How to Negotiate with the Chinese

Cultural Notes on Chinese Negotiating Behavior

New Year in KL

Police warned that the "no-underwear" event for under-40s, advertised through a website that asked for 250 ringgit ($A100) as an entrance fee, could be a money-making scam.

Party organisers had reportedly said that male guests were banned from wearing briefs to the event, while women were permitted to wear only G-string underwear that had to be removed after midnight.

-Dozens arrested at Malaysian 'sex party'

South Korea’s Cram Schools

“Min-ju, do your best! Fighting!” Mr. Chung shouted as his daughter disappeared into the building. Min-ju turned around and raised a clenched fist. “Fighting!” she shouted back.

South Koreans say their obsession to get their children into top-notch universities is nothing short of “a war.” Nowhere is that zeal better illustrated than in cram schools like Jongro Yongin Campus, located in a sparsely populated suburb of Yongin, 25 miles south of Seoul.

Most Jongro students are “jaesoo sang,” or “study-again students.” Having failed to get into the university of their choice, they are preparing relentlessly for next year’s entrance examination. Some try and try again, for three years running after graduating from high school.

The Jongro school pursues a strategy of isolation, cut off from competing temptations of any sort. Its curriculum is so tightly regulated and the distractions so few that students say they have no option but to study.

“Sending Min-ju here was not an ideal, but an inevitable choice,” said Mr. Chung, a 50-year-old accountant. “In our country, college entrance exams determine 70 to 80 percent of a person’s future. It’s a sad reality. But you have to acknowledge it; otherwise you hurt your children’s future.”

Admission to the right university can make or break an ambitious young South Korean. The university that students attend in their 20s can determine the jobs they get and the money they make in their 50s. The top-tier schools — Seoul National, Korea and Yonsei Universities, collectively known as SKY— may hardly register on global lists of the best in higher education. But here, their diplomas are a ticket of admission, an envied status symbol and a badge of pride for graduates and parents.

The life of a South Korean child, from kindergarten to high school, is dominated by the need to excel in standardized entrance examinations for college. The system is so demanding that it is credited with fueling the nation’s outstanding economic success. It is also widely criticized for the psychological price it exacts from young people. Among young people 10 to 19, suicide is the second most common cause of death, after traffic accidents.

-A Taste of Failure Fuels an Appetite for Success at South Korea’s Cram Schools

Indonesia- A Budding Democracy

Vice-president thinks the country is 'too free'?

The State of Post-Suharto Indonesia

Memo to Self- Books to Read

The Practice of Economic Management: A Caribbean Perspective
by Courtney Blackman

African Development: Making Sense of the Issues and Actors
by Todd J. Moss

Singapore's Success : Engineering Economic Growth
by Henri Ghesquiere

Rents, Rent-seeking and Economic Development: Theory and Evidence in Asia
By Mushtaq H Khan and Jomo Kwame Sundaram

Flat World, Big Gaps: Economic Liberalization, Globalization and Inequality
by Jomo K.S. , Jacques Baudot

Assorted Asia News Links

Asia Foundation Blog

ADBI E-Newsline

Stupid working paper titles

Has Inflation Hurt the Poor? Regional Analysis in the Philippines

From Asian Development Bank

The New Asian Hemisphere?

No matter if it is a white cat or a black cat; as long as it can catch mice, it is a good cat

-Deng Xiaoping

After leading the world toward a period of spectacular economic growth in the second half of the twentieth century by promoting global free trade, the West has recently been faltering in its global economic leadership. Believing that low trade barriers and increasing trade interdependence would result in higher standards of living for all, European and U.S. economists and policymakers pushed for global economic liberalization. As a result, global trade grew from seven percent of the world's GDP in 1940 to 30 percent in 2005.

But a seismic shift has taken place in Western attitudes since the end of the Cold War. Suddenly, the United States and Europe no longer have a vested interest in the success of the East Asian economies, which they see less as allies and more as competitors. That change in Western interests was reflected in the fact that the West provided little real help to East Asia during the Asian financial crisis of 1997-98. The entry of China into the global marketplace, especially after its admission to the World Trade Organization, has made a huge difference in both economic and psychological terms. Many Europeans have lost confidence in their ability to compete with the Asians. And many Americans have lost confidence in the virtues of competition.

There are some knotty issues that need to be resolved in the current global trade talks, but fundamentally the negotiations are stalled because the conviction of the Western "champions" of free trade that free trade is good has begun to waver. When Americans and Europeans start to perceive themselves as losers in international trade, they also lose their drive to push for further trade liberalization. Unfortunately, on this front at least, neither China nor India (nor Brazil nor South Africa nor any other major developing country) is ready to take over the West's mantle. China, for example, is afraid that any effort to seek leadership in this area will stoke U.S. fears that it is striving for global hegemony. Hence, China is lying low. So, too, are the United States and Europe. Hence, the trade talks are stalled. The end of the West's promotion of global trade liberalization could well mean the end of the most spectacular economic growth the world has ever seen. Few in the West seem to be reflecting on the consequences of walking away from one of the West's most successful policies, which is what it will be doing if it allows the Doha Round to fail.

At the same time that the Western governments are relinquishing their stewardship of the global economy, they are also failing to take the lead on battling global warming. The awarding of the Nobel Peace Prize to former U.S. Vice President Al Gore, a longtime environmentalist, and the UN's Intergovernmental Panel on Climate Change confirms there is international consensus that global warning is a real threat. The most assertive advocates for tackling this problem come from the U.S. and European scientific communities, but the greatest resistance to any effective action is coming from the U.S. government. This has left the rest of the world confused and puzzled. Most people believe that the greenhouse effect is caused mostly by the flow of current emissions. Current emissions do aggravate the problem, but the fundamental cause is the stock of emissions that has accumulated since the Industrial Revolution. Finding a just and equitable solution to the problem of greenhouse gas emissions must begin with assigning responsibility both for the current flow and for the stock of greenhouse gases already accumulated. And on both counts the Western nations should bear a greater burden.

When it comes to addressing any problem pertaining to the global commons, such as the environment, it seems only fair that the wealthier members of the international community should shoulder more responsibility. This is a natural principle of justice. It is also fair in this particular case given the developed countries' primary role in releasing harmful gases into the atmosphere. R. K. Pachauri, chair of the Intergovernmental Panel on Climate Change, argued last year, "China and India are certainly increasing their share, but they are not increasing their per capita emissions anywhere close to the levels that you have in the developed world." Since 1850, China has contributed less than 8 percent of the world's total emissions of carbon dioxide, whereas the United States is responsible for 29 percent and western Europe is responsible for 27 percent. Today, India's per capita greenhouse gas emissions are equivalent to only 4 percent of those of the United States and 12 percent of those of the European Union. Still, the Western governments are not clearly acknowledging their responsibilities and are allowing many of their citizens to believe that China and India are the fundamental obstacles to any solution to global warming.

Washington might become more responsible on this front if a Democratic president replaces Bush in 2009. But people in the West will have to make some real concessions if they are to reduce significantly their per capita share of global emissions. A cap-and-trade program may do the trick. Western countries will probably have to make economic sacrifices. One option might be, as the journalist Thomas Friedman has suggested, to impose a dollar-per-gallon tax on Americans' gasoline consumption. Gore has proposed a carbon tax. So far, however, few U.S. politicians have dared to make such suggestions publicly.

-The Case Against the West by Kishore Mahbubani

The U.S. system may be too lax when it comes to rigor and memorization, but it is very good at developing the critical faculties of the mind. It is surely this quality that goes some way in explaining why the United States produces so many entrepreneurs, inventors, and risk takers. Tharman Shanmugaratnam, until recently Singapore's minister of education, explains the difference between his country's system and that of the United States: "We both have meritocracies," Shanmugaratnam says. "Yours is a talent meritocracy, ours is an exam meritocracy. We know how to train people to take exams. You know how to use people's talents to the fullest. Both are important, but there are some parts of the intellect that we are not able to test well -- like creativity, curiosity, a sense of adventure, ambition. Most of all, America has a culture of learning that challenges conventional wisdom, even if it means challenging authority." This is one reason that Singaporean officials recently visited U.S. schools to learn how to create a system that nurtures and rewards ingenuity, quick thinking, and problem solving. "Just by watching, you can see students are more engaged, instead of being spoon-fed all day," one Singaporean visitor told The Washington Post. While the United States marvels at Asia's test-taking skills, Asian governments come to the United States to figure out how to get their children to think.

-Fareed Zakaria

They call it the Industrial Revolution because for first time in all of human history standard of living rose at a rate where they were noticeable changes in standards of living in a human life span- changes of perhaps 50 percent. At current growth rates in Asia standards of living may rise 100 fold, 10,000 percent within a human life span. The rise of Asia and all that follows it will be the dominant story in history books written 300 years from now with the Cold War and rise of Islam as secondary stories.

-Larry Summers

Search word of the day

Malaysians appear to confuse Australia with Austria- may be Mahathir's work has produced its results.

australia's madman, keep daughter at underground

Death toll from Myanmar cyclone rises to 22,500

Experts: Myanmar cannot run aid effort alone after cyclone

Burmese Junta Seizes Aid and Blocks Foreigners

U.S. Myanmar Policy Should Involve China

Derek Mitchell, senior fellow at the Center for Strategic International Studies, talks with Bloomberg's Tom Keene from Washington about Myanmar's military junta, the cyclone that may have killed 100,000 people in the country and U.S. policy toward Myanmar

The Poor in Cambodia

“My mother asked me, ‘What is the use of your going to school, if we don’t have anything to eat and life is so difficult?’”

“We are poor and we have nothing to depend on except land, so when we face any difficult problem, such as health concerns, we might sell land as the only way to survive,” explained a landless villager in Kompong Cham. “Actually we don’t want to do that, but we have no choice.”

“My husband had a serious case of malaria in 1990, and we were short of food, so I had to mortgage our ricefield to get (about $60 worth) of gold. I had no money to get my land back, and 3 years later I lost it to the creditor,” said a landless woman in Siem Reap....

In one case a villager reported that a physical assault by local thugs went unreported because the victim did not have the village clerk’s filing fee of about $1.20. In another case, villagers reported to police that illegal “electrofishing” was going on in the lake and harming their catch. The police confiscated the equipment of the criminals but that did not stop the fishing. “Afterwards (the police) sold the electrofishing gear to get money to line their own pockets,” one of the villagers explained. Such small abuses dot the landscape of poverty and create a sense that the government is remote and inaccessible.

Even those with a measure of authority, such as local commune councils, sometimes report that they feel powerless. “We are the local authority, village and commune, (and we) have prohibited villagers from cutting down the forest,” said a commune council member from Kampong Thom. “But… the people who cut down the trees are powerful and high-ranking. Some villagers sell their labor to those people, while others log the forests for sale (of wood) and for house construction. We do not take action because we have no power to arrest those powerful people.”

-Voices of the Poor

Structural Reforms in crisis times

Any attempt to deal with the full range of structural changes while also trying to manage a short-term recovery from the crisis put severe strains on government competence that made economic recovery and foreign debt negotiations more difficult.

-Martin Feldstein critiquing IMF on response to the Asian Financial Crisis of 1997

The Secret to Economic Development

What's traffic in Hanoi and St. Petersburg got to do with institutional reform?

So the real secret is that there is NO Secret to development.

Indonesia- is decentralization increasing corruption?

Indonesian schools hit by corruption

Dith Pran - the last word

An Extra-ordinary East Asia Economic Update

World Bank has release the update;

Economic outlooks are always uncertain, to be sure, but the level of uncertainty about prospects for the world economy just now is extraordinary. That matters in a region as highly globally integrated as East Asia. Forecasts for the US economy have been sliding lower for months but what’s less clear is how deep and protracted the downturn will be – underlying which are uncertainties about how much more widespread and intense the global financial turmoil that began last August will get.

See the data slide show

Medical Tourism in Thailand

The case Bumrungrad Hospital;

Last year, 65,000 Americans went to Bumrungrad for in-patient or outpatient treatment, up from just 10,000 in 2001. And of those 65,000, about half of them were U.S. residents who flew across the Pacific to Thailand for medical care. (The others were American expatriates living in Thailand or other parts of Southeast Asia.) Many of the patients from the U.S. were uninsured, taking advantage of medical costs in Bangkok that are just a fraction of those in American hospitals....

Medical tourism has helped Bumrungrad's bottom line. Revenue from foreign patients rose 14% last year, and non-Thais now account for 55% of Bumrungrad's business. In a Mar. 7 report, Phillip Securities analyst Rutsada Tweesaengsakulthai calls Bumrungrad "Thailand's leading private hospital" and predicts that revenue will grow 11.5% this year, to $618 million, with profits (after stripping out exception earnings from a sale in 2007 of a medical software subsidiary to Microsoft (MSFT) rising 12%, to $41 million.

The big problem, though, is that Bumrungrad is now too popular. It has a 70% occupancy rate for in-patients and outpatients, much lower than its bigger rival, Bangkok Dusit Medical Services. Bankgok Dusit doesn't get as many Americans but it attracts more international patients overall, with 649,000 checking in last year. Bumrungrad "is restricted by its tight capacity," wrote KGI Securities analyst Rakpong Chaisuparakul in a Feb. 20 report. That's one reason Bumrungrad's stock price has sagged, down about 15% for the year and trading near its 52-week low.

Bumrungrad has just started an expansion plan that should boost its capacity by 20% by 2012. Schroeder expects Americans to continue traveling to the hospital. "Medical inflation [in the U.S.] continues to outpace normal inflation and I don't see that reversing," he says.

Via Harry Clarke.

For God, Tsar and Fatherland

From a recent Foreign Exchange show;

How is Singapore's economy doing

IMF's annual health check on the Singapore economy is out;

IMF's view: Large net fiscal reserves resulting from past prudence provide scope over the medium term to meet social needs associated with rising income inequality and aging without compromising fiscal sustainability. A further deepening of structural reforms will be key to sustaining robust growth. While the financial system is sound, risks from increasing integration with international financial markets should be closely monitored and managed to maintain the stability and growth of the financial sector. With inflation expectations well anchored, there is no compelling reason to change the current monetary policy stance of targeting a modest and gradual appreciation of the nominal effective exchange rate at this moment. Nevertheless, if large capital inflows persist, the MAS should refrain from sterilization. This would discourage such inflows, easing the need for foreign exchange intervention. The large current account surplus at present can be mainly explained by structural and cyclical factors, but its ratio to GDP is expected to decline gradually over time as private investment continues to recover and the rapid aging of the population lowers national savings. The real effective exchange rate is likely to appreciate gradually as part of this process.

Government's view: The authorities broadly agreed with the staff’s assessment and policy recommendations. Notwithstanding their concerns about stagnant wages of low-skilled workers, they reiterated their view that work is the best form of welfare but did not rule out the possibility of further strengthening the social safety net. Proactive structural reform aimed at sustaining growth would continue, including promoting high value added sectors, encouraging research and development, and strengthening human capital. Safeguarding financial sector growth and stability is crucial to Singapore’s heightened role as a global financial sector. The authorities saw no need to adjust liquidity management (sterilization). They emphasized that money market operations are aimed at maintaining adequate liquidity in the banking system and that interest rates are not their monetary policy instrument. Within the exchange rate centered framework, interest rates could adjust on market expectations of the future path of the Singapore dollar without any shift in the MAS’ liquidity management.

Related;
Monetary Policy Operations in Singapore

Singapore's Exchange Rate Policy

Equilibrium Exchange Rates and Exchange Rate Forecasting
Professor Ronald MacDonald

The Foreign Exchange Origins of Japan's Economic Slump and Low Interest Liquidity Trap
Professor Ronald McKinnon

"Free Trade Agreements - An Economic Policy tool for Singapore in a Globalized World" by Teo Ming Kian, Executive Chairman of the Economic Development Board,