Japan PM Abe's visits to Yasukuni glorifying Japan's war criminals, stirs new tension in Asia!

Japan's Prime Minister Shinzo Abe (2nd L) is led by a Shinto priest as he visits Yasukuni shrine in Tokyo December 26, 2013. [Photo/Agencies]

Exclusive interview: Abe accused of internationally insulting China and ROK CCTV News - CNTV English

Serious consequences warned after Abe pays war tribute

Shinzo Abe stunned the international community on Thursday by making himself the first sitting Japanese prime minister in seven years to visit a shrine that honors 14 World War II Class A war criminals among the country's war dead.

The abrupt move — widely viewed as rewriting public memory on Japan's militaristic past — enraged Japan's victimized neighbors including China and South Korea and disappointed Japan's traditional ally the United States.

Observers said the hard-core nationalist Abe is ruining the stability of Northeast Asia and that he seems to believe it is worthwhile to sacrifice honesty about history in order to revitalize Japan's assertive style of expansion before World War II.

Foreign Minister Wang Yi summoned Japanese Ambassador to China Masato Kitera to lodge a strong protest on Thursday. Beijing vowed zerotolerance for Abe's touching the bottom of the bilateral relationship, and for betraying the commitment of his government and his predecessors, he said.

Japan must bear "full responsibility for the serious political consequences" of the visit, he said, adding Abe's action has pushed Japan in an "extremely dangerous" direction.

The shrine used to serve as a spiritual tool and symbol of Japanese militaristic aggression, and Abe's pilgrimage is "a flagrant provocation against international justice", Wang said.

South Korean Culture Minister Yoo Jin-ryong said in a statement that "our government cannot repress lamentation and rage over Abe's paying of respects at the Yasukuni shrine, which glorifies its colonial aggression and enshrines war criminals".

A few hours after Abe went to the shrine, the US Embassy in Japan released a written statement saying that "the United States is disappointed that Japan's leadership has taken an action that will exacerbate tensions with Japan's neighbors."

Washington hopes that Japan and its neighbors will "find constructive ways" to deal with sensitive issues from the past, the statement said.

Yang Bojiang, deputy director of the Institute of Japan Studies at the Chinese Academy of Social Sciences, said Abe's visit will deal a heavy blow to Japan's international image and further isolate the country.

"Abe is risking support from within both Japan and the United States, and his political life will come to an earlier end," Yang warned.

Japan has strained its diplomatic relationships with China, South Korea and Russia in the past two years because of disputes over islands and historical issues, and the situation has also been a headache for Washington.

James Fallows, a national correspondent for The Atlantic Monthly, said, "there is almost nothing a Japanese prime minister could have done that would have inflamed tempers more along the Japan-China-South Korea-US axis than to make this visit".

"Americans who visit the ‘historical' museum at the shrine (as I have done) will note its portrayal of Japan being "forced" into World War II by US economic and military encirclement," Fallows wrote in his latest online article.

Abe is deliberately stirring up the situation to "make sure the tension does not fade away", said Feng Wei, a professor of Japanese studies at Fudan University in Shanghai.

"Because there will be no more excuses for his plan of revising Japan's pacifist Constitution if there is no tension in Japan's neighborhood," Feng said.

The visit was made as Abe's public support this month dropped to a record low since he retook office last December.

Akihiro Nonaka, a professor at the School of Political Science at Waseda University in Tokyo, said "the enshrining of the Class A criminals is unconstitutional, according to Japan's Supreme Court".

"He does not show respect for the countless Asian people who died in the war," Nonaka added.

Zhou Yongsheng, a professor of Japanese studies at China Foreign Affairs University, said what is behind Abe's pilgrimage is the accelerating pace of the Japanese government in seeking a right-wing style of governing, which is "bringing a huge threat to regional peace".

"As Abe is bent on eliminating all legislative restrictions against Japanese armed forces waging a war, the international community will be unable to rein in Japan from taking such a dangerous step," Zhou warned.

- China Daily USA

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Malaysia's jobless rate rising; Penang full employment, CM Christmas messages

Penang Chief Minister Lim Guan Eng looking at the artist impression of  The Top Komtar roof top project together with Only World Group chairman and group CEO Dato Richard Koh during the ground breaking ceremony, October 29, 2013. — Picture by K.E. Ooi

Prospective job hunters unable to score employment elsewhere in the country should try their luck north.

Penang Chief Minister Lim Guan Eng announced today a booming market in the northern state, so much so that employers are hard put to find sufficient qualified manpower to fill 20,000 vacancies critical to keep their entrprises running.

“There is a growing [sic] at the increased in unemployment rate in the country which is at 3.3 per cent in October 2013, an increase of 0.2 per cent from the 3.1 per cent in September this year,” Lim said, citing figures released by the Department of Statistics.

Official date from the departmen showed the number of unemployed in the country to total 462,300 people, an increase of 19,100 people from September to October.

In contrast, the number of people with jobs was cut by 98,500, leaving 13.7 million people employed out of a total population of 28 million.

“Despite the rise in unemployment rate in Malaysia, Penang continues to see not just full employment but a shortage of at least 20,000 workers,” he added in his Christmas message statement.

Lim attributed Penang’s high employment rate to its recent successes in securing several critical foreign direct investments (FDI).

He said his state government will be making several important announcements on these FDIs next month, with a promise that the details will fulfil Penang’s pro-growth and pro-jobs objectives that he boasted had become its policy since he took control of the state in 2008.

“Penang has neither been distracted nor detracted from seeking sustainable growth that provides jobs for Malaysians,” he said.

He proudly pointed out Penang’s annual healthy budget surpluses recorded since PR took over the state administration five years ago.

“The budget-based administration we implemented since 2008 had led to an increase in state assets by 50 per cent to RM1.2 billion and a reduction in state debt by a record 95 per cent,” Lim said.

As for investments, he said the state had recorded RM36.1 billion in investments between the years 2008 and 2012, which is almost double of the RM18.7 billion in investments between 2003 and 2007.

“This was achieved through fighting corruption, establishing integrity in public service and open competitive tenders,” he said.

He said the state is moving towards an outcome-based administration that focuses on getting value-for-money for government expenditure to lower maintenance costs while ensuring better quality in the public delivery of services.

He reassured Penangites who fall into the poor and the less-fortunate categories that they will not be forgotten, saying the state will continue to disburse cash allowances through its various social welfare programmes funded from its savings of public projects.

“We have also adopted the unconditional cash transfer model of topping up all families whose monthly household incomes are below the poverty line of RM 790 per month to make Penang free from poverty,” he said.

As part of his message for the season, he reiterated his administration’s pledge to roll out by February next year, a three-pronged housing policy, which has been a major issue in the land-strapped state.

To help put housing prices within the bank accounts of more residents, Lim said the state will compel private developers to build a fixed percentage of affordable housing priced below RM250,000 on the mainland, and below RM400,000 on the island.

The Air Putih assemblyman said the state investment arm, Penang Development Corporation, will also undertake to construct 20,000 units of public housing, to be priced below RM72,500 per unit.

There would also be a 10-year limit on reselling government-built housing, a five-year cap on homes built under the affordable housing scheme to prevent speculation.

Lastly, he said his administration will start imposing a 3 per cent tax on foreign property transactions and a 2 per cent levy on all properties that are resold within a three-year period.

“Just as Christmas is celebrated to give life to all, Penang can only prosper if everyone regardless of race or religion can enjoy the fruits of success together,” Lim said.

- Contributed by Opalyn Kok

Guan Eng's Christmas message gives a glimpse of new 'OUTCOME-BASED' policies 

The Penang state government reaffirms CAT governance of competency, accountability and transparency that upgrades budget-based to outcome-based administration that ensures economic growth(pro-growth), employment opportunities(pro-jobs) and equitable justice(pro-poor). Penang has neither been distracted nor detracted from seeking sustainable growth that provides jobs for Malaysians.

There is growing concern at the increased unemployment rate in Malaysia announced by the Department of Statistics at 3.3% in October 2013, up 0.2 percentage point from the 3.1% in September this year. October 2013 saw an increase of the unemployed by 19,100 persons to 462,300 persons, and there was a drop of employed persons by 98,500 to 13.70 million people.

Despite the rise in unemployment rate in Malaysia, Penang continues to see not just full employment but a shortage of at least 20,000 workers. Penang’s recent successes in securing several critical foreign direct investments, which will be followed by important announcements next month, will fulfil the pro-growth and pro-jobs objectives of the Penang PR state government.

The budget-based administration implemented by PR since 2008 has led to a healthy budget surplus every year, increase in state’s assets by 50% to RM 1.2 billion and a reduction in state debt by a record 95%. Again, investments was a record RM 36.1 billion for 5 years from 2008-2012, which is nearly double that compared to RM18.7 billion from 2003-7. This was achieved through fighting corruption, establishing integrity in public service and open competitive tenders.

Outcome-based administration

Moving towards outcome-based administration in the second term of government, focuses on getting value-for-money for government expenditure that will not only assist in reducing maintenance costs but also ensure better quality in the public delivery of services. This will go a long way towards achieving a cleaner, greener, safer and healthier Penang.

However the poor, the weak and those who need help are not forgotten. Penang is not only the first state to give cash contributions to ordinary citizens as part of the anti-corruption dividend but also the first state in Malaysian history to wipe out corruption. Adopting the unconditional cash transfer or UCT model of topping up all families whose monthly household incomes are below the poverty line of RM 790 per month, Penang is free from poverty.

First-time buyers and middle-income groups seeking to buy houses will benefit from the 3-prong housing democracy strategy of:-

• Compelling private developers to build a fixed percentage of affordable housing(above RM72,500 but below RM250,000 on the mainland and below RM400,000 on the island) and public housing(below RM72,500);
• Building 20,000 units of affordable housing through Penang Development Corporation(PDC); and
• Implementing new housing rules after 1 February 2014 of a 10 year restrictions on resale on public housing and 5-year restriction on affordable housing, an approval fee of 3% on foreign transactions and a 2% approval fee of all sales made within 3 years from signing of the Sales & Purchase Agreement.

Just as Christmas is celebrated to give life to all, Penang can only prosper if everyone regardless of race or religion can enjoy the fruits of success together.

Penang is also proud to offer fundamental rights such as freedom of speech and expression. As the art and cultural capital of Malaysia, Penang celebrates the right to live with dignity in an inclusive society. As Nelson Mandela said, “.For to be free is not merely to cast off one's chains, but to live in a way that respects and enhances the freedom of others.”

- LIM GUAN ENG IS THE PENANG CHIEF MINISTER

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Transforming the company into a heavyweight, sharing his love

Tee (left) and Ooi chatting with Mazlin.

Transforming Daya into a heavyweight

Contributed by Tee Lin Say

YOU have to meet Daya Materials Bhd executive vice-chairman Datuk Mazlin Junid in person to understand why he appeals to people at large.

The first thing you notice is how witty and direct he is. So, no superficial talk on “how your day was” or whether “the coffee tastes okay”.

Mazlin tells you things as it is, so don’t ask if you aren’t prepared. That, however, is his charm. What you see is really what you get.

Physically, Mazlin is good looking. Despite the Prada loafers and 7 for all mankind jeans, there is an almost Neanderthal-like quality about him. In the band of brotherhood, Mazlin’s more of your Vin Diesel than an Orlando Bloom.

He has two great goals in life now. The first is a vision to transform Daya into a heavyweight. He’s aiming for the company to join the billion dollar club over the next three years. (For the nine months to Sept 30, 2013, Daya’s revenue jumped 110% to RM373mil in revenue and net profit increased 26.74% to RM18.9mil)

The other, is to look like his idol, Australian actor Hugh Jackman.

He loves the pain that comes with pushing himself to extremes. Dumb bells are his favourite toys. Why, he even celebrated his birthday in the gym with his gym mates.

“I am 52 now. I have done it all. The cars, the yacht, you name it. What turns me on now is winning contracts for Daya,” says Mazlin resolutely.

“At the end of the day, a company needs to deliver. We are very focused on creating value and growing the company over the long term. I have huge responsibility to my staff and the people who gave us contracts. We have to deliver based on my vision for the company, Daya is still undervalued, “says Mazlin.

“You must always take responsibility. It’s not about following your emotions. Whether it’s to your family, the people you work for, your client, or someone you dislike, take responsibility,” he says.

He adds that with Daya Offshore Construction Sdn Bhd (DOC) going out there to secure contracts from Norway, Daya is in fact going against the grain of typical Malaysian oil and gas companies.

When asked what Malaysia’s problems are, he responds: “If there is a hard truth Malaysian companies must learn, it is to stop the habit of political patronage,”

Not surprising, Daya has been one of Bursa Malaysia’s outperformers this year. On a year-to-date basis, the stock is up 116% to 41 sen as of Thursday.

While Daya started off in 1994 as a specialised polymer company, it has since expanded substantially into the oil and gas (O&G) business. Daya was initially more focused on the downstream O&G segment, where it was already established as a leader particularly in chemical services. It chugged along, growing organically until this year, which was clearly the inflection point for Daya.

This started with the formation of DOC last September, of which Mazlin appointed Mark Midgley CEO.

Almost immediately DOC began delivering results.

The arrival of vessels Siem Daya 1 and Siem Daya 2 literally created waves. DOC secured two major contracts in less than six months from Norwegian firm Technip Norge AS for charter and subsea contracts worth RM440mil and RM100mil-RM176mil respectively.

The latest research house to give its mark of approval to Daya’s efforts is RHB Research, which has a 48-sen target price. DOC is already contributing almost 50% to Daya’s topline.

“Suddenly Nathan (Daya’s MD Nathan Tham) was busy answering calls from some 40 fund managers. People wanted our shares and started saying Daya was the smallest O&G stock and with the most growth. I guess this is what happens when earnings have been growing organically over the last five years,” laughs Mazlin.

Sharing his love

Contributed by Xandria Ooi

FASCINATION is what I’m feeling when talking to Datuk Mazlin Junid, a man who doesn’t mince his words, yet laughs so often you know he doesn’t take himself seriously.

Work, however, is a different matter.

When you’re a business leader, he says, you don’t have to be liked. “If you want to be popular, you can’t get things done.”

We’re sitting in the quiet guest lounge of Daya Materials and Mazlin is extremely casual and candid. It feels like a chat, not an interview.

He explains to me how he doesn’t hesitate to fire people, even at the directorial level, because they either weren’t performing or did something that conflicted with the interests of the company.

“And he could be a friend,” he says matter-of-factly. “Friendship is secondary, the company always comes first. All that matters is our bottom line.”

I can’t let it go, not quite believing that a man as affable as he is, truly doesn’t care what his employees think of him. Don’t people who like and respect their bosses look forward to going to work and having the motivation to work harder?

“Well, I like them to like their jobs.”

Would you be okay if your successor in the future is a woman?

“Oh certainly, I’m not gender specific. I’d like to have more female board members but right now, there’s only a few. Malaysia’s industry has always been a bit chauvinistic with few women leaders, except maybe banking.”

He mentions Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz as a woman he feels is a brilliant leader, alongside Tan Sri Rafidah Aziz and Datuk Farah Khan.

“Women,” he says, “are more passionate. There are very few female business leaders who can be as cold-hearted as men. People like me, I’m very cold-hearted.”

In what way? “Well, when I take more than one wife, for example, I’m very cold-hearted about it.”

But that’s not business, I protest, laughing.

But since he brings up his wives, I assume I’ve just been given permission to delve into the topic of his rather large family, with four wives and now three, after a recent divorce.

People ask him, all the time, why he chose to have so many wives.

“And I tell them ... because I could. Although now, I wish I hadn’t.”

Why? I’m fascinated. This is, by far, one of the most interesting conversations I’ve had about relationships.

He makes a noise, somewhere between a grunt and a sigh. “The amount of stress and management! Obviously, all these things that happened, nothing was planned.”

I raise my eyebrows. What do you mean, nothing was planned? When you propose to a woman, isn’t it planned? I point out.

He counters that it wasn’t his lifelong ambition to get married multiple times. “Sometimes it was done on a spur of a moment”.

Are you the kind of man who gets swept away by love and that’s why you propose to women on impulse?

“That’s a good question,” he muses. “Somebody asked if I know what love means. Until today, I can’t figure it out – what love for a wife is all about. Responsibility, somehow, is stacked right at the top for me.

Running one household is hardly easy, but to run four (now three) at a time, takes some mighty management skills. Mazlin has it down to a workable, practical schedule that he says keeps everyone happy.

As he explains it, “Relationships are just like work. I use my work practices at home. There are tasks to be done and I implement the same regime for every household.”

I listen wide-eyed as he elaborates, describing how he sometimes repeats the same holiday three times with his different wives.

“No, my wives don’t mix,” he volunteers the information, knowing what I am about to ask just from the look on my face.

Surely there’s bound to be jealousy?

“They’re not jealous of each other, but they’re jealous of other women!” he declares and I am reminded of how he can now marry another.

“Somebody asked me if I’m on a fleet renewal programme,” he jokes. “But no, I have my hands full right now.”

Making Malaysia’s Base Lending Rate more relevant

 New interest rate framework expected to be more linked to funding cost

BANK Negara is moving ahead with the times by replacing the outdated base lending rate (BLR) with a more relevant interest rate benchmark.

“The BLR has become less meaningful as a basis for the pricing of loans, as the retail lending rates on new loans being offered by the industry are at a substantial discount to the BLR,’’ The Star reported, quoting governor Tan Sri Dr Zeti Akhtar Aziz.

For the third quarter this year, the average lending rate (AVL) was 5.4% compared with the BLR of 6.53% and fixed deposit (FD) rate of 3.15% for 12 months.

For the corresponding quarter last yer, the AVL was 5.55% while the BLR was still at 6.53% while the FD rate for 12 months was 3.16%.

The current BLR reflects other costs such as overhead costs.

The new framework will be more related to funding cost, especially marginal funding cost, which is actually how banks are pricing their loans, Zeti said.

While work is underway to come up with a new BLR, the intervention rate under the current BLR framework is expected to nudge upwards, said Nazlee Khalifah, the chief corporate strategist of Affin Bank.

Under the current BLR regime, the intervention rate of 3% is expected to increase 25 basis points by next June, said Nazlee.

The upcoming BLR is being discussed with a concept paper expected next month.

‘“They have to think of how to prevent capital flight as interest rates in the United States may rise and attract capital back to the country,’’ said Nazlee.

Beginning next January, the Fed announced it would start pulling back its bond buying from US$85bil per month to US$75bil.

Instead, it will provide forward guidance on interest rates which are expected to remain low, in view of US unemployment being above 6.5% and inflation kept low.

The US$1 trillion stimulus programme has been a huge success but this is the journey back to fundamentals.

The world economy is being weaned of easy money and every player has to play his part in ensuring recovery and sustainability.

It is not enough for just the regulators to be keeping an eagle eye on miscreants but the participants themselves have to know their limits.

The Hong Kong Securities and Futures Commission is cracking down on insider trading.

In a landmark ruling, a Hong Kong court has ordered Du Jun to pay 297 investors almost HK$24mil for the money he earned from his illegal dealing in 2007, said the South China Morning Post (SCMP).

Last year, 7,700 investors who bought shares of Hontex International were paid back after a court ordered the sport fabric maker to pay HK$1.03bil to small shareholders for allegedly misleading information in its listing prospectus, said the SCMP.

There have been many instances of insider trading but the punishment has become more severe in view of the trend towards investor protection and reimbursement worldwide.

Contributed by Columnist Yap Leng Kuen applauds the tapering off of the era of easy money.

It is a small world

The world is actually quite small

EVERY week, I go to the nearby wet market to stock up on provisions. One of the stalls I have to stop by is run by a young man who knows that I am there to collect my weekly quota of 20 kampung eggs.

Recently I asked him if he might want to consider starting up an online service to provide home delivery to his regular customers. After all, even the major hypermarkets are going big time in providing such a service to tap into the trend of people being so busy that grocery shopping needs another approach.

His reply tells me once again that true wisdom rests among ordinary people who truly know what the real world is all about. You can grab quotations from wise men and manage­ment gurus but sometimes the real gems are from people like my egg seller.

He basically told me that it is better for me to come out and get the chance to meet people rather than stay in the house. Every moment in any public area, he said, is fresh and unpredictable.

“You can bump into people you have not met for a long time or come across something interesting that cheers you up when you are feeling down,” he said.

The egg seller is correct to say that every moment in public is fresh and unpredictable. I have always believed that nothing happens by chance. Some call it divine appointments but it is this connection of one human to another that opens up a myriad of possibilities.

Through such encounters, we learn that the world is actually quite small once we start connecting the dots and learn that the person we have just met is actually not quite a stranger after all.

As much as I love the written word, I find that it is the spoken word, with all the body language appended, that conveys the true meaning of what we want to say.

To tell someone you are sorry through a card is easy even if you do not really mean it. But to say you are sorry up close and personal, you’d better mean what you say or else.

Those who are less socially inclined than I am will disagree when I say that we are not created to be solitary beings. We need company to flourish in thought and in deed.

We can talk about feeling the pulse of the people and of being connected to the grassroots, but if we are only doing so from the comfort of our living room or office, we will never get the real picture.

Some of the things I read online will make me think there is absolutely no hope left in the country, but when I am out there, I realise that this is just not the case.

Take a ride on the bus or the LRT, drop in to see a friend at the hospital, take a walk around the neighbourhood, have a chat with the grasscutter ...

Then you will learn that the world we live in is a wonderful place because the people make it so.

And we do so by not merely looking out for our own personal interests, but also for the interests of others.

In this season of Christmas, it is my hope that we do our part to reach out and love one another. We can, and we will, make a difference.

Contributed by Soo Ewe Jin. He wishes all Christian readers a blessed Christmas with a gentle reminder that this is the season not only for giving but for forgiving as well.

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Get pay from spying?

Whistleblowing hero: Germans holding up pictures of Snowden while protesting in front of the Reichstag building which houses the Bundestag (lower house of parliament) in Berlin . — AFP

Heavy-duty spying does not pay 

The hidden costs, and the controversy, of the massive US global spying operation keep on growing.

IF officials behind the US-based “Five Eyes” spying network had hoped the scandal would soon fade away, their obvious disappointment should be an object lesson about their excesses and abuses.



US, British, Canadian, Australian and New Zealand spies – together with their Singaporean and South Korean co-conspirators – had violated the implicit trust placed in their governments by friendly and ally nations around the world.

Former US intelligence contractor Edward Snowden had exposed how the conspirators had tapped into fibre-optic cables in 20 locations worldwide and infiltrated 50,000 computer networks.

This unprecedented scale of spying makes no distinction between friend and foe. It has provoked questions about the value of being a friend or “ally” of these Western countries.

Countries in the world’s main regions have routinely been spied on: Europe, East Asia, West Asia and Latin America. The spying exceeds all norms of intelligence gathering to target the personal cell phones of national leaders, from German Chancellor Angela Merkel to Indonesian President Susilo Bambang Yudhoyono and even his wife Ibu Ani Yudhoyono.

Snowden’s leaks reveal that Spain, for example, had been spied on so much as to have 20 million phone calls tapped each day. For the US authorities to insist that it was all for the sake of fighting terrorism is too much of a stretch.

The spying covers economic as well as political purposes. It was revealed that a foreign government’s confidential information picked up from spying is also used to give an unfair advantage to US companies against other companies in bids for international contracts.

Today’s supercomputers can do a lot of work in very little time. The ones used in the US global spying scheme apparently had very little ethical human supervision, precisely because that was the intention.

It has long been a “given” that all countries gather intelligence, to varying degrees, through some of their diplomats, expatriates and other undercover operatives. The extent of this activity also varies with the distance in relations between the spying country and the one spied upon.

Between friendly countries, discussions on issues of common interest and concern are the means of updating one another on events. Excessively intrusive and invasive spying, however, such as the kind Snowden has revealed, is supposed to be for untrustworthy governments and enemy nations.

Such universal perceptions and expectations lie at the heart of the current spying controversy. There is little wonder that countries so sordidly spied on take the matter so seriously.

Such spying shows the United States would enforce its will on all other countries, as opposed to sharing information between equal partners with mutual respect. It also implies that rules will be made by the US alone.

At the bilateral meeting in Jakarta during the week between Malaysian Prime Minister Datuk Seri Najib Tun Razak and Susilo, Malaysia declared full support for Indonesia in placing the spying scandal on the agenda of the next Asean Summit in Myanmar.

In seeking a satisfactory corrective for spying intrusions that breach all known limits, granting a regional profile to the problem is the least that Indonesia and Malaysia can do. Thailand is another Asean country targeted by these spies operating in part from the respective Australian embassies.

France and Germany are particularly outraged by “Five Eyes” snooping. Italy, the Netherlands and Spain are also concerned, as the scandal unites political parties within individual nations as well as European countries throughout the EU – except for Britain.

The aggrieved countries find the excessive spying violating privacy rights, their national sovereignty as well as their domestic laws. US officials predictably reject its seriousness.

The EU now wants a new law requiring private IT companies to inform European regulators if a foreign snooping request is made on any European citizen. That effort could clash with an existing US law that bans any company whose “cooperation” is required from telling anyone.

The potential conflict would pit European determination against US intransigence. It would further test the trans-Atlantic alliance in the post-Cold War period.

As the initial leaks started to provoke European anger, clandestine efforts tried to dilute or divert the upset.

It was somehow also “leaked” that the French government had been spying on its own population, followed by allegations that the German government had known about and even used information obtained by US-connected spies. The truth of these “mitigating” leaks was, however, less clear.

As expected, such efforts at damage control had a very limited effect. The harm perpetrated by US-led spying on the trust, goodwill and relations with Europe was far more serious, and remains a main feature in the foreground.

In Latin America “south of the border”, Brazil, Colombia, Mexico and Venezuela are particularly disturbed by US-led spying activities. Argentina, Bolivia, Chile, Ecuador, Nicaragua, Paraguay and Uruguay are also concerned.

Several of these countries have already offered asylum to Snowden, who hopes to avoid prosecution in the US after his current one-year asylum stay in Russia. The more Washington pressures and threatens these countries, the more keen they are to protect whistleblowers like Snowden.

The Union of South American Nations (Unasur) is currently working on a new, alternative communications system that will cut the prospect of US spying in the region. As a sign of seriousness, the region’s defence ministers who form Unasur’s defence council are tasked with developing the new system.

Unasur’s 12 member countries may be disadvantaged in lacking sophisticated technological inputs for the system. However, they also enjoy certain advantages in a renewed unity, determination and strength of purpose.

Brazilian President Dilma Rousseff, whose email had been hacked by US spies, has accused Washington of violating human rights and crime. Four days ago, she followed this with a defence procurement contract that spelt out clearly where Brazil stood.

Capping a 10-year plan, Rousseff announced on Wednesday that Brazil would buy 36 of Sweden’s Saab Gripen fighter jets instead of Boeing’s F/A-18s in replacing the air force’s ageing fleet. Brazil had bargained the price down from US$6bil (RM19.8bil) to US$4.5bil (RM14.8bil).

US officials privately grumbled over having lost “a US$4bil deal” but in fact the cost of NSA spying on Brazil is almost twice that. Boeing’s price for the F/A-18s was US$7.5bil (RM24.7bil).

Over the longer term, the cost to the US economy is likely to grow if Washington does not or cannot seriously mend its ways. US-based companies like Google, Yahoo! and Microsoft are often seen by other countries as part of the problem in having to comply with US laws and demands.

Unasur is already showing the way forward by working on an alternative. In time, other regions like Europe and countries such as Russia, India and China may also develop their own communications systems and software, taking more business away from US companies.

In the short term it is always tempting to blame the messenger such as Edward Snowden rather than the problematic nature of the message itself. Ironically, the development of modern communications has raised awareness of privacy and sovereignty rights – and of their violations.

To level the playing field, IT development as well as spying activities may need to become more equalised. By serving the greater interests of the greater number, that would be democratisation indeed.

Contributed by Bunn Nagara, who is a Senior Fellow at the Institute of Strategic and International Studies (ISIS) Malaysia, The Star/Asia News Network

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2013 the year of Internet innovation

A man uses his smartphone to take a picture of a person wearing a mask of former U.S. spy agency contractor Edward Snowden during a protest in Berlin, July 4, 2013.

As the year comes to a close, we need to reflect on what are the most important things that have affected our lives in 2013.

The Internet continues to transform our world. The most significant Internet event in 2013 was not the listing of Facebook, which priced the company at $104 billion (almost Bt3.4 trillion), but Edward Snowden's July revelations of Internet surveillance, which revealed that Big Brother, friend or foe, is really watching. Since my smartphone is smart enough to track me even in the toilet, there is really no privacy left in this world.

On the plus side, Singles Day - November 11 - garnered 35 billion yuan (Bt187 billion) in online sales on one day in China. Since China already accounts for one-third of the smartphones in the world, and they can make and sell smartphones at one-third the price of Apple or Samsung, it is not surprising that e-commerce in the Middle Kingdom is set to overtake even the US in volume next year.

Online business is here to stay.

What the combination of the Internet and smartphone means is that a person in the remotest part of Indonesia can sell his or her product to buyers worldwide, and collect over the smartphone, which was impossible to imagine even 20 years ago.

Amazing also are the apps downloaded in their millions to maximise personal efficiency. Ease of personal communication, meanwhile, has been taken to a new level with apps like WeChat. Such free Internet services are rising so fast that even revenue from SMS text messages is slowing down.

On the other side, after Snowden, what must consider the proper role of the government in the Internet and how it should behave to encourage Web innovation and growth?

Nobel Laureate economist Joseph Stiglitz was one of the first to tackle the subject, in "The Role of Government in a Digital Age" (2000), with Peter and Jonathan Orzag. Their report recommended 12 principles. The first three cover the state's proper role in the affairs of the Internet:

1. Provide public data and information.

2. Improve efficient government services.

3. Support basic research.

The next six principles are areas where the government should exercise caution. These include:

4. Adding specialised value to public data and information.

5. Providing private goods only under limited circumstances.

6. Providing services online where private services are more efficient.

7. Ensuring that mechanisms exist to protect privacy, security, and consumer protection online.

8. Promoting network externalities only with great deliberation and care.

9. Maintaining proprietary information or exercising rights under patents or copyright.

The report also signalled "red light" areas of state intervention in the Internet:

10. Governments should exercise substantial caution in entering markets in which private sector firms are active

11. Governments (including government corporations) should generally not aim to maximise net revenues or take action that would reduce competition.

12. Government should only be allowed to provide goods or services for which appropriate privacy and conflict-of-interest protections have been erected.

The Stiglitz-Orzag report was written for the US market, but the general principles are useful guides for all states. The trouble is that Snowden showed that the US government might have failed to follow some of these guidelines. We do know that governments are becoming increasingly intrusive on the Internet, and that such intrusion inhibits competition and innovation.

Because the Internet is evolving very fast, the role of government in Web affairs also needs to evolve. Businesses are becoming even more service and information-oriented, with increasing numbers going digital and in the "Cloud". This means that governments are struggling with three major issues: protecting private privacy, ensuring a level playing field in competition, and taxing online activities.

Governments must also sort out jurisdictional duties and powers, because the Cloud is global, and taxation and regulation is not only national, but departmental. It is as if each small part of the bureaucracy is trying to regulate the whole Cloud. We can all touch and feel its power, but there is no overall central authority that can control the Cloud.

An island nation in the Pacific might pass a law on the Cloud, but could it enforce it?

Individual privacy is being threatened by the practice of hacking, and the biggest hackers are not bedroom-bound nerds, but governments everywhere.

The second problem of a level playing field is a serious one. If Google has maps and can monitor everything I do through my smartphone, does that information belong to Google or to me? If it belongs to the large platforms, does that not confer a huge informational advantage on them? How can governments ensure that there is a level playing field between these massive online platforms and the small businesses that have no such information or may have to pay the platform for it?

The third area is taxation. Online commerce has escaped the tax radar because it is new. In contrast, bricks-and-mortar shops have rents, create jobs and pay value-added taxes. If everything moves online, the government loses the ability to tax, and bricks-and-mortar retail shops will complain they are losing out to larger and larger platforms. Bookshops around the world are closing in droves now that everyone can order through Amazon.

There are no easy answers to these tough questions. The interdependent and interconnected nature of the Internet means that regulatory or government action in one part may affect the system as a whole. In other words, government action or non-action creates a shadow system - the business moves offline, offshore or into cyberspace.

What we need is better transparency, better education, wider access and also some key principles of fair competition that should be enforced for online business to innovate.

Finally, a year-end reminder: use your smartphone in the toilet, and someone (not Snowden) can hear you flush. Merry Xmas and Happy New Year to all.

Contributed by Andrew Sheng, President of the Fung Global Institute.

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