedited. It is done in many great cities, why not our own cities?

Today’s infrastructure is built for decades to come, it is meant to support the demand and growth of our future generation. A comprehensive public transportation system will be the answer to the challenges posed by a world class and people-oriented city. And the true symbol of freedom is captured when you are able to speed on an MRT which bypasses the cars stucked in the traffic below. ·

 Food for thought  By DATUK ALAN TONG

FIABCI Asia-Pacific regional secretariat chairman Datuk Alan Tong has over 50 years of experience in property development. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.

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Remembering a plague fighter from Penang, Dr Wu Lien-Teh

A DELEGATION of 18 people from Penang will be heading to China to attend a commemorative symposium on legendary plague fighter Dr Wu Lien-Teh who was born in Penang.

Distinguished scientist: Dr Wu, aged 77, in a photo taken in Cambridge, England, in 1956

Led by Datuk Dr Lee Kah Choon, the delegates will comprise members from the state government, investPenang, Penang Global Tourism, Penang Medical College and the newly formed Dr Wu Lien-Teh Society of Penang.

The symposium will be held from Jan 18 to Jan 20 and it will be hosted by The First Hospital of Harbin Medical University in Heilongjiang, China, along with the third Boreal Congress of Cardiology.

The event will also see participants from various organisations, medical professionals, private individuals and also members of the Old Frees’ Association.

Medical reformer: Dr Wu (fourth left, front row) working with the Russians during an epidemic in 1921

 

“The conference will focus on Dr Wu’s great sacrifices as well as his principles and philosophies that have survived until the present day,’’ said Dr Wu Lien-Teh Society of Penang president Datuk Dr Anwar Fazal.

He said they would also promote the state in multiple ways during the visit including tourism, medical health and educational opportunities.

“We will also propose Penang as the next venue for the Dr Wu Lien-Teh and Global Health Symposium in 2014,’’ he added.

Born on March 10, 1879, Dr Wu was one of the few recipients of the prestigious Queen Victoria’s scholarship in Malaya at Emmanuel College.

Among his awards were the Cheadle gold medal for clinical medicine and the Kerslake scholarship in pathology.

After furthering his studies at the School of Tropical Medicine in Germany and the Pasteur Institute in France, he returned to Malaya in 1903 to take up a post at the new Institute of Medical Research in Kuala Lumpur.

Dr Wu was very outspoken in his opposition to gambling and opium trade back then and served as the president of the Penang Anti-Opium Association.

His academic achievements and reputation caught the eye of Yuan Shih-kai of the Chinese Government in Beijing who offered him a post as the deputy director of the Imperial Army Medical College in Tientsin in 1907.

Dr Wu received recognition as a plague fighter who saved thousands of lives in north-east China in the early 1910s after an outbreak.

His new scientific approach prevented the killer disease from spreading.

In 1937, his villa in Shanghai, China, was bombed by the Japanese.

He then moved to Ipoh to resume his medical work.

Dr Wu was the first ethnic Chinese nominated for the Nobel Prize in Medicine in 1935.

He died aged 81 after a stroke on Jan 21, 1960.

His death came barely a week after he moved into his new house in Penang for his retirement.

Until today, Dr Wu’s accomplishment is still recognised at the Penang Free School which named one of its school houses after him, bearing the green colour.

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Dispute with China takes toll on Japan

The last time a dispute between Japanand China blew up in 2010 over eight uninhabited islands, the economic fallout lasted less than a month. This time, the spat is prolonging a recession in the world’s third-largest economy.

Chinese activists carrying Chinese and Taiwanese national flags walk on Diaoyu Islands

Four months after Chinese consumers staged a boycott of Japanese products over the islands in the East China Sea, sales of Japanese autos in China have yet to recover, Chinese factories began to favor South Korean component suppliers, and the U.S. has displaced China as Japan’s largest export market.

“The spats have become increasingly costly as Japan’s dependence on China as an export market has risen,” said Tony Nash, a Singapore-based managing director at IHS Inc., which provides research and analytics for industries including financial companies. “Nationalism around the issue has resulted in lower demand for Japanese products in China and even Chinese firms sourcing products from Korean suppliers.”

As China’s confidence in asserting its territorial claims has grown, and trade between the two nations has tripled since 2000 to more than $300 billion, the commercial cost of failing to resolve the dispute keeps rising. The latest flare-up came after property developer Kunioki Kurihara sold three of the islands to the Japanese government for 2.05 billion yen ($23 million) in September, a transaction Xi Jinping, the new head of the Chinese Communist Party, called “a farce.”

Growth Cut

The fallout from the sale may have cut Japan’s growth in the latest quarter by about one percentage point, JPMorgan Chase & Co. estimated. That would be enough to keep the economy in recession after two quarters of contraction up to Sept. 30. Gross domestic product may have shrunk an annualized 0.5 percent in the final three months of 2012, according to the median forecast in a Bloomberg News survey.

The standoff over the islands known as Senkaku in Japan and Diaoyu in China contributed to declines in Japan’s shipments to China for six months through November. Japan’s industrial output fell 1.7 percent in November, to the lowest level since the aftermath of the 2011 earthquake.

With each round of political disputes, the economic effect has grown. When then-Japanese Prime Minister Junichiro Koizumi visited a Tokyo shrine where war criminals are among those honored in 2005, Chinese people and politicians protested. Yet trade between the two rose more than 12 percent that year.

Things got worse in 2010, when a Chinese fishing boat and a Japanese Coast Guard vessel collided in contested waters. China stopped granting export licenses to Japan for rare earth metals, necessary for automobile and electronics industries. The licenses were resumed about a week later after Japan released the detained captain of the vessel.

Biggest Effect

This year’s row has had the biggest effect so far, said Professor June Teufel Dreyer, a specialist in Chinese politics at the University of Miami in Florida. After the Japanese government bought the three islands, angry Chinese boycotted Japanese products and smashed Japanese shops in China.

“This has really changed things, unquestionably; it is not a blip,” said Dreyer. “China will continue to push its claims to sovereignty until Beijing gets what it wants.”

The islands offer the prospect of rich fishing grounds, potential oil reserves and a strategic military outpost in the sea between China, Japan and Taiwan. That’s overshadowed economic ties that Jesper Koll, head of equity research at JPMorgan in Tokyo, called “a match made in heaven.”

“Japan has intellectual property, brands and capital, while China has people, markets and purchasing power,” said Koll, in an interview.

Ishihara’s Offer

The latest spat began in April when then-Tokyo Governor Shintaro Ishihara said he planned to use public money to purchase Kurihara’s islands. Ishihara, 80, is a longstanding critic of China, so the national government stepped in to buy the islands instead, in a failed attempt to defuse Chinese anger.

China’s official Xinhua news agency on Dec. 2 criticized the U.S. Senate’s approval of an amendment to show the islands fall under a U.S.-Japan defense treaty, calling it a “disturbing message” to the world that the Senate is seeking an escalation of tensions between China and Japan.

“The row has changed the landscape of China-Japan relations,” said Taylor Fravel, a professor at Massachusetts Institute of Technology who specializes in Chinese politics. “As a territory dispute, it’s prone to spirals of escalation.”

Election Win

The election victory of Shinzo Abe’s Liberal Democratic Party, which returned to power in a landslide victory in December, has further stoked the conflict. In its manifesto, the LDP proposed strengthening the nation’s military and said it would consider stationing officials on the islands, prompting an editorial in the China Daily newspaper on Nov. 26 that described the manifesto as “dangerous.”

Two days before the election, China sent an 11-page report to the United Nations arguing that the geology of the continental shelf makes the islands a natural part of China.

Japan yesterday said the government summoned the Chinese ambassador to protest the presence of four surveillance ships near the islands. China responded that the ships were conducting normal duties around Chinese territory, Foreign Ministry spokesman Hong Lei said at a briefing in Beijing.

Japan’s Defense Ministry made a budget request Jan. 7 for extra PAC-3 missile interceptors and upgrades for F-15 fighter planes, and will seek to raise next fiscal year’s defense budget by about 120 billion yen, reversing the downward trend of the last decade.

Economies Lose

“As Japan’s politics turn decisively to the right, more and frequent spats between Japan and China are expected,” said Liu Li-Gang, chief economist for Greater China at Australia and New Zealand Banking Group Ltd. who used to work for the World Bank. “Both economies will lose in the end. Japan will lose a big market, and China will not be able to leverage on Japan’s technology and investment for growth.”

Japanese automakers’ share of the Chinese market slumped to 14 percent in November from about 23 percent before September, Xu Changming, a director at China’s State Information Center, said on Nov. 29. Toyota Motor Corp. (7203), Japan’s biggest carmaker, said in November that output in China fell the most in at least a decade, while Nissan Motor Co. (7201) reported the biggest output decline since at least 2009.

All Nippon Airways Co. (9202), Japan’s largest airline, had 46,000 seat cancellations on flights between September and November because of the dispute, spokesman Ryosei Nomura said. The carrier forecast the row will cut sales by about 10 billion yen.

Uniqlo Stores

Fearing attacks from anti-Japan protesters, Fast Retailing Co. (9983), seller of the Uniqlo casual wear brand, temporarily shut 60 of its 169 stores in China from Sept. 14-24, according to spokeswoman Yukie Sakaguchi.

“We closed stores in areas that could have been dangerous, such as near the Japanese embassy in Beijing,” she said.

Anti-Japan protesters attacked three department stores in Hunan province run by Heiwado Co. (8276), a supermarket operator based in Shiga prefecture, central Japan, forcing the company to close its stores there for more than a month and incur losses of around 500 million yen, according to spokesman Tomoharu Tsuda.
“They smashed windows, broke shutters and wrecked products in the stores,” Tsuda said. “This could well happen again.”

Oil Resources

While Japan has administrative control over the islands, they were largely ignored from the end of World War II until 1969, when a United Nations commission said the surrounding seabed may be “extremely rich” in oil. That brought sovereignty claims in the following years by China, Japan and Taiwan.

“As existing resources are exhausted, the importance of oil and gas resources in the South China Sea will increase and that’s one of the key reasons why this issue is not going away,” said Hao Hong, managing director of research at Bank of Communications Co., China’s fifth-largest lender by assets. China is “stronger than Japan militarily and economically.”

Underlying the border dispute is a history of strained diplomatic ties between the two countries dating back to the Japanese invasion of China in 1937 and atrocities carried out in the country by some Japanese troops.

With political capital to be gained by both sides from courting nationalist fervor -- Abe visited the same shrine as Koizumi in October -- lawmakers may manipulate the row to fit their agendas despite the economic costs, said Ding Xueliang, a professor at Hong Kong University of Science and Technology, who teaches contemporary Chinese politics.

Chinese Anger

“Japan is always a convenient target for the Chinese government to use to divert domestic anger,” Ding said. “Compared to the political values, the trade values with Japan are secondary.”

China would be willing to accept a 30 percent reduction in trade with Japan before it would back down, whereas Japan’s pain threshold is about 20 percent, Ding estimated.

One possible course follows the policy proposed by the late Chinese leader Deng Xiaoping, said Martin Schulz, a senior economist at Fujitsu Research Institute in Tokyo.

“China knows it will never get the islands, and Japan knows that China will never let go,” said Schulz, who has done research for the Bank of Japan. “Deng Xiaoping’s stance from the 1970s, to keep it quiet until joint economic cooperation in the area becomes possible, remains the only solution.”

U.S. Relations

As the current stand-off pushes Japan and China to reduce reliance on each other, U.S. relations with both sides could benefit, according to Liu at ANZ Bank.

“The U.S. will become more important to both China and Japan and will play a big balancing role between Japan and China,” Liu said. “Japan may increase its investment in Vietnam and other economies” in the Association of Southeast Asian Nations.

Exports from Japan to 10-member Asean grew nearly 50 percent in the decade through 2011, according to finance ministry data.

“Japanese investors will accelerate their strategy of diversifying investments to the rest of Asia,” said Tao Dong, head of Asia economics excluding Japan at Credit Suisse Group AG in Hong Kong. “We see increased cases of Japanese investment in Vietnam and the Philippines and there’s lots more to come.”

Acquisition Spending

Japanese companies have spent or plan to spend more than $10 billion since January 2011 on acquisitions in the Asean bloc, data compiled by Bloomberg show. In November, Kirin Holdings Co. bid $2.2 billion for Singapore-based Fraser & Neave Ltd.’s food and beverages unit.

China, which also has disagreements with Asean nations over islands in the South China Sea, was warned last month by Vietnam not to apply economic force to settle disputes.

“Japanese business influence in China will start to decline” as China invites more European and U.S. investment, ANZ’s Liu said in an interview in Tokyo. “Japanese firms’ space in China could be limited in the future.”

Still, the legacy of decades of investment in China make it unlikely that Japanese companies will withdraw, said Nash at IHS.

“This is not an either-or issue,” Nash wrote in an e- mail. “Firms will stay in China and they will invest in Southeast Asia and other places. It’s hard for Japanese exports to move totally away from China and it’s hard for Chinese OEMs to move totally away from Japanese components.”

Japanese companies such as Nissan employed 1.6 million people at subsidiaries in China in the fiscal year ended March 2011, according to the Japanese trade ministry.

As Richard Koo, chief economist at Nomura Research Institute Ltd., wrote in a Dec. 11 report: “No matter how unpardonable China’s behavior over the issue of Senkaku Islands may be, as a practical matter Japan needs to proceed carefully given the magnitude of its Japanese investments in the country.”

Bloomberg

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Japan compensated RM207 billion to Malaysia?

PETALING JAYA: Japan never paid RM207bil to the Malaysian Government as compensation for victims of the Death Railway project in the 1940s, according to the Japanese Embassy.

Its Second Secretary Takaharu Suegami, responding to PAS working committee member Datuk Seri Nizar Jamaluddin who was reported to have said so, said the latter's claim was “outside the involvement and knowledge of the Government of Japan”.

“All questions arising out of the unhappy events with regard to Malaysia have been fully and finally settled under the San Francisco Treaty which entered into force in 1952,” he said in a statement yesterday. Nizar was quoted by Harakah Daily as saying that the embassy had confirmed that the money was handed to the Malaysian Government in 2004.

The report stated that the money had yet to be distributed to families of the estimated 30,000 Malaysians who were forced labourers of the project between 1942 and 1946.

Suegami said both countries had also signed an agreement on Sept 21, 1967, whereby Japan agreed to supply services and products to Malaysia totalling RM25mil.

The grants, he said, had been used to build two ships, among other projects, but there was no transfer of an undisclosed amount of money.

“Malaysia agreed that any question from the events of the Second World War that might affect our good bilateral relations would be fully and finally settled with the agreement.

“All the supply in accordance with the agreement was completed by May 6, 1972,” he said.

- The Star/Asian News Network

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Britain ready for war over Falkland Islands

Prime Minister David Cameron said Sunday Britain was prepared to fight militarily to keep the Falkland Islands if necessary, in the face of renewed Argentinian rhetoric over their future.

Cameron said Britain had "strong defences" in place on the islands and fast jets and troops were stationed there -- comments Buenos Aires rejected as "militaristic threats."

President Cristina Kirchner said this week that Argentina was forcibly stripped of the Falklands by Britain in "a blatant exercise of 19th-century colonialism" and demanded they be handed over to Argentina.

Cameron insisted he was "absolutely clear" that Britain would defend the islands with military force.

In an interview on BBC TV, he said: "I get regular reports on this entire issue because I want to know that our defences are strong, our resolve is extremely strong."

Asked whether Britain would fight to keep the islands, he replied: "Of course we would, and we have strong defences in place on the Falkland Islands, that is absolutely key, that we have fast jets stationed there, we have troops stationed on the Falklands."

In Argentina, the foreign ministry issued a strong rebuttal following Cameron's comments.

It hit out at what it called "the aggressiveness of the British prime minister's words" and reiterated its demand that London honour a UN General Assembly resolution that invites the two sides to hold talks on the dispute.

Cameron said this week that the 3,000 residents of the Falklands had a strong desire to remain British and would have a chance to express their views in a referendum on their political status to be held in March.

The islanders are expected to vote strongly in favour of continued union with Britain.

Census data released in September showed that 95 percent of residents considered themselves to be either Falkland islanders, British, or from Saint Helena, another British overseas territory in the South Atlantic.

Argentina invaded the Falklands in 1982, prompting Britain's then prime minister Margaret Thatcher to send a naval taskforce to successfully reclaim the islands in a war that claimed the lives of 255 British and 649 Argentinian soldiers. - AFP

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MERITOCRACY is about more than just academic grades

MERITOCRACY in Singapore is about more than just academic grades, said Prime Minister Lee Hsien Loong as he stressed that everyone here has a shot at success.

“When we say ‘merit’, we are not just talking about grades or scores, but also character, leadership and a broad range of talents,” said Lee said in a speech to more than 1,500 students and their parents at a bursary and Edusave award ceremony in his Teck Ghee ward.

He said: “We make sure that whatever your family background, whatever your circumstances, you may be poor, you may be from a single-parent family, you may be having some learning disabilities, but if you work hard, you can succeed.

“It does not matter what your background is. We make sure we identify you, we give you the opportunities and also the resources and the support so that if you succeed, you can do well for Singapore.”

Yesterday was the second time in just over a month that PM Lee stressed that meritocracy cannot be narrowly defined as being just about grades. He also spoke on the topic at a PAP conference on Dec 2 last year.

In that speech, the Prime Minister said he was worried when Singaporeans reject meritocracy and asked what could replace merit as the basis for decisions on jobs or school places.

The principle has come under considerable scrutiny in recent months, especially in the field of education.

While the Prime Minister repeated the same call on broadening the definition of meritocracy, yesterday he focused on what roles parents and students can play in it.

He urged parents to set an example: “Guide your children, set good examples and instil good moral values in them.”

Turning to students, Lee urged them not to neglect their studies even though there would be more focus on character, leadership and service.

“Results and grades are not the only measure of success or the only things that matter in life,” Lee said, adding: “It is important that you learn and study to give you a good foundation for what you can do in life.”

He pledged that the Governm­ent will continue to help all students achieve their potential. — The Straits Times / Asia News Network