When Giants Fail


May 8, 2017

When Giants Fail

What business has learned from Clayton Christensen.

The Coming Technology Policy Debate


May 7, 2017

What is really needed are new and improved institutions, policies, and cooperation between law enforcement and private firms, as well as among governments. Such efforts must not just react to developments, but also anticipate them. Only then can we mitigate future risks, while continuing to tap new technologies’ potential to improve people’s lives.–Michael J. Boskin

The Coming Technology Policy Debate

by Michael J. Boskin@www.project-syndicate.com

*Professor of Economics at Stanford University and Senior Fellow at the Hoover Institution. He was Chairman of George H. W. Bush’s Council of Economic Advisers from 1989 to 1993, and headed the so-called Boskin Commission, a congressional advisory body that highlighted errors in official US inflation estimates.

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What do the leaks of unflattering email from the Democratic National Committee’s hacked servers during the 2016 US presidential election campaign and the deafening hour-long emergency-warning siren in Dallas, Texas, have in common? It’s the same thing that links the North Korean nuclear threat and terrorist attacks in Europe and the United States: all represent the downsides of tremendously beneficial technologies – risks that increasingly demand a robust policy response.

 

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It is the Fourth Revolution–The Only Certainty is Change

The growing contentiousness of technology is exemplified in debates over so-called net neutrality and disputes between Apple and the FBI over unlocking suspected terrorists’ iPhones. This is hardly surprising: as technology has become increasingly consequential – affecting everything from our security (nuclear weapons and cyberwar) to our jobs (labor-market disruptions from advanced software and robotics) – its impact has been good, bad, and potentially ugly.

First, the good. Technology has eliminated diseases like smallpox and has all but eradicated other, like polio; enabled space exploration; sped up transportation; and opened new vistas of opportunity for finance, entertainment, and much else. Cellular telephony alone has freed the vast majority of the world’s population from communication constraints.

Technical advances have also increased economic productivity. The invention of crop rotation and mechanized equipment dramatically increased agricultural productivity and enabled human civilization to shift from farms to cities. As recently as 1900, one-third of Americans lived on farms; today, that figure is just 2%.

Similarly, electrification, automation, software, and, most recently, robotics have all brought major gains in manufacturing productivity. My colleague Larry Lau and I estimate that technical change is responsible for roughly half the economic growth of the G7 economies in recent decades.

Pessimists worry that the productivity-enhancing benefits of technology are waning and unlikely to rebound. They claim that technologies like Internet search and social networking cannot improve productivity to the same extent that electrification and the rise of the automobile did.

Optimists, by contrast, believe that advances like Big Data, nanotechnology, and artificial intelligence herald a new era of technology-driven improvements. While it is impossible to predict the next “killer app” arising from these technologies, that is no reason, they argue, to assume there isn’t one. After all, important technologies sometimes derive their main commercial value from uses quite different from those the inventor had in mind.

Optimists, by contrast, believe that advances like Big Data, nanotechnology, and artificial intelligence herald a new era of technology-driven improvements. While it is impossible to predict the next “killer app” arising from these technologies, that is no reason, they argue, to assume there isn’t one. After all, important technologies sometimes derive their main commercial value from uses quite different from those the inventor had in mind.

For example, James Watt’s steam engine was created to pump water out of coal mines, not to power railroads or ships. Likewise, Guglielmo Marconi’s work on long-distance radio transmission was intended simply to create competition for the telegraph; Marconi never envisioned broadcast radio stations or modern wireless communication.

But technological change has also spurred considerable dislocation, harming many along the way. In the early nineteenth century, fear of such dislocation drove textile workers in Yorkshire and Lancashire – the “Luddites” – to smash new machines like automated looms and knitting frames.

The dislocation of workers continues today, with robotics displacing some manufacturing jobs in the more advanced economies. Many fear that artificial intelligence will bring further dislocation, though the situation may not be as dire as some expect. In the 1960s and early 1970s, many believed that computers and automation would lead to widespread structural unemployment. That never happened, because new kinds of jobs emerged to offset what dislocation occurred.

In any case, job displacement is not the only negative side effect of new technology. The automobile has greatly advanced mobility, but at the cost of unhealthy air pollution. Cable TV, the Internet, and social media have given people unprecedented power over the information they share and receive; but they have also contributed to the balkanization of information and social interaction, with people choosing sources and networks that reinforce their own biases.

Modern information technology, moreover, tends to be dominated by just a few firms: Google, for example, is literally synonymous with Internet search. Historically, such a concentration of economic power has been met with pushback, rooted in fears of monopoly. And, indeed, such firms are beginning to face scrutiny from antitrust officials, especially in Europe. Whether consumers’ generally tolerant attitudes toward these companies will be sufficient to offset historic concerns over size and abuse of market power remains to be seen.

But the downsides of technology have become far darker, with the enemies of a free society able to communicate, plan, and conduct destructive acts more easily. The Islamic State and al-Qaeda recruit online and provide virtual guidance on wreaking havoc; often, such groups do not even have to communicate directly with individuals to “inspire” them to perpetrate a terrorist attack. And, of course, nuclear technology provides not only emissions-free electricity, but also massively destructive weapons.

All of these threats and consequences demand clear policy responses that look not just to the past and present, but also to the future. Too often, governments become entangled in narrow and immediate disputes, like that between the FBI and Apple, and lose sight of future risks and challenges. That can create space for something really ugly to occur, such as, say, a cyber attack that knocks out an electrical grid. Beyond the immediate consequences, such an incident could spur citizens to demand excessively stringent curbs on technology, risking freedom and prosperity in the quest for security.

What is really needed are new and improved institutions, policies, and cooperation between law enforcement and private firms, as well as among governments. Such efforts must not just react to developments, but also anticipate them. Only then can we mitigate future risks, while continuing to tap new technologies’ potential to improve people’s lives.

Hong Kong: Coming soon, One Country, One System


May 6, 2017

Hong Kong: Coming soon, One Country, One System

by Asiasentinel.com

http://www.asiasentinel.com/politics/china-hong-kong-one-country-one-system/

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Carrie Lam (pic center),Hong Kong’s future Chief Executive

Despite strong official backing by Beijing, Hong Kong’s future Chief Executive, Carrie Lam Yuet-ngor, promised to heal the divisions in society. Yet in the run up to her installation on July 1, it appears increasingly that the healing of divisions is going to be accomplished by silencing one half of that divide. Actions and words in recent days have shown the current Chief Executive CY Leung bent on vengeance, and a central government bent on squeezing the life out of the Two Systems concept.

Quite what Lam feels about these moves is unclear, but they have raised concerns in many traditional pro-government circles as well as among the direct target, the advocates of more democracy and the autonomy promised in the Basic Law and Joint Declaration.

Not content with using legal procedures to have two young elected pro-democracy legislators disbarred from office, the authorities had them arrested for “unlawful assembly”  and “attempted forced entry” for trying to attend a Legislative Council meeting. The government then followed this up with the arrest of nine other activists from the pro-democracy faction who took part in a Nov. 6 demonstration against the court decision to ban the two elected legislators. The nine are charged with “unlawful assembly” for taking an unauthorized route during a march to the Liaison Office, Beijing’s power center in Hong Kong.

These charges come in the wake of 18 previous ones against activists, some dating back to the 2014 Umbrella movement, and it is widely believed that more such charges are in the works to cripple the pro-democracy movement and further reduce its numbers in the Legislative Council, thus using loosely framed laws to counter its stunning success in elections last September.

Four other lawmakers face disbarment on the basis of being in conflict with a November 2016 decision by Beijing’s National People’s Congress. If these cases succeed, the ranks of elected legislators would be again thinned, giving the government complete control of a Legislative Council half of whose members are chosen mostly by small, pro-government electorates. Hong Kong’s political system would have no more credibility than that of the military junta in Thailand.

Just possibly, harsh measures by the outgoing and highly unpopular Leung are a deliberate ploy to enable Lam to start her rule with some concessions, such as a general amnesty for those – including policemen – involved in legal actions related to Umbrella and related demonstrations. But that is probably over-optimistic. An autocratic Xi Jinping appears in no mood for compromises with insubordinate Hong Kong residents, of whom there are many.

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Hong Kong Skyline Digital Art – Hong Kong Skyline Fine Art Print

Adding further to Hong Kong concerns was a speech by a legal advisor to Beijing’s Liaison Office, Wang Zhenmin, which threatened the end of  the domestic autonomy promised under Two Systems if it was perceived to undermine the interests of One Country. Wang suggested that separatist sentiment in Hong Kong has damaged national security and that the territory “needs to actively defend the sovereignty, national security and development interests of the country in accordance with law.”

Wang seems deliberately to exaggerate the extent of separatist sentiment in the territory, confusing demands for genuine autonomy with ones for independence, an entirely impractical proposition supported only by a few naïve youngsters. The “independence” canard and the priority to One Country have thus become sticks to beat those wanting the sustain genuine autonomy and the freedoms of speech and publication which Hong Kong enjoys. Soon it may be impossible to have open debate on issues such as the status of Taiwan, Xinjiang, Tibet or the South China Sea.

What Beijing consistently declines to recognize is that the Umbrella movement itself, and the anti-government vote in the 2016 elections, was a direct response to Beijing’s earlier interference quashing efforts to extend representative government.

The implication that Hong Kong may be a threat to national security has to be seen in the context of China’s National Security law. This is so broadly drafted that it can be used against almost any criticism of the Communist party and its leadership and policies.  For instance, Article 15 reads:

“The State persists in the leadership of the Chinese Communist Party, maintaining the socialist system with Chinese characteristics, developing socialist democratic politics, completing socialist rule of law, strengthening mechanisms for restraint and oversight of the operation of power, and ensuring all rights of the people as the masters of the nation, and strengthening restraint and oversight mechanisms on the operation of power.

“The State guards against, stops, and lawfully punishes acts of treason, division of the nation, incitement of rebellion, subversion or instigation of subversion of the people’s democratic dictatorship regime; guards against, stops, and lawfully punishes the theft or leaking of state secrets and other conduct endangering national security; and guards against, stops, and lawfully punishes acts of infiltration, destruction, subversion or separatism by foreign influences and other conduct endangering national security; and guards against, stops, and lawfully punishes acts of infiltration, destruction, subversion or separatism by foreign influences.

“The State persists in the leadership of the Chinese Communist Party, maintaining the socialist system with Chinese characteristics, developing socialist democratic politics, completing socialist rule of law, strengthening mechanisms for restraint and oversight of the operation of power, and ensuring all rights of the people as the masters of the nation, and strengthening restraint and oversight mechanisms on the operation of power.”

Wang’s speech elicited a quick rebuke from a former leader of the pro-business and generally pro-government Liberal party Allen Lee Peng-fei. “What authority does he have to speak to Hong Kong people?” and to lay down his view about constitutional reform, a matter for the territory itself. Lee is long retired so has little to lose from speaking up, but his views reflected those of many fearful of expressing views for fear of retribution in one form or another.

In particular, Hong Kongers increasingly resent the overt interference of the Liaison Office which is supposed to keep Beijing informed of Hongkong peoples’ views, not act as the hand guiding a puppet regime.

Such levels of interference and the constant talk of “national security” are worrying traditionally conservative groups such as lawyers and accountants, and those want to see Hong Kong remain attractive to open minds and free expression, essential if its future is to be more than just one of several large cities on the south China coast.

As it is, the territory is spending large sums to celebrate the 20th anniversary of return to Chinese sovereignty. President Xi will be on hand as Lam takes over. But for many in Hong Kong there is a diminishing cause for celebration as the demand for One Country, as ruled by the party, dominates discourse, and the related concept of “Hong Kong People Ruling Hong Kong” is constantly undermined by Beijing’s spokesmen and their army of parrots in the local media. Doubly worrying, it comes at a time when President Xi is bent on reducing or eliminating foreign influence in social, political and cultural domains. Hong Kong is by this measure a gateway for undesirable ideas. For sure, closing the windows will keep out foreign flies, but so are fresh air and fresh ideas. Deng Xiaoping must be turning in his grave.

 

ASEAN at 50: Challenges and Opportunities for Cambodia


April 18, 2017

ASEAN at 50: Challenges and Opportunities for Cambodia

by Kimkong Heng

http://ippreview.com/index.php/Blog/single/id/406.html

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In August 2017, ASEAN (the Association of Southeast Asian Nations) will be 50 years old. ASEAN was established on August 8, 1967 in Bangkok by the five founding member countries, namely Indonesia, Malaysia, the Philippines, Singapore, and Thailand. The major aims for the birth of ASEAN were to encourage economic cooperation, promote regional peace and stability, and create platforms for mutual assistance and collaboration in economic, social, cultural, technical, educational and administrative areas. The concepts of non-interference in one another’s internal affairs, and the peaceful settlement of interstate disputes are, among others, the fundamental principles to which ASEAN tries to adhere.

Throughout these 50 years, ASEAN has both faced challenges and at the same time enjoyed prosperity as it weathered many storms in its own region, the larger Asia-Pacific region, and the global arena. Cambodia, which will celebrate her eighteen years in ASEAN late this April, has had to confront the challenges and seize the available opportunities this regional group has had to offer. To informally commemorate the 50th anniversary of ASEAN and to toast Cambodia’s 18th birthday in ASEAN, this article will examine the potential challenges and opportunities Cambodia, a small state and the youngest ASEAN member, has experienced and will likely experience in the immediate and distant future.

Fifteen years ago, a Cambodian scholar predicted that Cambodia would face three categories of challenges while it was trying to secure its place in the regional association. In the short-term, during its preparation for ASEAN membership, Cambodia would face many obstacles including its lack of human and financial resources, poor legal framework, and weak institutional organization. In the medium- to long-term, Cambodia would have to address economic, diplomatic, and financial challenges, as well as tackle challenges related to national prestige, borders, sovereignty, legal and institutional framework reform, and lack of strategic thinking.

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Cambodia at Sunrise–Calm, Serene and Captivating

Over a decade later, many ASEAN observers and commentators also saw challenges which lay ahead for Cambodia as she prepared to join the ASEAN Economic Community (AEC). Sowath Rana and Alexandre Ardichvili, for example, listed six main human resource development (HRD) challenges Cambodia would face as it joined the AEC in 2015, including the education and employment mismatch, higher education challenges, technical and vocational education and training challenges, HRD challenges in the private sector, limited awareness and engagement in ASEAN and AEC processes, and technology infrastructure challenges.

Amongst all the challenges, however, this article argues that the strategic challenge — mediating ASEAN and China over the South China Sea issue — is Cambodia’s greatest challenge at present. Cambodia has been criticised twice for her decision to ally herself with China and block ASEAN from issuing joint communiqués which criticize China for her assertiveness and expansionist policy in the South China Sea. With the South China Sea dispute still on the horizon, Cambodia is likely to face this strategic challenge again because this small state cannot afford to lose China for ASEAN or vice versa.

Cambodia has taken advantage of her ASEAN membership to salvage her once non-existent relations with ASEAN member states and ASEAN Dialogue Partners.

Although Cambodia is not one of the claimant states involved in the South China Sea conflict, her membership in ASEAN puts her in a difficult position to help settle the disagreement between her ASEAN counterparts and her closet ally, China. Thus, it is a big challenge for Cambodia to strike a good balance in her endeavors to help mediate between the conflicting parties. As China is described and seen as Cambodia’s most trustworthy friend and largest provider of aid, loans, and grants, the possibility of seeing Cambodia jump on China’s bandwagon could not be higher.

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GDP Real Growth in Excess of 7.5 per cent p.a over the last 2 decades

Furthermore, to expect Cambodia to act against her own national interests in order to preserve ASEAN’s centrality is highly unlikely to happen, even though ASEAN remains the cornerstone of Cambodia’s foreign policy. In this regard, the next chapter of Cambodia’s foreign policy will definitely play out in favor of China despite peer pressure from the ASEAN states.

Opportunities for Cambodia

Despite these many challenges, there are enormous opportunities for Cambodia as an ASEAN member. From economic to social advantages, and from diplomatic to strategic benefits, Cambodia has enjoyed and will continue to enjoy tremendous opportunities as the country strives to keep up with its more developed ASEAN friends and exert its influence on the region.

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Angkor Wat in Siem Reap–Steadfast, Dependable and True Symbol of an Emerging Cambodia

Economically, Cambodia has greatly benefited from ASEAN as it joined the ASEAN Free Trade Area in 1999 and the World Trade Organization in 2004. It has also attracted foreign direct investment from ASEAN member states, particularly Thailand and Vietnam. While Thailand and Cambodia have agreed to strengthen cooperation in bilateral trade and investment, the two-way trade volume between Vietnam and Cambodia, according to Khmer Times, reached USD 3.37 billion in 2015 and USD 2.38 billion in 2016. These figures, however, were below the 2015 target of USD 5 billion both countries have pledged.

In terms of social prospects, Cambodia’s ASEAN membership has helped to increase opportunities for Cambodians through the mobility scheme for skilled labor, improved access to cheaper and a wider range of imported goods and services, and improved education and health services in the Kingdom. More importantly, by joining the ASEAN and later the AEC, people-to-people connectivity between Cambodia and the other ASEAN members has increased.

As for the diplomatic gains, Cambodia has taken advantage of her ASEAN membership to salvage her once non-existent relations with ASEAN member states and ASEAN Dialogue Partners, particularly Australia, China, Japan, and the United States. Until more recently, Cambodia’s foreign policy has significantly been strengthened and Cambodia has put in a great deal of effort to upgrade its diplomatic relations with its nearest neighbors, ASEAN members, and regional and global powers.

Noticeably, Cambodia-Russia bilateral relations have recently been restored and strengthened, with exchanges of high-level visits and greater mutual support and cooperation between the two countries. Likewise, Cambodia-China bilateral relations have reached a new historic high, with Xi Jinping’s first presidential visit to Cambodia last year, immediately following Cambodia’s refusal to partake in an ASEAN joint communiqué critical of China’s claims and policies in the disputed territory in the South China Sea.

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Phnom Penh –The Pulse of The Kingdom of Cambodia

Strategically, Cambodia’s geopolitical location and ASEAN status, together with current political developments in the region, have granted this small state a special privilege to assert its influence and exercise its power in the regional group and the wider Asia-Pacific region. If Cambodia were not an ASEAN member, she would have found it hard to capture Chinese attention and enjoy China’s financial aid — with its controversial no-strings-attached policy — arising from Cambodia’s intervention in the territorial dispute over the South China Sea.

Thus, in spite of the great challenges, Cambodia seems to be able to grasp considerable opportunities along its zigzag ASEAN path. In this respect, it might not be wise to weigh the challenges against the opportunities for Cambodia because it has been a mixed blessing for the country. It would be best, nevertheless, for Cambodia to continue to engage with countries in the region and regional initiatives like the Greater Mekong Subregion and ASEAN, or else it will run the risk of becoming too dependent on China.

Kimkong Heng is an Assistant Dean, School of Graduate Studies and a doctoral candidate in International Relations, Techo Sen School of Government and International Relations, The University of Cambodia, Phnom Penh, Cambodia.

Big Challenge for Asian Modernization


March 30, 2017

Cultural-Intellectual Reinvigoration: Big Challenge for Asian Modernization

by Michael Heng Siam-Heng (received by e-mail with thanks)

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Asia has been experiencing an economic revival since the 1960s, first Japan, then the Four Little Dragons, the Asian Tigers and now China and India. With Asian economies doing relatively well against the background of global recession, many Asians hope that the 21st century would be the Asian Century. But what kind of Asian Century?

How would Asians like this period of their history to be understood and remembered in centuries ahead?  It could be a period of impressive economic growth but also known for its environmental degradation, crimes, corruption, social disparities, religious extremism, and social conflicts. Or it could be a period that draws on the best of human achievements and advances them.  The second case would contribute immensely to a new global civilization characterized by peace, social justice, cultural brilliance, technological advancement, and sustainable economic growth.

I will dwell on four points.  First, on what basis can we argue for an Asian cultural-intellectual rejuvenation? Second, is such a historical project necessary? Third, three challenges facing us. Fourth, being in Malaysia, I will briefly touch on roles that can be played by this country.

Conceptual Basis for an Asian Cultural Rejuvenation

History tells us that radical economic and social transformations are often accompanied by intellectual ferment and cultural effervescence. The transformations generate social dislocations that challenge existing cultural norms, ideas, and social institutions.  The problems are serious and they engage the best brains of the time. In attempts to solve the issues, these best and brightest draw on their intellectual heritage, learn from other sources, cross-fertilise them and creatively synthesize them to produce original thoughts.

Examples are Ancient Greece, the Spring-Autumn-Warring period of China, the Islamic golden age, and the Maurya and the Gupta period of India. The most recent experience is the European Renaissance and Enlightenment, which produced giants in the fields of philosophy, natural sciences, social sciences, fine arts, music, architecture, and literature. We all know at least a dozen of such names.  These European thinkers or cultural giants acted as a positive force during that critical period, functioning both as a social conscience and as sources of forward-looking ideas. Their works have shaped the character of modern European civilization and continue to exert an influence on our thinking and cultures even until today.

The Need for the Historical Project

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Deng Xiao Peng–China’s Great Modernizer–Pragmatist

Ever since Asia suffered defeat and humiliation in its encounters with Western imperial powers, Asian leaders slowly realized the crucial importance of reform and modernization in order to face the onslaught. Country after country began to borrow ideas from the West, not all of which were positive, as we see in the case of Japanese imperialistic aggression.

By the end of the 19th century, Japan, through its  Meiji Restoration (明治維新), was the most successful in modernizing its military and economy, fulfilling its national agenda of being both powerful and wealthy. Once powerful, Japan began to behave aggressively, turning Korea into its colony, seizing large tracts of Chinese territories and occupying Southeast Asia. It was a military adventure which ended in total defeat at the closure of WWII.  To use a  simple metaphor, modernization is like the flight of a bird.  It requires two wings to function in a harmonious manner.  Being wealthy economically and strong militarily is one wing.  The other wing is sound cultural-intellectual development.

Fast forward into early 21st century, Asia has regained much of its share of global economy.  Statistics provided by the IMF, the World Bank and transnational banks testify to this shift of economic power from the West.

To the ordinary public, this shift is visible, in the form of improved standards of living, and the new physical landscape.  The most visible is the super-tall buildings – architectural icons of modernity.  Of the ten tallest buildings in the world, 8 are in Asia, 2 in the USA.

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In contrast to the modern landscape in Asian cities, Asia has a string of disturbing social ills.  There is dysfunctional culture exhibited by the people at the top running the show.  State infrastructure projects are awarded to friends and relatives rather than to the most competent.  Newspapers are full of examples of practices that reflect mindsets that are out of sync with the demands of a modern economy. In societies where there are modern economic and legal institutions, many of these institutions lack integrity and independence.

Even in a modern economy and society operating efficiently, we need something more.  Again using the example of Japan.  It is the most modern Asian country. Yet its modernization is confined to the fields of economy, technology, and life styles. It has not undergone a philosophical development based on a foundation of critical rationality and humanism. The Japanese nation as whole has not been able to come to terms with its atrocities during World War II.

 Three Major Challenges

Asians face three major challenges at this juncture of their history, namely (a) drawing on their own cultural resources and rejuvenating them, (b) learning from others, and (c) learning from each other.

The first challenge can be formulated as: how and what Asians can draw from their own cultural and intellectual resources in the process of dealing with new problems.

With an open and inquisitive mind, old ideas take on new meanings and interpretations in the context of new social problems. If a new interpretation provides an effective way in solving problems, the new solution is likely to find easier acceptance because it is framed in language familiar to the people. A sense of continuity is useful in coping with change.

Interestingly, there is often a link between the old and the new. Even a new philosophy is dependent on the intellectual achievements of the preceding centuries and millennia.  A scholar of the European Enlightenment observes that “enlightenment philosophy simply fell heir to the heritage of those [preceding] centuries. It ordered, sifted, developed and clarified this heritage rather than contributed and gave currency to new and original ideas.  Yet in spite of its dependence with respect to content, the Enlightenment produced a completely original form of philosophical thought.”  In other words, old beliefs can put on modern attires and assume modern colours. The result is a new idea.

This sounds rather straightforward. But it is not so if we observe carefully around us.  Hardcore conservatives prefer a literal and rigid interpretation of their traditions, all the more so if these are written. There is also the fear that in rejuvenating local culture and tradition to cope with the demands of a modern economy, the local culture and tradition may disappear, and that future generations will become culturally rootless.  Another problem is what to select from the past.

I believe that the proper attitude is to embrace change, and to see culture as something living, tradition as living tradition.  They are products of their times, and they will change with the demands of the time.

The second challenge is how and what to learn from others. To the extent that there are similarities in the issues involved in the transition from pre-modern societies to modern societies, we should learn from others’ experiences, both positive and negative. To quote the Indian philosopher Sarvepalli Radhakrishnan : “Similar experiences engender in men’s minds similar views”. Since the West has a longer history of modernization, Asia can certainly learn from them.

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Again like the first challenge, learning from others is not easy. Some believe that it is very difficult, or even impossible, to transplant ideas, values, and institutions that have sprouted and developed in a different culture and a different set of historical conditions.

Take the case of China’s difficult journey of learning after defeat at the hands of Japan in 1895. While the Chinese leadership welcomed the adoption of obviously more advanced technologies from the West, they had difficulties embracing the Western ideas and value system. The problem is less acute today but is not over.

What happened in China a century ago is happening in West Asia. The common belief was that “Eastern” culture of spirituality was superior to “Western” culture of materialism.  There is a fear that the spirit of local heritage and culture was threatened with destruction by the importation of western ideas and values.

Adoption and adaption of foreign ideas to local conditions is a long drawn out process, which requires creativity, flexibility, and openness. Though the process is complex, it has happened in history, in Southeast Asia, elsewhere in Asia, and Europe.

Evidence in history support the claim that we can borrow ideas that originated in a very different historical context, and adapt them to serve local needs or even improve upon them in the process of creative synthesis. Let me list briefly three examples. First example: Southeast Asia was able to adopt religious beliefs, ways of life, and institutions from India, China, the Middle East, and Europe. These influences from distant lands had originated in settings that were alien to Southeast Asia. Second example is Europe’s absorption of bureaucracy from China. Combining it with check and balance by civic society, the Western practice is more efficient and less prone to corruption, offering useful lessons for China. This is a vivid illustration of the Chinese saying, 青出于蓝而胜于蓝, or the pupil excelling the master. Third example: Buddhism was introduced to China, a country with a profoundly different culture. After centuries of acclimatization, we have a synthesis of the two cultural traditions known as “Chan” in Chinese and “Zen” in Japanese.

The sensible attitude of learning is to be open-minded and rational rather than be influenced by emotion and sentiments. We must be curious and humble while at the same be meticulous, critical and independent minded. Just as Asians should not feel a sense of superiority in being a source of Western modernization, they should not feel a sense of inferiority in borrowing from the West.  Learning from the findings of others can only increase the range of possible solutions.

The above two challenges are related. It is difficult to learn from foreign sources and adopt their useful elements if we are not culturally and intellectually confident. With confidence in our own cultural heritage, we are at ease to critically appreciate the achievements of others. And cultural confidence can only stem from a deep and critical understanding of our own cultural roots, to the extent of discarding outdated ideas and practices of our own traditions.

he third challenge is for Asians to know much more of each other’s history, intellectual achievements, and cultural traditions.  Though language may present a barrier, most Asian intellectuals use English as the second language which renders exchange of ideas possible. What holds them back is their attitude.  Asians tend to know more about Australasia, Europe and America than their Asian neighbours.  

Given the guarded attitude many Asians have regarding learning from the West, they have less misgivings regarding learning from each other. They can benefit from sharing their experiences in modernization.  In fact, Japan’s path of rapid economic development has provided valuable insights to Southeast Asia and later on China and India. This pattern of economic development is described as the Flying Geese, with Japan as the leading goose. In coping with the broader social and cultural issues arising from modernization, the Middle Eastern countries are more likely to consult the experiences of Malaysia and Indonesia than those from the West.

As a concrete project of mutual learning and co-operation among Asian countries, they can compile a set of books – the Great Books of the East, containing the cream of Eastern intellectual achievements. It is a doable project.  It serves as a platform for top scholars of Asian countries to work together, creating as a byproduct a network Asian intellectuals of similar interests.  It would produce a convenient reference work for libraries all over the world.  It world form a key component of common body of knowledge for serious minded global citizens.

Another concrete project is traditional medicine.  Asia is the home of traditional Chinese medicine, traditional Indian medicine, and traditional Middle Eastern medicine. It represents distilled knowledge accumulated over many centuries of medical practice, often under poor material conditions. It is thus evidence-based.  However, critics of traditional medicine often claim that it is not scientific because its research method departs from that of western medicine. Its theory needs a modern set of vocabulary and updated to take into account new medical findings. We can think of a productive sharing and conversation among the three streams of Asian traditional medicine. This is an area for active collaboration of Asian countries that can boost the cultural and intellectual confidence of Asia, while making concrete and valuable contributions to healthcare in the whole world.

Malaysia as the Italy of the Asian Mediterranean(Venice)

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Malaysia is unwilling to tap its rich diversity due to myopic Malay-centered leadership and  corruption–Bodoh Sombong

Cultural and intellectual rejuvenation is often a synthesis and product of the cross-fertilization of cultures and ideas.  Its birthplace is located at the cross-roads of diverse cultures and intellectual currents. For example, Italy, widely regarded as the birthplace of the European Renaissance, was an important meeting point of different cultures and intellectual traditions in the Mediterranean.

Malaysia can have an important role in such a historical process. Here, the four major currents of world civilizations (Chinese, Indian, Islamic and Western) are co-existing as mainstreams of social life. They represent invaluable resources. Southeast Asia is a region with a multi-layered sedimentation of diverse cultures. It is a vibrant, peaceful and forward-looking region when we compare it to other regions with similar historical background. If we borrow the language of the European Renaissance, Southeast Asia may be seen as a kind of Mediterranean region in the cultural revival of Asia and Malaysia can aspire to be the Italy of Asia (Venice).

Reinventing prevalent social-cultural practices is quite common in societies undergoing structural changes.  It is part of the efforts of a society to refine and refurbish the inner resources of their societies. It is through such processes of renewal that societies try to overcome internal stagnation and meet external challenges.

The process touches societies profoundly, involving ideas, values, morality, belief systems, culture, and institutions. It requires us to revisit our concepts of goodness, truth, and beauty.  The blossoming of culture represents the sublimation of the human spirit, the enrichment of human experience and the nurturing of human nature towards goodness. It is a project with both social and spiritual dimensions. It is a project with a historical soul.

Economic resurgence in itself does not guarantee a corresponding intellectual ferment and cultural effervescence. There are formidable obstacles in the long journey. First, Asian intellectuals may not rise to the call. Second, there is lack of freedom and internalized self-censorship that originates from a culture of fear. Third, there is no critical mass of thinkers to stimulate each other. Fourth, there are as yet no powerful social groups willing to adopt and champion new philosophies developed by their people.

The rise of Asia may thus be conceived of as an opportunity for an Asian cultural revival, which may or may not happen. Much depends on how Asians will make use of the opportunity. Will they translate the opportunity into a mission, and turn it into a reality?

The project of an Asian cultural rejuvenation is an ambitious undertaking.  It is likely to last for several generations. It has no walls and borders. Contributions from all corners of the world are warmly welcome. Though the stage is in Asia, the cast and audience are global.   This opens up a new arena of international cooperation for all those who aspire to contribute to the long term well-being of humanity.  As co-operation and competition with the West can be expanded to include friendly co-operation and competition in the field of ideas, this new arena could well be an alternative to the geopolitical rivalry between an emerging China and a US in decline.

Let us imagine that East Asia or South Asia could provide a case of cultural revival together with economic modernization.  It would be an attractive alternative to the current Western model for the Middle East. It may offer new insights and solutions for solving the whole array of social, economic and political problems there.

If and when Asian cultural and intellectual reinvigoration does happen in its full glory, it will lift Asian civilization to a higher level. In so doing, it will contribute to the cultural resources of the world and indeed to a richer modern civilization.  It will also impart a more profound and enduring meaning to the term Asian Century.

This is the text of the author’s public lecture delivered at the Sungei Long Campus of Universiti Tunku Abdul Rahman on  March 17, 2017.

Playing Malaysia’s Number Game


March 13, 2017

Manjit Bhatia’s article’s article is on my blog.

https://dinmerican.wordpress.com/2017/03/08/najibs-criminal-state-of-mind/

Image result for Najib Razak and the Malaysian economyThe Malaysian Treasury is all but full

What follows is my friend Nurhisham Hussein’s response.

My own reaction is that I do not trust Malaysian government statistics since they are subject to manipulation by politicians in power. I do respect Nurhisham’s views and commend him for attempting to defend  “economic data from Malaysia”.

The sad truth is that there is so much fake news from Najib Razak and his cohorts in recent years that I have difficulty in knowing what is fact and what is fiction. It is something I experienced in attempting to figure out Donald Trump. But when it comes to Malaysia it is pretty straight forward since in the Malaysian context, fiction is fact.

By the way, what China has to do with the issues raised in Manjit’s article. This statement which I quote from Nurhisham’s article –“One of the key tests to determine whether economic data is falsified is internal consistency and statistical irregularity. China, for example, fails on both counts”–is irrelevant.

Allow me to quote a comment from Greg Balkin who regards Nurhisham’s article as: “A very strong rebuttal to Manjit Bhatia’s shoddy arguments.

Unlike MB who simply fights against the wind and even with his own shadow, at least Nurhisham Hussein provided actual facts and statistics for readers to contemplate on and question if necessary.

As a long-time Southeast Asia watcher, I have been very concerned about Malaysia which is increasingly beset with contradictory developments. Economically, it continues to grow faster than some neighbouring countries such as Thailand and Cambodia (That is bull Greg, check your facts on Cambodia from the Asian Development Bank before making your comment. In its most recent assessment,the Bank described Cambodia as an emerging tiger economy), yet it is mired in a series of financial scandals over the past three years, not to mention the worrying political scene.

The problem is many Malaysians have lost faith in the Najib Administration to the extent that any article that chastises Putrajaya is welcome even if it is not backed up with facts and statistics. One can read many of them on Malaysiakini or Free Malaysia Today. But it does not help Malaysians to develop a more critical mind when it comes to holding the powers-that-be to account.

This explains why many opposition leaders, blinded by popular support and swayed by populist sentiment, simply make one unsubstantiated allegation after another, only to find their position untenable and forced to retract thereafter.

No worries, for they have the people behind them whose negative perceptions of the government are already cast in stone and it matters not if these allegations hold water. If this vicious circle persists, I would not surprise to see Malaysia vote out UMNO and replace it with another set of arrogant politicians armed with half-baked policies to administer the country.

But it is a politician’s job to make sensational yet unsubstantiated claims, and an economist’s one to right them. Precisely why MB’s latest article is not only a huge letdown, but one that is unbecoming of his credentials, if any.”

Let me present an alternative reaction to Nurhisham’s article. It is from someone who calls himself Bumiputera Graduate as follows:

“I am unsure if Nurhisham is trying to shore up confidence in the Malaysian economy or defend the credibility of social and economic data produced in Malaysia.

I think Nurhisham is an expert at  the sleight of hand.  He has shifted the focus in the article from the main points that Manjit is making to those where Manjit is inaccurate.

Among the inaccuracies Nurhisham pointed out is that Malaysia does publish its labour force participation numbers, and that its budget deficit is going down. But Nurhisham doesn’t deny that perceived inflation figures are higher than reported figures; he only says it’s also the case with the US, which is not an answer at all.

He doesn’t touch on Manjit’s point on Bank Negara Malaysia manipulating the currency. Is Manjit right? Or is he wrong? Nurhisham says that his friends and associates at IMF and the World Bank have full confidence in Malaysia’s statistics.

Who knows if Manjit’s friends at the Fund and the Bank don’t have any confidence in Malaysia’s statistics. Hardly an argument worth a pinch of salt coming from the general manager, economics and capital markets of a government agency – the Employers Provident Fund – whose investment decisions are themselves questionable.

Again, when there are conservative estimates of 2 million undocumented migrant workers, with what confidence will you say that the minimum wage is implemented?

The labour market, going by his 3.6% indicator, may be at full employment, but he’s sweeping away the big problem of graduate unemployment (predominantly a Malay problem), the huge migrant labour problem, and the low productivity.

But if Manjit does a bit more of research and does a full article on the Malaysian economy, he may come up with a longer menu of issues that plague the economy than Nurhisham will be able to defend.

Manjit Bhatia, the byline says, is with a risk analysis company. If people like Manjit have views like this, that says a lot for the confidence that foreign analysts have in the Malaysian economy.

I think Nurhisham fails miserably in trying to shore up optimism in the economy, if that was his intention, even as he defends the credibility of data coming from Malaysia. With rebuttals such as his, what little confidence the public has, will further slide down.”

I leave you, my blog readers, to decide between the two views (Greg Balkin and Bumiputera Graduate). As far as I am concerned, and if I have surplus cash to invest, I will stay out the Malaysian stock exchange, the bond market and the Malaysian ringgit for a while, since I have no confidence in the Najib Administration’s management of the Malaysian economy. –Din Merican

 Playing Malaysia’s number game

by Nurhisham Hussein

The article further states that there is no data for the job participation rate in Malaysia. This is rather unconventional classification, as everyone else uses the term labour force participation rate (LFPR) instead. In any case, the article is completely mistaken. The LFPR for Malaysia has been available at monthly frequencies since 2009, quarterly since 1998, and annual frequencies going back to 1982. The annual numbers are further broken down by age, gender, education, and ethnic background. The data shows, far from a decline in labour market conditions, a steeply rising LFPR from 62.6 per cent in 2009, to a near record high of 67.6 per cent in 2016 (with a long term average of 65 per cent). It should also be noted that Malaysia’s long term average unemployment rate is just under 4 per cent. At the current rate of 3.6 per cent, the labour market would still be considered to be at full employment.

Image result for Idris Jala

Between Idris Jala and Najib Razak–A Deformed Malaysia

The article goes on to say that Malaysia’s minimum wage is scarcely enforced. On the contrary, data from the EPF, to which all salaried workers are required to contribute, show a massive shift in Malaysia’s salary distribution when the minimum wage was introduced in 2013. Fully 10 per cent of the workforce shifted from below the minimum wage to above it, and the wage effect was evident across the entire bottom half of the distribution.

Fourth, the article claims that, “In Kuala Lumpur alone, credible estimates put inflation at least twice the ‘official’ number”, and “inflation hits close to double-digits, in real terms, according to some investment banks’ research.” The second statement is nonsensical – there is no such thing as inflation in “real” terms, because in economics real prices of goods refer to inflation-adjusted prices. But the larger point – that inflation is perceived to be higher than official statistics – is actually well known. Well known because the same discrepancy has been documented nearly everywhere.

A recent Federal Reserve research note explicitly addressing this issue, found that US citizens perceptions of inflation were consistently twice as high as the official statistics. Why that is so is an interesting question in itself and would take far too long to explore, but the larger point is that differences between perception and official statistics cannot be taken as prima facie evidence that those statistics are false. There is plenty of evidence that the opposite is true, for example via MIT’s Billion Prices Project, that it is perceptions that are mistaken and not the statistics. Furthermore, research into the methodology and mechanics of constructing consumer price indices conclude that if anything, the CPI tends to overstate inflation, not understate it.

Fifth, the article claims Malaysia’s fiscal deficit and national debt are “ballooning”. In fact, the deficit has been halved since 2009, to just 3.1 per cent for 2016, while the debt to GDP ratio has been kept under the 55 per cent limit the government imposed on itself. Manufacturing, far from being routed, has continued to thrive, with sales breaching an all time high of ringgit 60 billion a month over the past few months. Moreover, Malaysia has been one of the very few countries in the region to record positive trade growth over the past two years.

In the Age of Trump, democratic institutions are under attack everywhere. Trust in public institutions has declined, not just in Malaysia, but globally. Globalisation itself is in retreat, and schisms and conflicts that we thought were gone, have arisen anew. Be that as it may, undermining confidence in public institutions without substantive evidence reinforces these troubling trends, and works against the very foundations of a democratic society. Without them, the very thing that Manjit Bhatia appears to be arguing for, becomes further from reality.

Nurhisham Hussein is General Manager, Economics and Capital Markets at Employees Provident Fund, Malaysia.