Sultan of Sulu, who is the true and legitimate?

Sultan Muhammad Fuad A. Kiram I (The last son of HM Sultan Esmail E. Kiram I - Sultan of Sulu 1947 to 1973) or Sultan Muedzul-Lail Tan Kiram (son of  Sultan Moh. Mahakuttah A. Kiram - 34th Sultan of Sulu 1974 - 1986)
 
Muedzul-Lail Tan Kiram 35th Sultan of Sulu Son of  Sultan Moh. Mahakuttah A. Kiram 34th Sultan of Sulu (1974 - 1986)

Sultan of Sulu - Sultan Jamalul Kiram II (1894-1936).

 

Sultan of Sulu, Al-marhum Sultan Moh. Jamalul Kiram II (1893-1936) was recognized worldwide. During his long reign he signed several treaties with different nations.  

 Sultan of Sulu, Al-marhum Sultan Moh. Jamalul Kiram II

Unfortunately he has no offspring of his own. He passed on his authority to his youngest brother Al-marhum Sultan Mawallil Wasit Kiram (1936).

Al-marhum Sultan Mawallil Wasit Kiram was Sultan Muedzul-Lail Tan Kiram's great grandfather and Al-marhum Sultan Moh. Jamalul Kiram II was his great grand uncle.

Sultan Muedzul-Lail Tan Kiram is the grandson of the 33rd Sultan of Sulu, Al-marhum Sultan Moh. Esmail E. Kiram I (1950-1973)

  

Al-marhum Sultan Moh. Esmail E. Kiram I has granted authority to Philippine government under the administration of President Diosdado Macapagal on 12th of September 1962 and of President Ferdinand Marcos in 1969.

Sultan Muedzul-Lail Tan Kiram's mother Dayang-Dayang Farida Tan-Kiram was the first wife of his father. Half tausug and half Chinese, she was commonly known as the Princess of Sulu.

His father's second wife is Dayang-Dayang Merriam Tanglao-Kiram, commonly known as the Princess of the South.
 

Al-marhum Sultan Moh. Mahakuttah A. Kiram, 34th Sultan of Sulu had seven children:

1. Dayang-Dayang Zuharra T.Kiram
2. Dayang-Dayang Dinwasa T. Kiram Delos Santos
3. Raja Muda Muedzul Lail Tan Kiram
4. Datu Yldon Tan Kiram
5. Dayang-Dayang Nur Mahal T. Kiram
6. Dayang-Dayang Ayesha T. Kiram
7. Dayang-Dayang Tanya Rowena T. Kiram -Tahil
 

Sultan Muedzul-Lail Tan Kiram is married with H.M. Dayang-Dayang Mellany S. Kiram. They have seven children.

1. Raja Muda Moh. Ehsn S. Kiram
2. Datu Nizamuddin S. Kiram
3. Dayang-Dayang Rahela S. Kiram
4. Datu Jihad S. Kiram
5. Datu Mujahid S. Kiram
6. Dayang-Dayang Redha S. Kiram
7. Datu Mahakuttah S. Kiram
 

Sultan Muedzul-Lail Tan Kiram studied Islam in Lahore, Pakistan (1995-1996). He got a Bachelor of Arts (BA) degree from AE College, Zamboanga. He also served the local community as a government official. At present he is involved as a civil society leader in the Province of Sulu which opposes the US-RP Balikatan Exercises of the Visiting Forces Agreement (VFA).
 

Sultan Muedzul-Lail Tan Kiram was born in Jolo. Jolo was once the capital of a maritime empire that traded with the great  Empire of China and with other kingdoms in Southeast Asia. 

As Raja Muda of Sulu, the Sultanate is Sultan Muedzul-Lail Tan Kiram birthright. There is a sacred bond between the Sultan and his people, the Rayaat, that is handed down from generation to generation between the royal family and trusted people who live in Sabah and in the Sulu Archipelago.

The Sulu Archipelago includes Palawan, Sabah, Zamboanga Peninsula, Basilan, Tawi-Tawi, the Sprately islands and the Balambagan group of islands.  Historically it was part of  Nusantara. According to oral history and traditions, Sulu has been independent and sovereign centuries before the birth of the Republic of Philippines. Sultan Muedzul-Lail Tan Kiram's ancestors contracted treaties with powerful nations and defended Sulu rights to freedom in traditional way of life against invaders.

But from the start of the Philippine Republic which lumped Sulu with the rest of the islands under the name Philippine Archipelago, Sulu has experienced devastation, death and downfall.

The Macaski Judgment over the Sabah issue in 1939 was a blow to the Sulu Sultanate. Sultan Muedzul-Lail Tan Kiram's grandfather, Sultan Moh. Esmail E. Kiram I was one of the recipients of that judgment. The Macaski settlement divided Sulu into divisions

Sabah became a private property and the heirs of the Sultan were divided among themselves. One group wanted Sabah for sale while another group wanted to take it back.

When Sultan Muedzul-Lail Tan Kiram's  grandfather, Sultan Moh. Esmail E. Kiram I, granted authority to the Philippine government through Pres. Diosdado Macapagal and Pres. Ferdinand Marcos, it was with the hope that the Philippine government would become a caretaker of the domain of the Sulu Sultanate to help the Muslims in this archipelago. This transfer of sovereign authority carried with these obligations and agreements.

As Sulu political power is declined, the unity of the Tausug people in the whole archipelago also has weakened. The economic life of the whole region was brought to the lowest level. Then came the Muslim rebellion and the civil war in 1974 that devastated the whole Sulu. Hundreds of thousands innocent people died.
 

In 1974 Sultan Muedzul-Lail Tan Kiram's  father was installed as the Sultan of Sulu. His father's twelve year reign started the slow but steady recovery of Sulu people. 

However after his death (February 16, 1986) there were several claimants made by pretenders (royals and non-royals) to the title of Sultan.

During the coronation process of Sultan Muedzul-Lail Tan Kiram as the 35th Sultan of Sulu

Sultan Muedzul-Lail Tan Kiram, 35th Sultan of Sulu, together with 
Mellany S. Kiram and Crown Prince Moh. Ehsn S. Kiram.

Sultan Muedzul-Lail Tan Kiram has waited  twenty-two years for the official recognition to succeed his father.

Source :  Royal Sultanate of Sulu Facebook
(Joined Facebook on 12th May 2011)

**********************************************************

Sultan Muhammad Fuad A. Kiram I 

The 35th Reigning Sultan of Sulu 

 The last son of HM Sultan Esmail E. Kiram I 

(Sultan of Sulu 1947 to 1973)

Sultan Muhammad Fuad A. Kiram I 

Indonesia Minister of Religious Affairs granted the rank and tittle of hereditary knighthood 

by Sultan Fuad A. Kiram I

(2nd December 2011)

Chancellor of Al Zaytun granted the rank and tittle of hereditary knighthood 

by Sultan Fuad A. Kiram I

(Al Zaytun is the biggest Islamic boarding school in Indonesia)

  ( 27th November 2011)

Source :  

The Royal Hashemite Sultanate of Sulu & Sabah Facebook
 (joined Facebook on 7th May 2011)

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Will the lessons be learnt from the financial crisis in Cyprus?

This time, it is Cyprus’ turn to face a bitter financial crisis as bank depositors get hit and capital controls are imposed. 

Demonstrators in Athens. The roots of the eurozone crisis lie in its unwillingness to uphold fiscal discipline. Photograph: Louisa Gouliamaki/AFP/Getty Images

THE financial crisis in Cyprus has again shown that over-dependence on the financial sector and an unregulated and liberalised financial system can cause havoc to an economy.

The particular manner in which a financial crisis manifests itself may be different from country to country, depending on the ways the country became financially over-reliant or over-liberalised, and also on how ever-changing external conditions affect the country.

For the past two weeks, Cyprus hit the headlines because of the rapid twists and turns of its crisis, the terms of the bailout it negotiated with its European and IMF creditors, the hit that bank depositors are forced to take, and finally the “capital controls” that the government has imposed to prevent bank runs and capital flight out of the country.

Depositors with more than 100,000 (RM396,000) could lose more than half their savings.

Bank customers can only withdraw 300 (RM1,189) daily; cashing of cheques is prohibited; transfers of funds to accounts held abroad or in other credit institutions are prohibited; transfers due to trade transactions above 5,000 (RM19,832) a day require central bank permission; the use of credit cards overseas is restricted to 5,000 (RM19,832) per account a month; and travellers can only take out 1,000 (RM3,960) or equivalent in foreign currency per trip.

These capital controls, announced on March 28, were highlighted in the media as the first to be imposed by a country belonging to the European Union.

It was like the slaying of a “sacred cow”, because the freedom to move funds out of and into the European countries had been treated almost like a human right.

But it is this total freedom for the flow of funds that has contributed or even been ultimately responsible for so many financial crises in so many countries in the past few decades.

This liberalised system of capital flows enables residents to place their funds abroad or to purchase foreign assets like bonds and shares.

It also enables foreigners to bring in funds either for short-term speculation and investment or longer-term investment and savings.

After the Second World War, capital controls were the rule: flows of funds to and from abroad were mainly restricted to activities linked to the real economy of trade, direct investments and travel.

From the mid-1970s, the liberalisation of capital flows took place in the rich economies and gradually spread to many developing countries.

The finance ministers of Brazil and of other developing countries have been protesting against the easy-money policies in rich countries that have had adverse effects on emerging economies.

When the internal or external situation changes and investor perception changes with it, the inflow of funds turns into its opposite.

The sudden outflow of funds, and depreciation of the currency, can then cause an even more devastating effect on the economy.

In the 1997-99 crisis, East Asian countries that had over-liberalised their financial system found that local banks and companies had borrowed heavily in US dollars.

When their currencies depreciated, many of the borrowers could not service their loans.

The countries’ foreign reserves dropped to danger levels, forcing them to go to the IMF for bailout loans.

Malaysia fortunately had some control over the amount local companies could borrow from abroad, which prevented it from falling into an external debt crisis.

The imposition of capital controls over outflows in September 1998 enabled Malaysia to avoid a financial crisis requiring an IMF bailout.

The immediate response from the IMF and the Western establishment was that the capital controls would destroy the Malaysian economy.

Today, the economic orthodoxy has changed, and most analysts including at the IMF give credit to Malaysia for the capital controls.

The Malaysian controls included a temporary ban on foreigners transferring their ringgit denominated funds (for example in the stock market) abroad, a limit to the funds local travellers could take out of the country, and limits to overseas investments by local companies and individuals.

Today, the IMF itself has changed its position, saying that capital controls in certain situations are not only legitimate but may also be necessary.

It has partially recognised that unregulated capital flows can cause financial instability and economic damage.

In the case of Cyprus, analysts now conclude that its growth model was flawed because it was too reliant on a bloated financial sector, having become a haven for foreign savers, especially from Russia.

But a major factor in its recent crisis was that the country’s biggest banks invested in Greek government bonds.

In October 2011, a bailout package was arranged for Greece by the European Union and the IMF.

Part of the bailout terms was that holders of Greek government bonds would take a “haircut” or loss of about 50%.

This Greek debt restructuring meant a loss of 4bil (RM15.9bil) for banks in Cyprus, a huge amount in a country whose GNP is only 18bil (RM71.4bil).

Now, it is Cyprus’ turn to be reconfigured and re-created as part of a 10bil (RM39.7bil) bailout scheme. The two biggest banks, Bank of Cyprus and Laiki Bank are to be drastically restructured, with the latter to be closed.

The biggest innovation designed by the European Union and IMF creditors is that the bank depositors will have to take losses. Deposits less than 100,000 (RM396,000) are to be spared, after an original plan to also “tax” them by 6.75% was cancelled after a huge outcry and the fear of contagion, with bank runs in many European countries.

The final plan is for deposits over 100,000 (RM396,000) in the two banks to take losses not by the originally planned 9.9% but by much more.

The new European policy of getting bank depositors to take a big hit in bailouts of banks will have big ramifications for public confidence in banks.

The new perception is that money put as savings in banks is no longer safe.

The question remains: will the policymakers learn the real lessons from these crises?

GLOBALTRENDS BY MARTIN KHOR 

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Why call US tech giant rotten Apple?

Play Video
 

Apple products have gained huge popularity in China over recent years. Iphones and ipads are the "must-have" accessory, particularly in urban areas while the company’s stores are often overflowing with customers trying out the latest gadgets.

But there’s now a scandal brewing over Apple’s warranty and repair policy, and concern that Chinese consumers are being given a rough ride.

In a recent interview, Apple CEO Tim Cook said China will soon become Apple’s biggest market.

For Apple, business must stay business

Apple Inc has been having a hard time in China since China Central Television (CCTV) revealed on March 15 that the technology giant allegedly applies a different service policy to Chinese consumers than in other countries and regions. A wave of onslaught has surged in Chinese State media in the past few days, with Chinese authorities ordering the company to change its policies or face punishment according to Chinese regulations.

However, many Chinese fans have shown their loyalty toward Apple, allying with some foreign media outlets in saying that this is a "well-coordinated" campaign led by the Chinese government to pinch the US company. It is also said that Apple is merely the victim of China's vengeance against the US government's treatment of Chinese telecom giants. China's Huawei and ZTE have long been restricted in the US markets under security and other accusations.

The drama began as a typical business incident, as CCTV did not only point its finger at Apple in its March 15 exposé. It is no good for either side that the issue is gradually turning political.

Generally speaking, CCTV's annual showcase program on World Consumer Rights Day has played a positive role in digging out business scandals. It is also the reason why the program has remained influential among Chinese viewers for a long time.

Had Apple been more sincere in its response to the criticism, the result could have been different. The statement Apple made right after the CCTV exposé was very different with that of other multinational companies who were also reported to have consumer rights issues. With the sheer weight of the company behind it, Apple's detached tone could easily be seen as proof of arrogance.

Apple has won respect from Chinese consumers with its perseverance in developing leading technologies and styles. But the company is not impeccable. Like its continuing stride in exploring for technological breakthroughs, the company also needs to keep working hard to raise its service quality.

Apple should not follow the media speculation and consider itself the target of political persecution. As for its fans in China, if they do love this brand, they should let the truth emerge instead of joining the speculations.

If the issue developed into a head-on confrontation between Apple and the Chinese authorities, the US company will never be a winner, nor will China necessarily do well. Of course, Apple will suffer the most, as its products are already facing increasing competition in China.

It will be wise for Apple not to entangle itself into political debates. For Apple, it is still a matter of business. - Global Times

Why call US tech giant rotten Apple?

State broadcaster Central China Television (CCTV) took the first bite. The People's Daily followed, and now others like Guangming Daily and The Global Times have joined the fray.

China's state media has been piling the pressure on Apple since the American tech giant was criticised during CCTV's annual show on March 15 to mark World Consumer Day.

This week alone, the People's Daily has run articles four days in a row to lash out at Apple for allegedly discriminating against its customers in China.

"Why is it that Apple is so incredibly brazen and arrogant in China when it doesn't dare to be so in the United States and other countries?" asked a commentator in the People's Daily, the mouthpiece of the Communist Party. It also likened Apple to a wolf pretending to be innocent.

Many observers are wondering about the real reasons behind the coordinated media attacks.

Could China be retaliating against the difficulties faced by its tech behemoth Huawei in the US? Or is it Apple's lack of advertisements in the state media?

"I wish I knew," Bill Bishop, a Beijing-based analyst and founder of The Sinocism China Newsletter, told The Straits Times.

There are some who say there is nothing more to it than Apple behaving badly.

"When it comes to China, a market with great potential, Apple has taken advantage of its fans' crazy enthusiasm by using incredulous sales tactics," wrote blogger Shu Shusi, a frequent commentator on consumer issues.

Not only are iPhones released later and sold at a higher price in China than elsewhere, their after- sales service is bad too, he added.

Apple might also have violated Chinese regulations, noted others. CCTV on Wednesday said consumers had complained that Apple offered only a one-year warranty for its MacBook Air in China, when the country's rules mandate a two-year warranty for the main laptop parts.

Then there is the sense that Apple needed to be taught a lesson for not being contrite enough.

"Errant companies" featured on CCTV's 315 Evening Gala, like Chinese net firm Netease, had been quick to apologise and make peace. But Apple insisted that its China customers enjoy the highest service standards.

Some wonder whether the attacks are just a case of tit-for-tat.

A US Congressional report last October accused Huawei of being a security threat.

"Just as the US attacked Huawei, China is taking it out on Apple in revenge," claimed "Blank Neo" on his Sina Weibo microblog.

Another possible explanation could be Beijing's unease with the wide usage of iPhones in China.

"There is a serious official desire for an indigenous mobile operating system," noted Bishop.

Also, the iPhone's operating system may be seen as a foreign security threat as it is a closed one and not easily monitored. The Android operating system, in contrast, is open and thus less of a threat, say observers.

The attacks could be a way of attracting eyeballs, suggested a consumer rights advocate.

"Apple has a huge customer base in China. Its news value is high," Wang Hai said.

What can Apple do to stop the rash of attacks?

Said Bishop: "I expect Apple to have to change its policies, express public contrition, and then this particular storm will blow over.

"They may also need to buy some ads on CCTV, as (search engine) Baidu and many other Chinese firms who have been on the receiving end did."

By Ho Ai Li

The Straits Times

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BRICS change the world: doing development differently

A prospective new financial architecture promises to reform and improve development finance for the world.

FIVE countries came together during the week to grab international headlines over how they might, as a group, change the world: Brazil, Russia, India, China and South Africa (Brics).

And they would do so in the most tried-and-tested way imaginable: financially, as a single economic entity. As a bloc Brics may effect change on a global scale, but the grouping would still do so in the traditional way of flexing economic muscle.

The annual Brics summit held during the week in Durban, South Africa, focused on what that muscle can do – challenge the World Bank and the International Monetary Fund in the way development finance is conducted, as well as the Western dominance that has prevailed in both Bretton Woods institutions.

Those institutions were never meant to be that way, of course, as a reading of their founding texts would show. But any initial magnanimity soon gave way to self-interest: US and European dominance of the World Bank and the IMF respectively was to be a Western “consensus” imposed on the world like a global neo-colonial regime.

Interestingly, the original Bric as both a term and a grouping originated not in any of the initial four countries or the developing world, but in the US itself.

None other than Goldman Sachs’ Asset Management Chairman Jim O’Neill coined the term in 2001 for those countries he believed would outpace the US in total GDP by 2020.

At the turn of the century Brazil, Russia, India and China were merely regarded by some as emerging economies developing under their own steam.

After O’Neill’s coinage they held their first summit in 2009 and invited South Africa to join them a year later, and Brics was born.

Since then, Brics as both concept and entity has had vigorous growth and a vibrant youth. It compares favourably with the IMF and the World Bank, both pushing 70 years and weighed down by limiting conditionalities and outmoded economic ideology.

Both institutions typically adopt a cold, mechanistic approach to development that prioritises market interests over human needs. Their Western bias is also a throwback in a 21st-century world of shared global interests and aspirations, and a world in which Western economies themselves are in trouble.

In contrast, Brics as a bloc of emerging economies serves as a bridge between the developing Third World and the developed First World. It seeks to narrow that yawning chasm by focusing on reviving global growth and ensuring macroeconomic stability.

Those virtues that had once been the preserve of the West have become its elusive goals. The “developed” and the “emerging” (mostly, once “developing”) economies have traded places.

The new global bank that Brics wants to establish is expected to emphasise infrastructure development and trade. The first represents solid investment in development for the future, and the second works as an economic multiplier for further growth.

On paper, Brics countries account for almost half the world’s population and just over a quarter of world trade. But more important than these bare figures is how Brics economies have been driving global growth for years, as acknowledged by the World Bank itself.

The idea for a new global bank arose only last year. So how the measured progress at the Durban summit is perceived depends at least as much on the observer: is the glass half-full or half-empty?

Some of the most difficult decisions, such as financing modes, remain unresolved. Its primary purposes like the operation of funds in project financing and a contingency fund as crisis buffer will take more time to work out.

Pessimists may cite how the absence of agreement on even the quantum of fund contribution from each country bodes ill for Brics. Basing the contribution on economic capacity makes sense, but concerns were expressed over how that would inevitably make a hulking China dominant.

A standard sum of US$10bil (RM31bil) from each country as seed capital was then considered, following a Russian proposal, but the final decision was left until later.

Optimists would say that far from weak indecision, this showed an openness about not wanting any country to dominate, with agreement on equality with a fair and manageable quantum for all.

However, realists may say that in such financial matters China would still eventually dominate. To that, it can be said that dominance by a single country was never a problem before, given the prominent US role and influence in the World Bank and the IMF.

At this point some may say it was precisely because of single-power dominance that had compromised the work of the Bretton Woods institutions. It might then be observed that a new global bank dominated by China would only balance the World Bank (and the IMF), which it would complement rather than replace.

Some observers may see crippling incompatibility in the different political systems within BRICS.

But such diversity need not be an obstacle, particularly when all countries now work within a global capitalist system.

President Vladimir Putin, often cited in Western circles as a modern incarnation of the Soviet bear, even insisted that a new global bank “must work on market principles only.” And “communist” China is not only a major and enthusiastic player in global markets, but – to former British foreign minister David Miliband – has even acted as a saviour of Western capitalism.

What worries fans of the IMF and World Bank is not how a new global bank as competitor will “steal their business,” but how it may force both to be more democratic and more sympathetic to the developing world. Who else but those currently dominating them in Washington and Brussels would object?

Japan as an emerging economy itself decades ago had its chance to forge a new alternative in international finance with the Asian Development Bank, but blew it.

The former coloniser in Asia seeking to make good in its post-war period, with US partnership, soon settled into establishment mode alongside its Bretton Woods equivalents. A new global bank established by BRICS will be a welcome addition to the existing financial institutions.

Its continental and political diversity would also make a slide into betraying its noble purpose more difficult.

Late last year, Brazil suggested that the proposed bank should be modelled on Asean’s Chiang Mai initiative.

This is a time for a sharing of experiences when each can learn from the rest, not of jealous exclusion and unfounded fears of rivalry.

In time, perhaps even the World Bank and the IMF can find it in themselves to accommodate and welcome new financial institutions operating on their “turf”.

At least that would help them return to their initial noble calling.

Behind the Headlines
By BUNN NAGARA

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Financial crises a result of governance failures

ROMAN emperor Julius Caesar was famously warned by a seer about the Ides of March, traditionally March 15.

On March 15 this year, banks in Cyprus were closed to allow politicians time to decide how to raise 5.8 billion euros so that the country could qualify for 10 billion euros in bailout funds from the rest of eurozone and the International Monetary Fund (IMF). The solution suggested was to levy a tax on depositors, sparking a realisation that finally, the Europeans had decided to “bail-in” investors and depositors, rather than using public funds to “bail-out” everyone else.

The Cyprus crisis caused a stir in global financial markets, because it punctured expectations that the worst was over. Instead, it demonstrated another episode of muddling through.

Banks in Cyprus re-opened on Thursday with new capital controls on the amount depositors can take out. Larger depositors with over 100,000 euros would stand to lose up to 40% of their deposits. Of course, a significant portion of the deposits in Cyprus banks belong to Russians, who may suffer losses of 4 billion to 6 billion euros. For certain investors, this is the price of putting money in higher risk offshore financial centres. The price to Cyprus of operating as an offshore financial centre is likely to be a drop of GDP of more than 20% in the next couple of years.

The Cyprus outcome is not unexpected. If European governments are to be loaded with heavy debt burdens as a result of the crisis, they will be bound to start “taxing” offshore financial centres, where rich Europeans had been avoiding tax for years. If the eurozone banking union is to have any credibility, they will have to start controlling banking centres which operate largely on tax and regulatory arbitrage. Moreover, having banking assets seven to eight times GDP is no longer considered viable, whether for Cyprus or Iceland.

At the heart of such troubles lies the issue of governance. Financial crises are more governance failures than anything else.

Last week, The End of History philosopher and political scientist Francis Fukuyama published an important blog commentary on “What is governance?” This is the much-awaited part of his promised series on political governance, beginning with his 2011 book The Origins of Political Order. In that book, he looked at the three components of a modern political order a strong and capable state, the rule of law and accountability of the state to its citizens. Since the 2011 book stopped at the French Revolution, most readers would be curious to see how he handled the rise of China, which has a different political system from the West.

Fukuyama's new definition of governance is “a government's ability to make and enforce rules, and to deliver services, regardless of whether that government is democratic or not.” Notice that he has decided to remove any suggestion that democracy is automatically associated with good governance, appreciating that “an authoritarian regime can be well governed, just as a democracy can be mal-administered.”

Accordingly, he uses four approaches to evaluating the quality of governance: procedural measures, input measures, output measures and measures of bureaucratic autonomy. To put it into simple language governance should be measured according to how you govern (the processes); the efficiency of governance (how much tax or resources you need); the effectiveness (outcomes rather than objectives) and whether the bureaucracy is independent of politics or not (the autonomy question).

In dissecting governance into its different dimensions, Fukuyama has helped to clarify the methodology in thinking about the tradeoffs between the ability to have high discretion versus being bogged down by excessive rules, and high capacity to execute, versus low capacity to execute. Critics of that approach would argue that strong states with excessive discretion may not be sustainable. On the other hand, weak states with too many rules and no discretion may not be sustainable either.

Fukuyama is right to point out that the bureaucracy's interests may not be identical to those of the people. The bureaucracy is supposed to be agent of the people (the principal), but many bureaucracies serve their own interests, rather than the public to the extent that civil servants may be neither civil nor servants.

Indeed, the simplistic view that the state is deterministic versus the view of free market self-order misses the fundamental point that large bureaucracies also have self-order. Anyone familiar with working in large complex bureaucracies in China, India or the United States, with many layers of government, would recognise that it is not easy to implement policies from the centre. State or provincial governments have a mind of their own, with very different priorities from that of the centre.

Indeed, in the 21st century, many cities have become more effective instruments of state, and it is not surprising that effective mayors have become national leaders because they show a capacity to deliver close to the people.

The more interesting question about governance is: why are collective action traps so pervasive? In other words, it is understandable why ineffective and weak bureaucracies or political systems are unable to overcome gridlock in their systems, but it is common to see highly effective and capable bureaucracies also caught in gridlock.

These gridlocks are apparent in the resolution of the euro crisis, the stalemate in the Doha World Trade Organisation negotiations and the Durban climate change debates. In the first week of April, the Institute for New Economic Thinking, the Centre for International Governance Innovation and the Fung Global Institute will be hosting a major conference in Hong Kong on how creative and innovative thinking can open up new avenues of thinking on the solutions to global governance. As a respected member of the global economic community, Hong Kong should make its voice heard.

You can watch most of the podcasts on www.ineteconomics.org or www.fginstitute.org.

THINK ASIAN By ANDREW SHENG

Tan Sri Andrew Sheng is president of the Fung Global Institute. 

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US fiscal deficit position is cheating American Children

So, about that fiscal crisis — the one that would, any day now, turn US into Greece. Greece, I tell you: Never mind.

Over the past few weeks, there has been a remarkable change of position among the deficit scolds who have dominated economic policy debate for more than three years. It’s as if someone sent out a memo saying that the Chicken Little act, with its repeated warnings of a U.S. debt crisis that keeps not happening, has outlived its usefulness. Suddenly, the argument has changed: It’s not about the crisis next month; it’s about the long run, about not cheating our children. The deficit, we’re told, is really a moral issue.

There’s just one problem: The new argument is as bad as the old one. Yes, we are cheating our children, but the deficit has nothing to do with it.

Before I get there, a few words about the sudden switch in arguments.

There has, of course, been no explicit announcement of a change in position. But the signs are everywhere. Pundits who spent years trying to foster a sense of panic over the deficit have begun writing pieces lamenting the likelihood that there won’t be a crisis, after all.

Maybe it wasn’t that significant when President Barack Obama declared that we don’t face any “immediate” debt crisis, but it did represent a change in tone from his previous deficit-hawk rhetoric. And it was startling, indeed, when John Boehner, the speaker of the House, said exactly the same thing a few days later.

What happened? Basically, the numbers refuse to cooperate: Interest rates remain stubbornly low, deficits are declining and even 10-year budget projections basically show a stable fiscal outlook rather than exploding debt.

So talk of a fiscal crisis has subsided. Yet the deficit scolds haven’t given up on their determination to bully the nation into slashing Social Security and Medicare. So they have a new line: We must bring down the deficit right away because it’s “generational warfare,” imposing a crippling burden on the next generation.

What’s wrong with this argument? For one thing, it involves a fundamental misunderstanding of what debt does to the economy.

Contrary to almost everything you read in the papers or see on TV, debt doesn’t directly make our nation poorer; it’s essentially money we owe to ourselves. Deficits would indirectly be making us poorer if they were either leading to big trade deficits, increasing our overseas borrowing, or crowding out investment, reducing future productive capacity. But they aren’t: Trade deficits are down, not up, while business investment has actually recovered fairly strongly from the slump.

And the main reason businesses aren’t investing more is inadequate demand. They’re sitting on lots of cash, despite soaring profits, because there’s no reason to expand capacity when you aren’t selling enough to use the capacity you have. In fact, you can think of deficits mainly as a way to put some of that idle cash to use.

Yet there is, as I said, a lot of truth to the charge that we’re cheating our children. How? By neglecting public investment and failing to provide jobs.

You don’t have to be a civil engineer to realize that America needs more and better infrastructure, but the latest “report card” from the American Society of Civil Engineers — with its tally of deficient dams, bridges, and more, and its overall grade of D+ — still makes startling and depressing reading. And right now, with vast numbers of unemployed construction workers and vast amounts of cash sitting idle, would be a great time to rebuild our infrastructure.

Yet public investment has actually plunged since the slump began.

Or what about investing in our young? We’re cutting back there, too, having laid off hundreds of thousands of schoolteachers and slashed the aid that used to make college affordable for children of less-affluent families.

Last but not least, think of the waste of human potential caused by high unemployment among younger Americans — for example, among recent college graduates who can’t start their careers and will probably never make up the lost ground.

And why are we shortchanging the future so dramatically and inexcusably?

Blame the deficit scolds, who weep crocodile tears over the supposed burden of debt on the next generation, but whose constant inveighing against the risks of government borrowing, by undercutting political support for public investment and job creation, has done far more to cheat our children than deficits ever did.

Fiscal policy is, indeed, a moral issue, and we should be ashamed of what we’re doing to the next generation’s economic prospects. But our sin involves investing too little, not borrowing too much — and the deficit scolds, for all their claims to have our children’s interests at heart, are actually the bad guys in this story.

By Paul Krugman

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China's First Lady Peng Liyuan leading by example

China’s First Lady Peng Liyuan made a fashion statement during a recent visit to Russia and Africa. 

AS Xi Jinping continues his first official visit to African countries as the Chinese President, his wife Peng Liyuan is as much of a star attraction back in China.

The close attention on Peng is not so much due to her new role as China’s First Lady but rather the fashion statement she made during the trip.

Peng arrived in Moscow, Russia, on March 22 with her husband in a double-sided buttoned navy blue coat with a black handbag.

Her clothes matched perfectly with that of her husband’s.

She wore a jacket decorated with motifs of blue flowers and birds over a black dress and carried a black purse when attending an event at the MGIMO University in the Russian capital.

In Tanzania on Monday, she appeared in an all-white jacket and skirt.

The navy blue coat and black handbag she wore and carried in Russia started the “Liyuan-Style” mania.

Soon, word spread on the Internet that the coat and handbag were not from luxurious foreign brands but were made by Exception de Mixmind, a Chinese brand established in Guangzhou in 1996.

After confirmation of this by the Guangzhou City Administration of Quality and Technology Supervision on its microblog, many Chinese praised Peng for supporting local brands and for carrying the pride of China during her visit.

Some Netizens said Peng looked “elegant” and “nicely-matched” with her clothes, while many others started creating forum threads on what clothes the First Lady would wear next.

Beijing Institute of Fashion Technology art and design department head Xie Ping was quoted by Beijing News as saying that the coat was designed based on a classical Western army uniform.

Qingdao Municipal Textile and Fashion Association secretary-general Zheng Mingmei said that the coat and handbag that Peng used in Russia fitted her personality and character well.

“What the First Lady did by wearing a local brand has no doubt increased the reputation of China-made brands internationally and boosted the confidence of our fashion brands in Qingdao,” she told Qingdao Morning News.

According to reports in China, major search engines and online shopping websites have seen a significant increase in the number of search words such as “Liwai (Exception in Mandarin)” and “Wuyong (Useless which is the sister brand of Exception)”.

The Exception de Mixmind outlets in Chengdu and Qingdao have received more customers than before, with many asking about the navy blue coat and black handbag worn by the First Lady.

The staff at the outlets told customers that they did not sell models of the coat and handbag.

Despite that, many customers still walked away with handbags resembling that of Peng’s.

Prices of its spring collection cardigans and long cotton shirts ranged between 1,000 yuan and 2,000 yuan (RM490 and RM980) while new handbags were priced between 2,000 yuan (RM980) and 3,000 yuan (RM1,470).

Qingdao Morning News reported that Peng’s coat should belong to last year’s winter collection series and cost around a few thousand yuan while the handbag similar to that of Peng’s was estimated to have cost 5,000 yuan (RM2,450).

“Compared with other coats and handbags around the same range, design and craftsmanship, the coat and handbag used by her were not too pricey,” said a staff.

Even before the First Lady fashion mania, Exception de Mixmind had already been quite an established brand.

Chinese tennis star Li Na wore a stand-up collar white shirt with black motifs during her photo call after her triumph in the French Open in 2011, and that shirt was from Exception’s 2007 “Tea Energy” series.

At that time, Exception founder and chairman Mao Jihong quashed rumours that the company sponsored Li Na’s fashion wear, saying that she was never their brand ambassador but they were delighted to see her wearing their label.

Of course, this time, it’s a bit different.

With Peng’s stature as the First Lady and a celebrity (Peng is one of China’s top female sopranos who sings a repertoire of ethnic and patriotic songs), this gives the brand more recognition.

In its editorial, Beijing Morning Post said there were three reasons why Peng received so much attention from the people and media.

One was that she was using made-in-China goods, second the clothes and handbags were not from luxury brands and third being her poise in leading by example.

“Nowadays, luxury consumption has be­c­ome a trend to show off one’s wealth.

Peng’s handbag is in a way a wake-up call for many Chinese who pursue luxury goods.

“After the Chinese Communist Party’s national congress (last November), the government outlined eight guidelines on improving its working style.

“Peng showed an important detail which was advocating austerity and a frugal lifestyle,” it said.

MADE IN CHINA BY CHOW HOW BAN

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