EDITORIAL : THE DAILY NATIONAL POST, CANADA

Jobs and investment

Corporate tax rates have become a hot election topic. The Conservatives say they will implement the previously legislated reduction in the federal corporate tax rate to 15% in 2012, the Liberals say they will roll the current 16.5% rate back to last year's 18%, and the NDP wants to increase the rate further to 19.5%. To these we need to add provincial rates that range from 10% to 16%.

One point of contention is whether corporate tax cuts generate investment and jobs. Opponents of tax cuts like to claim there is no evidence of increased investment. For example, Canadian Auto Workers economist Jim Stanford recently released a paper for the Canadian Centre for Policy Alternatives claiming that "tax rates have had no direct, statistically significant impact on investment."

Before I get to Mr. Stanford's paper, we need to acknowledge some key issues.

First, the economy is a complicated place and, despite the claims of various political parties and commentators, it is not at all straightforward to determine the impact of corporate tax cuts on things like investment and job creation.

Economic theory suggests that a key determinant of investment is something economists call the "cost of capital." This can be thought of as the cost of a unit of investment to firms and reflects, among other things, the price of capital, the interest rate, the depreciation rate, and corporate income taxes. Our economic models predict that if the cost of capital decreases -because of a reduction in interest rates, a corporate tax cut, etc. -investment will increase "all else being equal" (more on this below).

Now this is just a theory. Testing this theory is not straightforward. One problem involves data and measurement. Measuring investment itself is not as simple as you might think. Measuring the cost of capital is also difficult and requires all sorts of assumptions about interest rates, depreciation rates, the tax system, etc. Another problem is that investment is a forward looking decision. Thus, expectations about the future, including the cost of capital in the future, play a key role. Moreover, aside from the cost of capital, other factors such as economic conditions, and possibly business profitability, can affect investment.

Because of all of this, it has proven rather difficult to establish a strong relationship between the cost of capital and investment. The use of better data, including looking at corporate behaviour at the firm level and the use of sophisticated econometric techniques, has changed this. And there is little doubt that an economic consensus now exists based upon credible, properly done, peer reviewed research that reductions in the cost of capital due to corporate tax cuts do indeed encourage investment.

The estimates vary, and not all economic studies are created equal, but most of the credible studies find that a 10% reduction in the cost of capital will lead to an increase in investment in the long run of between 5% and 10%. Some studies, including some using Canadian data, estimate an even higher impact, perhaps as high as 15% for a 10% reduction in the cost of capital for some types of investment.

This flies in the face of some recent analysis that has been reported in the media. One such analysis is Mr. Stanford's recent paper. It is based on what he describes as "original econometric analysis of historical Canadian data on business fixed non-residential investment."

This is not the forum to deliver a technical critique of Mr. Stanford's paper; however, I will say that in my view the analysis is flawed and would not stand up to a rigorous peer-review process. Among several methodological errors that Mr. Stanford makes is the way he measures a key variable -what he calls the effective corporate income tax rate. His approach is simply wrong, inconsistent with the theory, and does not properly measure the impact of corporate taxes on the cost of capital. His use of highly aggregated data is also a problem.

Most modern studies are based on firm level data and at the very least make the very important distinction between investment in machinery and equipment (which is thought to be quite sensitive to the cost of capital) and buildings and structures (which is less sensitive). Failure to make this distinction results in what economists call "aggregation bias" and can severely affect the results.

Two other points bear emphasis. One is that investment responds to changes in the cost of capital with relatively long lags. As such, we should not expect a corporate tax cut this year to lead to a significant increase in investment this year, or next year, or even the year after that. The above estimates are for the long run -seven to 10 years at least.

Still another important point is that the estimates are based on that "all else being equal" condition. Economists often use this phrase to the bafflement of non-economists. But it is important. It may well be that investment actually falls, despite the tax cuts. This is because of the impact of other factors that can affect investment. The point is that, on average over the long run, the best empirical studies suggest that investment will eventually respond to tax-induced reductions in the cost of capital, and will be higher than it otherwise would have been.

Finally, there's the jobs issue. I am not aware of any peer-reviewed studies that directly estimate the impact of corporate tax cuts on job creation. Again, the problem is that a myriad of factors influence job creation, and it is difficult to isolate and identify the impact of any one factor, such as higher investment due to tax cuts.

What economists do instead is use the estimates I talked about earlier in simulation models of the economy to calculate the potential impact on job creation of the additional investment due to tax cuts. There is nothing wrong with this, but it is important to understand that it requires that we make several assumptions about the nature and structure of the economy. Again, what we shouldn't do is undertake a superficial comparison of jobs and corporate taxes and draw any conclusions one way or another -that nasty "all else being equal" thing rears its ugly head again.

There is, however, some recent econometric evidence which shows that lower corporate taxes do lead to higher wages and salaries. This research is relatively new and more work needs to be done before anything approaching a consensus emerges, but it is consistent with many theoretical models of the economy that argue that corporate tax reductions primarily benefit labour, particularly in a small open economy like Canada. This suggests that corporate tax cuts may actually be progressive; a topic for another day.

Hypocrisy on health care

In search of an issue that could turn the polls in his favour, the Liberals suddenly have begun focusing on health care. "Mr. Harper is a right-wing guy, and right-wing guys don't believe in the Canadian health-care system," Bob Rae said this week. "[He] has a long record of public statements opposing universal public health care in favour of private, for-profit delivery of health services -and given the risky spending and cuts in his platform, there is no reason to trust him."

We suppose this was inevitable. Over the past several elections, the Liberals have insisted that they alone can protect Canadian values -from women's rights, to the Charter of Rights and Freedom, to multiculturalism. They also have accused the Tories of having a "secret agenda" and of embracing "Americanstyle" policies. Since many Liberal supporters see our monopoly public-health system as a defining feature of the Canadian social contract, the health theme fits in well with this overall approach.

How inconvenient, then, that the health-care facts are not cooperating with Michael Ignatieff's party.

It was a Liberal prime minister, Paul Martin, who first turned a blind eye to the largescale growth of for-profit private clinics, particularly in Quebec and British Columbia. Even former Liberal prime minister Jean Chrétien allowed the start-up of some private clinics that violated the spirit of the Canada Health Act (CHA). So before the Liberals start throwing stones on the universal health-care file, they might want to consider the glass house they have constructed for themselves.

By the time Canadians voted the Grits out of office in early 2006, there were already more than 50 private, for-profit clinics in Quebec alone, most in the Montreal area, and several in Paul Martin's own riding. Mr. Martin's personal physician operated one of the largest chains of private health clinics in the country (although the Liberal prime minister insisted he saw his doctor only in his public practice). If any of this ever was objectionable to Messrs. Rae and Ignatieff, they seem to have kept their complaints to themselves.

In fact, the 2006 election was itself precipitated, in part, by the Liberals' unwillingness to enforce the CHA. Despite having pledged $41-billion to the provinces over 10 years in a 2004 deal that was supposed to fix the public health system "for a generation," by 2005 the NDP were nipping at the minority government's heels over the growth of private medicine. In 2005, Mr. Layton complained that a meeting with Mr. Martin on the issue "was a disappointment. Our specific proposal was rules to stop the growth of privatized health care. But the Prime Minister did not agree action was needed."

The Liberals insist Mr. Harper has a health-care spending plan that would eliminate Ottawa's leverage to force the provinces to comply with the Canada Health Act. They claim Mr. Harper's suggestion of transferring federal tax points to the provinces so each can raise its own revenues to fund its own health system would do away with the only bargaining chip Ottawa has -federal transfer payments -to make the provinces preserve the universal government health monopoly.

But here again, it was Mr. Martin who did away with what is known as the federal spending power. His 2004 agreement with the provinces permitted them to spend the additional $4-billion that Ottawa would send them annually any way they saw fit; no penalties would be extracted from provinces that spent the money in ways forbidden by the CHA. In practical terms, that amounts to the same thing the Tories are proposing in 2011.

The Liberals credibility on the health-care file was already in doubt because their first campaign ads on the topic misquoted Mr. Harper as wanting to do away with the CHA -a claim they were forced to retract. More importantly, their own history makes a mockery of their fearmongering.

Our belief is that this country needs more health-care freedom and flexibility. And we would be only too happy if Mr. Harper (or Mr. Ignatieff, for that matter) came out tomorrow with a definitive promise to let provinces conduct health care as they see fit, as a first step toward creating a European-style mixed publicprivate health system. But neither major party has given any indication that it would entertain such ambitious reforms. And to the extent that our system has liberalized in recent years, it is Paul Martin, not Stephen Harper, who deserves (depending on your perspective) credit or blame.

EDITORIAL : THE INDEPENDENT. ie, IRELAND

        


Regulation is pivotal to sale of state assets

ANYBODY wishing for a to-do list from Colm McCarthy was probably disappointed yesterday. The laconic UCD academic's report is long on detail but short on concrete recommendations beyond general warnings about selling assets too cheaply, too quickly or too slowly.

Frustratingly, the report makes no attempt to value the State's assets beyond reporting their book values -- a fairly meaningless metric -- which makes it difficult for the public or ministers to judge what is worth selling. Nobody would sell their house or car without enquiring first about the value and nor should the Government.

The value of the country's assets is now so small relative to its liabilities that it will be tempting for the coalition partners to paper over their differences by ignoring the divisive issue almost entirely. Privatisations are tricky; those on the right and the left can object to the sale of strategic assets such as the ports and the railways for different reasons. Industrial action is almost a given.

Fine Gael and Labour have committed themselves to raising €2bn, but to only reach this rather miserly target would be to waste a crisis. It has long been clear that semi-state profits are too low while salaries are too high. In some cases, the senior management and their pampered employees have been effectively looting their companies to a degree that has rendered them almost valueless despite decades of investment. Semi-state bodies were initially created to combine the private sector's zeal with the public sector's sense of duty, but yesterday's report all too often paints an ugly picture of private sector greed and public sector inefficiency.

It is for this reason that the argument could be made that state assets should be sold or closed where adequate alternatives exist. It can also be argued that there is no particular reason for the State to cut turf, compete to drive coaches between our major cities or build flashy airport terminals. We do it because we have always done it. Most of our neighbours have long since given up the day-to-day provision of such services. However, we should follow in their footsteps when, and only when, we have developed mechanisms to supervise new service providers.

The State has been remarkably poor at providing even the simplest services and there is every reason to believe that commercial organisations can do the job in future if they are regulated properly. Proper regulation is a vital caveat; poor regulation of the banks has already brought this country to its knees. Poor regulation of transport and energy providers could do the same. There can be no room for regulators who are too detached or plain lazy. It is an age-old problem: who will watch the watchdogs? No asset should be sold until we resolve this conundrum.

Children deserve better

THE cases reviewed in the report by the Ombudsman for Children's Office (OCO) make for sad reading -- not to mention the tragic young suicide highlighted in a separate report yesterday.

The OCO report, prepared by Dr Ursula Kilkelly, senior law lecturer at University College Cork, also uses blunt language of a kind not usually found in Irish reports on public services.

It talks of "faceless, bureaucratic" decision making, which seems to apply policy without any real connection to the situation. The Children's Ombudsman, Emily Logan, expressed concern about a lack of awareness in civil and public administration of how quickly children can be damaged by depriving them of education or separating them from family.

This speaks to a situation which requires serious attention. It will add to the public feeling of unease, which stems from the worst, and therefore the most publicised cases, that the social services are failing in child care.

Yet the welfare of children in distress is one of the most difficult of all administrative issues. We do not believe it lends itself entirely to the mantra, emphasised again in yesterday's report, that the interests of the child are central.

Justice Catherine McGuinness, who was part of the review group, may have come closest when she said the rules were often applied rigidly, so that the officials would not get into trouble for breaking them.

Finding a way to let people interpret rules more flexibly, without them getting into even more trouble if things go wrong will be a daunting task, but is one worth trying.

EDITORIAL : THE TEHRAN TIMES, IRAN

Persian Press Review

Tehran Times Political Desk

This column features excerpts from editorials, commentaries, interviews, and news articles of the leading Iranian newspapers and websites.

Wednesday’s headlines

SHARQ: Majlis speaker files complaint against president

TEHRAN-E EMROOZ: Deputy Judiciary chief says violation of law is not condoned by any official

KHORASAN: Three branches of government will supervise the performance of Oil Ministry

JAVAN: Bloodbath by Gaddafi in Misrata before NATO eyes

HEMAYAT: Head of Iran’s Supreme Court requests UN to end the continuation of genocide (in certain Arab countries)

KAYHAN: Iran, Iraq negotiate on helping Bahraini people

FARHIKHTEGAN: Uprisings in Middle East, North Africa have their roots in increased awareness of people, Rafsanjani says

MELAT MA: Jet fuel price increases 4 times

IRAN: Iran ready to appoint an ambassador to Cairo, Foreign Ministry spokesman says

GODS: If sanctions on Iran are not lifted, oil prices will soar above $150, Central Bank of Iran governor warns

IRAN in a news report quotes Alaeddin Boroujerdi, the chairman of the National Security and Foreign Policy Committee, as saying that he thinks it would be better that the Intelligence Ministry continues its activities in the current form without being changed into an organization. Boroujerdi added the proposal to change the ministry into an organization was raised in the previous parliaments as well. Boroujerdi also stated that if the Intelligence Ministry remains a ministry, the parliament can better supervise its activities. In addition, continued cooperation between the Majlis and the Intelligence Ministry can make up for shortcomings, Boroujerdi opined.

SHARQ in a news report quotes Mohammad-Nabi Habibi, the secretary general of the Islamic Coalition Party, as saying that President Mahmoud Ahmadinejad must not allow those around him to interfere in the affairs concerning the appointment or dismissal of officials. He said the president should become vigilant about such interferences until it is not too late. On the resignation of Intelligence Minister Heydar Moslehi which was accepted by President, Habibi stated that the president’s acceptance of the resignation was not justified which came shortly after the Leader visited the Intelligence Ministry and expressed appreciation for the efforts of the ministry personnel, particularly the minister. He also urged the president not to allow others undermine the authority of ministers in appointing or dismissing their deputies

EDITORIAL : THE JAKARTA POST, INDONESIA

Realigning credit cards

We’re glad to know Bank Indonesia will soon issue more stringent rules on the issuance of credit cards and credit-card debt collection, although the problems here have not yet reached the magnitude of the crisis in South Korea in 2003, which required tens of billions of dollars in bailout funds from the government.

That, we think, is a blessing in disguise, since the March 29 tragedy when politician Irzen Octa who owed Citibank around Rp 100 million (US$11,500), died after a meeting with debt collectors.

The fatality instantly exposed wide open the hazards of mounting credit card debts.

But even though the number of credit cards in Indonesia had increased dramatically to almost 14 million as of February, and credit card-based transactions last year alone totaled Rp 163.2 trillion, the economic toll and social tragedy associated with personal debts cannot yet be considered critical.

However, conditions in Indonesia over the past five years have been quite similar to those experienced in South Korea between 1999 and 2002 when the government, in a bid to stimulate economic growth, encouraged private consumption, including a spending binge via credit cards.

But after less than four years of reckless credit card promotion, the industry plunged into crisis in early 2003 with personal bad debt reaching hundreds of billions of dollars and the media reporting a rash of suicides, violent crime, kidnappings and prostitution attributed to credit card over-borrowing.

Aggressive and sometimes reckless sales campaigns by banks in Indonesia have also succeeded in putting more credit cards into their customers’ hands, and card transactions have more than tripled with around 70 percent of card holders paying their bills in installments despite the 3.5 percent monthly interest rate.

Foreign and local banks have taken out big advertisements in newspapers and offered generous perks as special discounts at restaurants and stores to entice new customers, even with a monthly fixed income of as little as Rp 2.5 million.

While bad debts among card holders have not reached a critical level, they have been increasing steadily to almost 10 percent of the billing balance, from as little as 2.5 percent five years ago. But a crisis could be in the offing if banks are allowed to continue their reckless sales practices amid the fierce market competition, overlooking the credit risk and offering cards to just about anyone who can produce an identity card and wage printout and who is willing to fill out an application form.

The central bank should rein in such aggressive marketing practices because they go totally against prudent risk management.

What is needed now is more stringent requirements regarding the minimum wage, minimum income and credit ceiling for credit card holders and stronger rules on the code of conduct for credit card debt collection.

Better yet, Bank Indonesia could start preparing draft laws on credit cards and debt collection because the use of plastic money, instead of being restricted, should be further be encouraged as a mode of payment to reduce cash transactions and consequently money laundering and tax evasion that has been a struggle to monitor in such a predominantly cash economy as Indonesia.

In the name of justice

A revelation last week by the Judicial Commission that judges in Antasari Azhar’s murder trial had ignored important evidence and testimony that might have cleared the former chief of the Corruption Eradication Commission (KPK) of all charges was surprising and a considerable breakthrough in our legal system.

Commission members have alleged that the judges deliberately disregarded expert witnesses in the murder of businessman Nasruddin Zulkarnanen, particularly in connection with the type of firearm and bullets that were used to kill him. An IT expert also testified in court that text messages containing threats, supposedly from Antasari, that were stored in Nasruddin’s cell phone were bogus, but used by police investigators as incriminating evidence that Antasari had a motive to kill Nasruddin.

The commission’s move is obviously helpful in ensuring transparency and fairness in the country’s judiciary system, particularly when it comes to court verdicts.

It is true that judges should remain independent in their job and heed their conscience when issuing verdicts. However, judges have frequently ignored the evidence presented and witnesses’ testimonies and merely honored the dossiers submitted by prosecutors.

The revelation by the commission therefore sends a strong message that judges need to carefully and thoroughly examine the facts in cases on trial. Otherwise, they will be subject to the commission’s examination and if later proven that they deliberately ignored or dismissed evidence and witnesses’ testimonies, they can be sanctioned, with dismissal from active duty at the maximum.

We have had the saddening experience of wrong verdicts by judges in the past, with the Sengkon-Karta case being the most well known. In this particular case, two people were sentenced by the Bekasi District Court in 1977 to 12 and seven years respectively for killing a man. But the Supreme Court overturned the verdict and ordered their release in 1981 after it had been proven that the police had tortured them to extract false confessions.

In the name of justice, cases of wrong verdicts like those handed down to Sengkon and Karta as well as to others must not be repeated. It would be better to release 1,000 wrongdoers than to jail an innocent person, as the saying goes.

EDITORIAL : RFI english, FRANCE

French press review 20 April 2011
It's royal wedding fever in Wednesday's French press - though scandal, big money and Dogon art also get a look-in.
Le Figaro has colour pictures of the British royal couple and Liliane Bettencourt on the front page. Now, that's what I call a right-wing newspaper.

The world may be going to hell in a handcart, but England has got royal wedding fever and that seems to be the only story worth talking about.

Le Figaro looks at the top ten mysteries surrounding the wedding, with just nine nervous days left before the big event.

Which designer's dress will bride-to-be Kate Middleton choose? Alexander McQueen has for a long time been the favourite, but there are a couple of other contenders, and even a suggestion that Kate might wear an outfit of her own creation.

Will she wear a diamond tiara or a simple crown of flowers? The bookmakers think it will be flowers.

What, or where, will the newly-weds be duke and duchess of?

What uniform will William wear? With a long and varied military career behind him, he can choose between the Blues and Royals, the Irish Guards and the RAF.

Where will they spend their honeymoon? You can bet that many a tabloid editor in London would pay his life's savings to know where to send his hordes of paparazzi.

One thing we do know. The official wedding poem has already been written by the poet laureat, Carol Ann Duffy. It's called, simply, "Rings".

Liliane Bettencourt is the billionaire boss of the L'Oréal cosmetics empire, the second richest woman in the world, according to Forbes Magazine.

She has recently been keeping her head down, following a series of scandals involving photographers, government ministers and political backhanders, but she breaks her silence in Le Figaro to assure share-holders that the L'Oréal cosmetics operation is in good hands, that the accountants have put the pieces back together again, and that there'll be no more scandals.

Her last answer is a touching one, as Liliane reflects on the difficulties of being stinking rich. "Being wealthy creates possibilities, but also requirements and responsibilities towards others. It's not as easy as people might think."

Will economists someday rule the world? I mean someday soon, and I mean really rule, not just in the metaphoric sense that they already do.

That question is inspired by Le Monde's front page story which looks at the nervous reaction of the global stock markets to the decision by the Standard & Poor's economic rating agency to re-examine their evaluation of the US economy from "stable" to "negative", with the further possibility that the only triple-A economy on the planet might be about to lose that top status.

That will mean that Standard & Poor's will bring into question America's capacity to pay its debts and honour the bonds issued by the US Treasury.

And that's going to worry not just shareholders but finance ministers the world over, ministers who have happily thrown their nation's cash into the US coffers in the belief that it was safe as houses.

But now, the mysterious men who work for Standard & Poor's have cast a shadow of doubt over the whole crumbling edifice of global debt.

It's a bit like the third Superman movie, when Superman saves Richard Pryor as he falls from a Gotham skyscraper. "Don't worry," says the strong man in blue tights, "I've got you." "Yeah," says the dubious Pryor, "but who's got you?"

The problem is that Standard and Poor's are not subject to election, nor to any form of control. I don't doubt that they base their world-shaking decisions on real concerns, but does that give them too much power?

Libération's culture pages visit the exhibition of Dogon sculpture at the Museum of Primary Art here in Paris.

The masks and statues are a remarkable testimony to the strength of Dogon culture. I particularly like the carved pillars which support the meeting rooms known as "toguna", rooms with very low roofs where those who lose their tempers and jump to their feet risk a salutary smack on the head from the ceiling.

For the Dogon, says the Libé reviewer, there is no artificial barrier between art and life.

EDITORIAL : THE DAILY TRIBUNE, THE PHILIPPINES

 

Bottomline: Noy has not delivered

Click to enlarge

The nation seems to have acquired a belligerent president in the person of Noynoy Aquino, resulting in what is expected to be more hardships for Filipinos as the economic difficulties are aggravated by the political friction he has been, and still is, causing.

The House opposition, which is at the moment mainly the wing supporting former president and now Pampanga Rep. Gloria Arroyo, is offering critical collaboration to get things going primarily in the legislative mill, but Noynoy’s response to the offer was his spokesmen letting loose a barrage of wisecracks against the Arroyo camp.

Noynoy has shown, too many times, that he is not presidential at all, and worse, there appears to be no hope of his ever conducting himself as President of the Republic as well as a statesman. Neither, it seems, are his spokesmen conducting themselves with proper decorum, since they too, engage in sniping at Noynoy’s political foes and demeaning the Office of the President.

Gloria indeed should be made to answer for a lot of allegations of improprieties during her term, but an earnest offer for political collaboration should have been entertained since nothing is really moving in terms of governance under Noynoy.

What the nation has are frequent speeches about the ills of the past topped by already annoying spiels about the straight path and ending poverty and corruption — all rhetoric, and not an iota of substance in these spiels.

Noynoy has given the nation a pure talk show of an administration. It exudes all the bravura in his and in most of the other speeches of officials under him, but it has become only too clear that they are direly short of equivalent achievements.

Even his much hyped Truth Commission, the creation which was among his first presidential proclamation, appeared to have reached a legal deadend since the Supreme Court had ruled that its creation was against the Constitution — although the high court did provide guidelines on how to create such a body within constitutional parameters, which Noynoy has refused to do, relishing instead in more of his snipes at the SC justices.

It is tempting to surmise that Noynoy is keeping up the word war against the camp of Gloria as a way of diverting public notice from his administration’s incompetency that is becoming more conspicuous by the day.

Launching a war against anybody is a worn-out political gambit to win public support. Former Argentina President Leopold Galtieri even had to provoke a war with mighty Britain over the Falkland Islands just to turn around public sentiment on his military junta.

Noynoy’s ratings are starting to dive, obviously as a result of the public growing weary over the same line of promises dished out by Noynoy in each of his speeches about a clean government and running after all the public scalawags while remaining directionless and visionless.

He, however, has proven that he does not practice what he preaches about cleaning the government of incompetent and corrupt officials.

In too many occasions, Noynoy would defend close allies who are patently corrupt or inefficient.

By keeping up the friction with Gloria, Noynoy apparently wants to rally the nation behind him against a perceived enemy.

The enemy, however, is not exactly Gloria herself but the corruption and abuse of power that have plagued her administration for the past nine years.

The hope for Noynoy to eradicate these problems in one fell swoop was what made voters offer him a crack at the presidency.

Such problems remain, however.

Of course it would be convenient for Noynoy to put the blame on Gloria for all the ills that bug his administration, including those he created.

Change is really elusive and Noynoy has failed to deliver. That’s the bottomline.

EDITORIAL : THE NEW STRAITS TIMES, MALAYSIA

Capitalising on innovation

RECENTLY, Prime Minister Datuk Seri Najib Razak returned from his official visit to South Korea with RM5 billion in promised investments. On Monday, he announced RM901 million worth of assured investments in seven brand new Entry Point Projects (EPPs). This raises the cumulative investments since the launch of the Economic Transformation Programme (ETP) in October to more than RM106 billion in 72 projects that can create 300,000 jobs and add RM154 billion to the economy. As the latest update is the fifth progress report, it shows that the government has lived up to its promise to bring the nation up to speed on the latest developments in the ETP. More importantly, the fact that two-fifths of the targeted 131 EPPs are in various stages of implementation is an indication that the ETP has not been all visionary talk about economic transformation but, rather, actual execution of tangible plans of action.

Of course, it's early days yet. Of the 60 projects announced earlier, only four are up-and-running, 26 have just started operating, and the rest are gearing to get under way. Nevertheless, given the bare six months since the ETP's launch, this is a telling demonstration of the determination to translate the economic road map into action with all possible speed. In any event, it shows that the momentum for economic transformation is picking up. Though there's still some way to go, it won't be long before the multiplier effects of the considerable spending in significant National Key Economic Areas will be felt across all sectors of the economy. With projected growth expected to range between five and six per cent this year, exports likely to expand within eight to 10 per cent, inflation manageable at three per cent, the stock market climbing, consumer confidence improving, and foreign and domestic investment rising, the economy appears to be well on track.
But as the prime minister pointed out, investments alone are not enough to steer the country towards a high-income economy by the end of the decade. We can no longer rely on cheap labour and borrowed technology to grow the economy. To attain developed nation status, we need to move up the value chain based on high technology and innovation. As the 113 inventions out of 1,000 that have commercial potential suggest, there is no dearth of marketable ideas at local research institutions. In this regard, "Innovation Lift-off" is a step in the right direction, as it would allow innovators to cash in on their inventions and the country to profit from the creation of new products and markets.

EDITORIAL : THE NEW YORK TIMES, USA

How Not to Plan for the Future

The agreement between Congress and the White House to virtually eliminate money for high-speed rail is harebrained. France, China, Brazil, even Russia, understand that high-speed rail is central to future development. Not Washington.

The budget package eliminated about $1 billion that President Obama had wanted to add to the current budget, and it rescinded $400 million of $2.4 billion that was already designated for high-speed rail this year.

That money was supposed to go to Florida, but it’s now up for grabs after Gov. Rick Scott mindlessly rejected a plan to build the first high-speed rail corridor between Orlando and Tampa. Despite the vast support of business, Governor Scott claimed it would be too costly for the state government. It turns out that a lot of other governors — including 11 of Mr. Scott’s Republican colleagues — would love that money.

Transportation Secretary Ray LaHood has to choose among 90 proposals from 24 states, the District of Columbia and Amtrak — $10 billion worth in all. The real scandal is that Washington won’t pay most of them.

Two areas stand out on that list: the Northeast corridor from Boston to Washington; and California, which has ambitions to build a high-speed rail system from San Francisco and Sacramento to San Diego. California voters have approved almost $10 billion in bonds for the project (which has an ultimate price tag of some $45 billion), but the state wants the $2 billion for an extension.

That is a promising project, for later. The overall price is not practical now, and the Northeast already has the fastest train in the country, the Acela, which is running on tracks that do not allow it to reach its full speed.

Amtrak, backed by regional governors, is asking for $1.3 billion that would help speed up Acela trains. Some would go to signal, electrical and track improvements to boost the Acela’s speed from 135 miles per hour to 160 m.p.h. in a long stretch between Philadelphia and New York City. New York has another request to clear a path for Acela through an overloaded exchange near New York City’s Pennsylvania Station. Right now more than 750 Long Island Rail Road, Amtrak and New Jersey Transit trains pass through there daily.

Other requests in the Northeast proposal include money for Amtrak to start work on two tunnels under the Hudson River. Those tunnels, vital to rail and road travel through the region, would replace a project that New Jersey’s governor, Chris Christie, canceled last year, costing his state $3 billion in federal funds.

After making that terrible mistake, Mr. Christie now says he wants $570 million in funds to replace another choke point for the Acela — the 100-year-old Portal Bridge across the Hackensack River. He is even willing to put up $150 million of state money, since the bridge is also used by New Jersey commuter trains. In his letter asking for federal funds, he lamented that the bridge, which swings open for river traffic, is “beyond its useful life” and delays trains. That’s rich coming from the man who canceled a project that was vital to ending train delays in the future.

There are many requests, even one from Gov. Scott Walker of Wisconsin, a Republican who earlier rejected $810 million of these funds. Now he wants $150 million for a modest rail project between Milwaukee and Chicago.

President Obama originally proposed spending more than $50 billion over the next six years to make America’s passenger rails compete with other industrialized nations. He wants 80 percent of the nation to have access to high-speed rail in 25 years. That’s not likely to happen with this Congress. Perhaps Governors Christie and Walker, and other Republicans who have a sudden fervor for high-speed rail, can help make his case.

Time for Plan B

A 14-year effort to negotiate an international treaty banning the production of nuclear weapons fuel is getting nowhere. Under the terms of the United Nations’ Conference on Disarmament, all 65 participants must agree. Pakistan, which is racing to develop the world’s fifth largest arsenal, is refusing to let the talks move forward.

It is clearly time for a new approach. So we are encouraged that the Obama administration has begun discussing with Britain and France and others the possibility of negotiating a ban outside the conference, much like the 2008 convention on cluster munitions and the 1997 land-mine treaty. While the United States, Russia and China still are not signatories — they should be — many others are, and the two agreements are credited with greatly diminishing, although not eliminating, the use of both weapons.

Russia and China, which must be part of any fissile material ban, are resisting the idea of ad hoc negotiations. They should tell Pakistan to let the conference do its job, or they should accept the alternative. China has particular influence as Pakistan’s longtime supplier of nuclear technology, including a fourth reactor for producing even more nuclear fuel.

Islamabad dug in its heels after the George W. Bush administration persuaded the international community to lift a ban on civilian nuclear trade with India. The ban remains in place for Pakistan.

India, unlike Pakistan, isn’t a serious proliferation risk. Still, the deal was deeply flawed. It did not require India — estimated to have at least 100 nuclear warheads — to halt fissile material production. And now that New Delhi can buy foreign uranium for its power reactors it can husband its domestic uranium for weapons.

Islamabad argues that the fissile material ban would further lock in a military advantage for India. Pakistan already has 95 or more deployed nuclear weapons, up from the mid- to high-70s two years ago. It should be less fixated on India and more focused on using scarce resources to educate its children and battle home-grown extremists. Along with the test ban treaty (which the Senate still must ratify), getting countries to stop producing fissile material is essential for curbing the world’s most lethal weapons. A ban would give the United States and others more leverage to pressure North Korea and Iran to abandon their nuclear efforts. Serious negotiations need to start now.

77 Cents on the Dollar Isn’t Fair

In a disappointing defeat for women, Senate Republicans worked overtime in December to ensure that a measure addressing gender-based wage discrimination never reached the Senate floor where it likely would have passed by a sizable majority. Fortunately, supporters of the Paycheck Fairness Act have not given up.

Last week, Senators Harry Reid, the majority leader from Nevada, and Barbara Mikulski, a Maryland Democrat, reintroduced the bill. Representative Rosa DeLauro, a Democrat of Connecticut, has reintroduced the legislation in the House.

Women now make up almost half of the American work force, but, according to data compiled by the Census Bureau, full-time female employees still make, on average, only 77 cents for every $1 earned by men.

The bill, a much-needed updating and strengthening of the nation’s half-century-old Equal Pay Act, would enhance remedies for victims of gender-based wage discrimination, shield employees from retaliation for sharing salary information with co-workers and require employers to show that wage differences are job-related rather than sex-based, and justified by business necessity.

President Obama has pledged to “keep up the fight” to pass the bill. In a recent radio address, he explained that he takes the issue personally, “as the father of two daughters who wants to see his girls grow up in a world where there are no limits to what they can achieve.”

With Republicans now in charge of the House and the Senate’s Democratic majority whittled down, securing the needed votes will be tough.

Women around the country — from both parties — need to speak up. Lawmakers might think twice about refusing to act if they knew that female voters were taking down the names of those who would rather please corporate interests than stand up for a woman’s right to earn equal pay for equal work.

A Good Law That’s Working

After years of overfishing, many fish populations have begun to recover. On Monday, Commerce Secretary Gary Locke announced that New England’s fishermen will be allowed to increase their catch of 11 commercially important fish stocks in Atlantic waters this summer.

This progress, and that announcement, can be traced directly to the Magnuson-Stevens Act, a 35-year-old law that imposes ambitious timetables for rebuilding depleted fish stocks and gives scientists a major say in setting limits. So it is disturbing that New York’s two Democratic senators, Charles Schumer and Kirsten Gillibrand — both with solid environmental records — want to weaken the law.

Along with two senators from North Carolina, Kay Hagan, a Democrat, and Richard Burr, a Republican, they have introduced the Flexibility in Rebuilding American Fisheries Act. It would extend the deadlines for rebuilding fish populations and give greater weight to the “economic consequences” of fishing restrictions — another way of saying that science should play a less-decisive role.

Senators Schumer and Gillibrand are responding to the complaints of Long Island fishermen who say they are seeing more fish like summer flounder and argue that they should be allowed to exceed existing quotas. But they should ask themselves this: Why are they seeing more fish? As in New England, the reason is Magnuson-Stevens, and the limits on overfishing it imposes.

The senators need to show more patience. As fish populations improve, catch limits are relaxed. The summer flounder quota has gone up by 89 percent since 2008 — a healthy jump for fishermen but not enough to slow the species’ steady recovery. Since many other species around the country have not fared as well as those in eastern waters, and still need time, the message here is clear: Leave Magnuson-Stevens alone.

EDITORIAL : THE GUARDIAN, UK

           

 

Syria: States of emergency

It is tempting to see regional opportunities in Syria's turmoil – but no Arab spring has yet been nurtured by foreign intervention

Weeks of demonstrations in Syria reached a turning point this week. In the country's third city, Homs, a Tahrir-style sit-in was broken up when police fired into the crowd. More than 20 pro-democracy demonstrators have been killed in the town since Monday. But the switch in many minds happened earlier. It was when President Bashar al-Assad announced he would end nearly half a century of emergency rule. Far from being placatory, he patronised. It was all a problem of communication, he explained. There was a conspiracy (the demonstrations), there were reforms, and there were "needs" of the citizens, not only economic ones. He was sure his citizens understood, but how could they appreciate what was going on when the government did not explain to them what was happening?

President Assad's audience understood only too well. Accused by the regime of being Salafist infiltrators, Muslim Brotherhood stooges, saboteurs supported by Lebanon's Saad Hariri and Saudi Arabia's Prince Bandar Bin Sultan, or agents of the Mossad and the CIA, the protesters demanded to be heard as Syrians. Chants for reform gave way to chants for regime change. "From alleyway to alleyway, from house to house, we want to overthrow you, Bashar", mourners chanted at one funeral. Ever since, they have been attempting, at great cost, to recreate a Syrian Tahrir Square, a physical epicentre of revolt in any major city.

The Assad family (there is Bashar's brother Maher al-Assad, commander of the Republican Guard, and his cousin Rami Makhlouf) now find themselves with fewer political levers to pull, although there are plenty of military ones. Interior Ministry statements go unheeded. Protests continued overnight in Zabadani, Jabla and Aleppo. In Homs, the shops stayed closed, a sign that the urban Sunni population is starting to join in. They will not be mollified by sacking the governor in Homs or the chief of security in Banias. What started with a brutal, but routine, local incident, when police beat up and tortured a group of graffiti artists in Deraa, has become a nationwide protest.

It is tempting to see regional opportunities in Syria's turmoil. This is not just paralysing the Arab League, which postponed a summit scheduled for May, but also encouraging the belief that Assad's rejectionist allies, Iran, Hezbollah, and Hamas, would stand to lose with his departure. Some may be tempted to conclude that fomenting dissent in Syria is a risk worth taking. This is folly in any part of the Middle East but particularly for a country with Syria's borders. No Arab spring has yet been nurtured by foreign intervention. It could yet be killed off by one.

NHS plans: In the waiting room

Getting back on track and staying there is going to be incredibly difficult in the absence of any strategy

Likened by its rightwing detractors to a national religion, the debate over the NHS is far from theological for people who are being told to wait for an operation. All the arguments about governance structures, control of purse strings and even the private sector's role pale into insignificance when the waiting lists start to become longer again. The King's Fund yesterday produced a report which interviewed health service finance directors, and crunched the official data on waiting times. It found an upward trend for "all stages of waiting ... [since] June 2010". There is plenty of evidence that managers are embarking on redundancies, closures and rationing that could make things worse.

It is true that the health service was in for a rough ride whoever won last year's election. An unprecedented expenditure squeeze that would lead to rationing and delays was always in prospect. But the coalition has squandered its claim to the argument that there is no alternative to cuts because David Cameron made such a point of promising to protect the service. The coalition's credibility is further undermined by suggesting that the cuts which the public are already witnessing must be an illusion. The claim to be increasing resources in "real terms" relies on a statistical cigarette paper at best, and ignores the raid which the bankrupt care system has been invited to make on the budget. The government has aggravated the consequences of parsimony, first by initiating wild "reforms" of the English service, and then by pressing the pause button when its dubious revolution is already under way.

Andrew Lansley staked everything on his marketopian theories. One of his first acts as health secretary was to instruct his department to stop central management of Labour's waiting guarantees. His assumption was that the rigours of competition would be enough to keep medics on their toes, leaving him free to do away with a tainted target culture. In fact, the eventual commitment to end-to-end treatment within 18 weeks was more supple than earlier strictures that had targeted every waiting list separately, and so perversely encouraged the shuffling of patients between them. By 2010, while the system remained far from perfect in large parts of the country, dangerous waits for things like cardiac care were consigned to the past, and public satisfaction reached a record high . Now the 18-week benchmark is being missed again. Admittedly, not by much , but as Whitehall belatedly scrambles to remind the service that the target remains in its constitution, getting back on track and staying there is going to be incredibly difficult in the absence of any strategy.

Staffed by temporary execs, and in the midst of disbanding themselves, primary care trusts are not going to provide one. Last financial year, some were already arbitrarily refusing operations of extraordinary and documented clinical value, such as knee replacements. This week the Federation of Surgical Speciality Associations warned such stark refusals could spread, while the King's Fund has uncovered plans to "manage demand" through crudely "reducing activity".

Of course, there are areas where resources can and must stretch further to answer growing needs, particularly in respect of long-term conditions such as diabetes. Changes that put power in the hands of the patient could make a real difference, but they will not come about until the government has a coherent plan. Instead, we are at an impasse, with ministers acknowledging that they need to change their plans but giving no sense of how. The outcome will turn on trade-offs and crass party politics – whether it is the coalition's blue or yellow wing that requires placating after the alternative vote referendum is counted. For patients listening to the painfully slow tick of a clock, it is a sick joke indeed.

In praise of: a Lords moratorium

Many new peers cannot do their job properly if they are turned into ermine-clad battery hens

Posh club declares itself closed to new members shock! In other circumstances, it would be right to ask why peers are backing a report that says the House of Lords is full. Are their Lordships struggling to find space in the tearoom or short of sunny spots to sip G&Ts on the terrace? But this report, from UCL's Constitution Unit and an all-party array of peers and MPs, makes a serious point. It is a pity that it was dismissed, instantly, by Downing Street yesterday morning. Caught in a sort of half-life before promised reform, the Lords was packed by the last government and is being packed again, only partly in the interests of political balance. In the last year 117 peers have been created, including 39 Labour ones, taking the House to a complement of 792 members. If its membership was proportional to the last general election result, as the government wants, 269 more peers would be needed and the Lords would have 1,061 members. This is absurd. Not only is it expensive – many new peers have been vigorous in their take-up of daily expenses – but they cannot do their job properly if they are turned into ermine-clad battery hens. The report also criticises the way peers are appointed: there is too much patronage and too many former MPs, eased into the upper house after an inglorious Commons career. The answer is not just a smaller chamber – the US Senate manages with 100 members – but also democratic reform. In the meantime, "house full" signs should be hung on the door.


 

EDITORIAL : THE GLOBAL TIMES, CHINA

Fighting the food fight a necessary team effort

Food safety has stirred the nerves of the nation.

From tainted milk to dyed steamed buns, from illegal additives to forged beef, food safety has remained a buzzword after a string of national scandals, igniting heated debate on the inefficiency of supervisory agencies and people's "moral degradation."

After being suspended for one month because of a tainted-meat scandal, China's largest meat processor, Shuanghui, resumed trading Tuesday, and its stocks plunged the 10 percent daily limit twice, causing a loss of at least 8.9 billion yuan by Wednesday.

The furious reaction of the market and consumers has dealt a heavy blow to those who are dishonest or even violate the law in food production.

The austere situation of food safety not only threatens the health of consumers at home but it also tarnishes the image of the nation. For example, the US government decided in February to ban the import of at least 56 types of foods produced in China.

Without well-educated citizens or ethical strength, China "can't be a respectable economy or a power in the real sense," Premier Wen Jiabao warned last week, making him the highest official to have made such blunt remarks toward food scandals. Food safety has been raised to the level of national strategy.

Meanwhile, it might not be an effective prescription by only stressing that food producers, which are profit-oriented in nature, be self-disciplined and stick to moral standards during production.

An investigative report by Xinhua over the weekend also noted that the budget and salary of food-supervisory agencies in many places mainly depend on returned fines and fees collected during their tours of the facilities.

Such a supervisory system has turned out to be so loose that quite a lot of "fish" have escaped from the net. During the investigations of the Sanlu tainted-milk case and Shuanghui scandals, some local officials even racked their brains to shield the enterprises because they are the biggest sources of tax revenue for local governments.

China should learn from the common practice implemented in Western countries and deal a deadly blow to those producers once they are found to produce fake or inferior foods.

Additionally, consumer and consumption agencies are the most vigilant groups when it comes to food safety and personal health, and they should be adopted into the supervisory system.

One effective way to mobilize consumer enthusiasm is to give more media coverage to the disclosure of fake food producers.

Food scandals have become a public enemy that demands public involvement to eradicate the problem.

Enlightenment building for rule of law

The fate of Yao Jiaxin, a young college student who hit and then stabbed an injured victim to death, has caused ardent arguments among the Chinese public about the law and humanitarian issues. To be judged later this week, the case is already wrapped up in things other than the law.

Chinese society is experiencing a "movement of enlightenment" on the rule of law despite it having been advocated for such a long time. The process used to controlled by the government, but thanks to the Internet, judicial justice has seen unprecedented involvement of public opinion.

Just like the instructions from their superiors, the impact of public opinion on judicial justice has had both positive and negative effects. It is necessary to keep that public opinion involved in China's judicial system as it will be helpful over the long haul.

At the same time, public opinion should become more mature to better reflect on every misjudgment. For example, the case of She Xianglin, jailed for 11 years after being wrongly convicted of killing a neighbor, has been controversial.

It has to be admitted that the foundation of Chinese judicial justice is not solid and society can sometimes exert a useful impact on judicial decisions, although by no means always. The court can always reject the interference of public opinion that is sometimes "a little rude."

There must be a long-term process of interaction between the Chinese administration of justice and public opinion. If the interaction is good, the administration of justice will be more honest, more dedicated and fairer. If the interaction is not good enough, public opinion will become arrogant, trying to control everything.

The quality of public opinion is determined by the quality of the court. It is difficult for public opinion itself to keep rational and have self-restraint because part of its rationality is provided by the court. The court should dare to ignore public opinion that is too demanding, tell the truth and make independent judgments. The public might fail to understand at the moment, but it will slowly find the correct boundary between supervision and intervention.

Moreover, public opinion does not represent the people's mind. Even if it does, its accuracy and stability is often less reliable than legal logic. Public opinion cannot be above the law. For example, we should no longer say "Public anger cannot be quelled if he is not sentenced to death."

Anyone can make mistakes, even a judge, but it is important to establish the dignity of the law in China. Therefore, there is now quite enough discussion of Yao's case. Let us wait and see the judgment of the court. After the final decision, people with different views should reflect on why their opinion has "deviated" rather than continue to insist they are right.

EDITORIAL : THE DAILY YOMIURI, JAPAN

        

 

All-out efforts needed to build temporary housing

The Yomiuri Shimbun

More than 130,000 people have been forced to stay in evacuation centers, where privacy is a rare luxury, for more than a month since the catastrophic March 11 earthquake and tsunami.

The evacuees want to move to temporary housing as soon as possible, but building these units has faced considerable delays. The central government and local governments in affected areas must do more to get these construction projects up and running.

About 72,000 temporary housing units need to be built to accommodate evacuees mainly from three prefectures in the Tohoku region who lost their homes in the earthquake and tsunami. Evacuees will start moving into these units as soon as they are completed.

However, little progress has been made in arranging procedures to apply for temporary housing units. So far, just 36 units in Rikuzen-Takata, Iwate Prefecture, have become available, but there were 32 times more applicants than units available in the lottery for them held April 5.

Land, Infrastructure, Transport and Tourism Minister Akihiro Ohata said Tuesday that 30,000 units will be available before the end of May. We urge the government to make sure construction of the remaining 42,000 units is completed as soon as possible.

===

Suitable land scarce

One factor behind the delay is the lack of suitable land.

Districts battered by the tsunami are not options as building sites. Many areas are still strewn with debris and rubble. Flat land on higher ground is ideal, but suitable and available sites such as leveled public land are few and far between.

Securing building sites also was difficult after the 1995 Great Hanshin Earthquake. The Hyogo prefectural government ended up with no choice but to build many of the 48,300 temporary housing units on reclaimed land and in suburbs far from the devastated urban areas. However, there were fewer applicants than anticipated, so more than 4,000 units were left vacant.

Most disaster victims want to live in units to be built near where their homes once stood. Due consideration must be given to maintaining local communities and helping disaster victims rebuild their livelihoods. Constructing housing units in distant places should be avoided as much as possible.

Perhaps the government should consider using private property, including land used for agricultural and industrial purposes, as building sites. This would require some drastic measures, such as a temporary suspension of some regulations conventionally applied to land use.

===

Secure material supplies

Another problem is the scarcity of plywood, insulation and other materials indispensable for building temporary housing units.

Six plywood factories in Miyagi and Iwate prefectures, which accounted for about 30 percent of national production before March 11, have shut down after being damaged in the disaster.

Making matters worse, some construction companies bought up more of these materials than they needed in anticipation of a supply shortage that would push up prices. This exacerbated the material shortages.

The hoarding of building materials must not be allowed to impede construction of temporary housing. The government needs to closely monitor the situation to ensure sufficient supplies are reaching devastated areas.

Temporary housing is nothing more than a place to live for the time being. Therefore, it is essential to consider a reconstruction plan based on a long-term vision of building new communities made with homes built to last.

Tax hike necessary for reconstruction

The Yomiuri Shimbun

The nation must work hard to reconstruct and revitalize Japan after the damage caused by the Great East Japan Earthquake and subsequent tsunami. The funds needed for these efforts should be shouldered by the entire nation as this disaster can only be termed a national crisis.

The government has estimated the March 11 disaster caused up to 25 trillion yen in damage and that government spending for reconstruction would be more than 10 yen trillion.

What can the nation do to secure sufficient funds?

The government spent 5 trillion yen on reconstruction after the 1995 Great Hanshin Earthquake, mostly through the issuance of government bonds. However, fiscal conditions have worsened since then. The government can no longer afford unregulated issuance of government bonds.

Reconstruction of the disaster-stricken areas is the nation's top priority. A temporary tax hike by creating a "restoration tax" to secure funds for the necessary work is unavoidable.

According to the results of several opinion polls, 60 percent to 70 percent of respondents said they would support such a tax hike.

The government should discuss in detail the contents of the reconstruction tax and knock it into shape while drafting the second supplementary budget for fiscal 2011, which includes funds for a full-fledged reconstruction project.

===

Review handout measures

However, we would like to propose a condition.

The government and the ruling coalition should first trim expenditures of the main budget for fiscal 2011 to boost appropriations for reconstruction. This means such handout measures as child-rearing allowances must be reviewed. If the government and the ruling coalition merely try to hike taxes without reviewing these handouts, they will never be able to win public understanding on the tax hikes.

Once these measures have been reviewed, the government and the ruling coalition should carefully explain the need for the temporary tax hikes.

They should issue special government bonds to build up funds for reconstruction work and use the restoration tax to redeem them. Unlike ordinary government bonds, the special bonds will not force future generations to face a financial burden as funds will be secured for redemption of the bonds in advance.

Introduction of the restoration tax should be decided on the basis of economic factors. If this system is separated from the government's general account, taxpayers will be able to check whether the funds really are spent on reconstruction, making the tax hike more acceptable to the public.

===

Restoration tax best option

The question is where should the restoration tax come from? Temporary hikes of income and corporate taxes will place burdens only on some groups of taxpayers and would not increase tax revenues significantly.

A one percentage point increase in the consumption tax rate is expected to bring in 2.5 trillion yen in tax revenues. But the consumption tax is uniform throughout the nation, meaning people in disaster-hit areas would have to shoulder the increased burden, too.

They all have both advantages and disadvantages. But the restoration tax is aimed at making a wide range of people share the tax burden equally to support reconstruction work. If this is taken into account, the consumption tax and a few other taxes should be considered.

The earthquake and tsunami disaster has not changed the significance of a consumption tax rate hike to secure stable financial sources for social security benefits.

In discussing the introduction of the restoration tax, the ruling and opposition parties must not forget the point that this tax should be compatible with the unified reform of the taxation and social security systems.

EDITORIAL : THE DAILY MIRROR, SRILANKA

Get ready for fasting

Alea jacta est. As we have pointed out in our earlier editorials, it is rather saddening that a certain “image” had been formed about everything of Sri Lanka in the eyes of the world.

When the ICC Cricket World Cup started former Sri Lankan cricket captain Arjuna Ranatunga made an appeal requesting the Elections Commissioner to postpone Local Government elections in districts where World Cup venues had been located.

We said that it was a shame on our society that a social aberration of election violence had become a norm.

Likewise whenever there is a crime committed President asks the Police Chief to look into the matter.

Whenever there is a crisis, a politician instructs the authorities to expedite or look into the matter.

In fact, isn’t it routine responsibility of the IGP or people in responsible positions to respond to these issues. Isn’t it their job?

Now, the UN, over and above the “UN report” has publicly asked (Warned) the Foreign Affairs Ministry to “Protect its staff members”.

In fact it’s a damning statement in itself!

The newswire report goes like this:

“The United Nations on Monday warned the Sri Lankan government that it must protect UN staff, after the country's President called for protests against a UN war crimes report.

“We have made it very, very clear to the government of Sri Lanka that we take it very seriously that they ensure the security and safety of UN staff in Sri Lanka,” UN deputy spokesman Farhan Haq said.

“We have underscored that again and we want to make sure that regardless of what their positions are on the report that they abide by their obligations to the security of our staff,” Haq told a news briefing.(AFP)”

It is pathetic.

In short the UN says it knows that state sponsored violence could be unleashed against the UN members in the country. The UN can’t make forward looking statements like these. But going by our track record we can’t blame the UN either.

Does the government realize that this is exactly how the World sees Sri Lanka?

That, election campaigns invariably are violent.

That, the authorities do not do their job, so that political leaders and the President have to instruct them to investigate and take action.

That, fraud and corruption are accepted social norms and could not be eliminated. Hence many International Volunteer Organisations prefer to grant material than money in aid programmes (That way they bypass some leakage!).

Now, the UN has, by a ‘warning’ or by a request had made a damning statement on Sri Lankan society.

We are not talking about the expert panel findings, but will those in power see how we have built up an image of unruly, chaotic and violent society in the eyes of the International Community?

True enough, the International Community has no moral right to pass judgment on Sri Lanka, still shouldn’t we be ashamed of how we behave?

This is a direct result of what happened in July 2010 in front of the UN building here when an unruly politician staged a protest in front of the UN office in Colombo.

The state did not take any credible action against the leader despite his inflammatory speeches inciting violence against the UN staff. 

So much for personal security.

Despite so much of pressure, there have been no such incidents in China.

EDITORIAL : THE HINDU, INDIA

Halt work at Jaitapur

With the death of one person and injuries to several in police firing against the background of violent protests against the proposed nuclear power complex at Jaitapur in Maharashtra's Ratnagiri district, the controversy surrounding this project is all set to escalate. Some responsibility for this lies with the leading political opposition in the State, the Shiv Sena, which has spotted a political opportunity in the widespread unease among local communities in and around the proposed project area. However, the main reason for the rising tensions in Ratnagiri district is the peculiar intransigence of the State and central governments in this matter. Despite the Japanese nuclear emergency, they have dogmatically refused to put further execution of the project on hold; this is reflected in Minister for Environment and Forests Jairam Ramesh's statement last week that the project was a fait accompli. Risk theory as well as elementary norms of democratic governance suggest that nuclear power projects cannot be thrust on unwilling communities, in business-as-usual fashion. Predictably, the continuation of construction work on the boundary of the project area set off the latest round of protests.

The Japanese nuclear emergency has hardly abated. That the promised review of Indian nuclear installations has already been partially completed without any role for independent scientific expertise or public interventions suggests little willingness on the part of the central government and the atomic energy establishment to reassure the public through a transparent and thorough exercise. Even the scale of the Fukushima calamity appears to have done little to modify the insensitivity the Manmohan Singh government has shown on nuclear matters. The passage of the Nuclear Liability Act to reassure potential foreign investors in India's post-deal nuclear industry appeared to take precedence over safeguarding the interests of the Indian people; it actually happened during a countrywide stocktaking of industrial and environmental safety on the occasion of the 25th anniversary of the Bhopal gas calamity. The current attitude to the Jaitapur protests only heightens the perception that assuaging genuine safety concerns in an open, democratic fashion matters little to a government that privileges the realisation of the nuclear deal above all else. There is no question of ruling out nuclear power tout court — but there is certainly a need for a larger debate, post-Fukushima, on its role vis-à-vis other sources of energy, including both fossil fuels and renewable sources. Forcing questionable projects on apprehensive communities after a traumatic international disaster is not the intelligent way to go.

PSLV notches up another success

Buffeted by two consecutive failures of the Geosynchronous Satellite Launch Vehicle (GSLV) and the scandal that erupted over a deal to provide S-band spectrum to a private company, the Indian Space Research Organisation has been yearning for some good news to lift the morale of its scientists and engineers. It got that on Wednesday when the workhorse of India's launch vehicle programme, the Polar Satellite Launch Vehicle (PSLV), turned in another flawless performance. Well aware that it could ill-afford another launch failure, and that too of the PSLV with its impeccable record, the space agency had gone to great lengths to ensure a successful flight. The launch, originally scheduled for earlier this year, was postponed for checks on the Vikas liquid propellant engine. Lifting off from the Satish Dhawan Space Centre at Sriharikota on its 18th flight, the rocket precisely followed the planned trajectory and delivered three satellites into orbit 18 minutes later. The main payload, the earth-viewing Resourcesat-2, will provide data for a multitude of practical applications ranging from agricultural monitoring to studying snow cover and coastal zone mapping. India launched its first remote sensing satellite, the IRS-1A, aboard a Russian rocket in 1988. Many more followed, especially after the PSLV became available. India now has one of the largest constellations of remote sensing satellites in operation, supplying data to users at home and across the globe.

The PSLV was conceived as a rocket that would put 1,000-kg remote sensing satellites into orbit. After the failure of its first flight in 1993, the rocket was successfully flown a year later and has not looked back since. In the course of 17 successful launches, it has put 47 satellites into orbit, 21 of them Indian. Through a variety of weight-reducing measures and increased propellant loading, the rocket's performance has been steadily enhanced. In Wednesday's flight, the PSLV effortlessly carried three satellites that together weighed over 1,400 kg. The rocket has also proved capable of carrying out a range of missions. Apart from launching remote sensing satellites into polar orbit, it put the Kalpana meteorological satellite into a near-equatorial orbit and took the Chandrayaan-1 spacecraft on the first leg of its journey to the Moon. Three more launches of the PSLV are scheduled this year. ISRO chairman K. Radhakrishnan has promised that a launch of the GSLV will follow. Indeed, a key challenge for the space agency will be to transform trouble-prone GSLV, equipped with an indigenous cryogenic stage, into as reliable a rocket as its predecessor.

EDITORIAL : THE DAWN, PAKISTAN

Arms licences

THERE was a time when newspapers would map the journey of a gun to the individual holding it. This type of rudimentary reporting has since gone out of demand. In fact, today the occasional police references to the origins of a grenade thrown here and a bullet fired there are dismissed as remnants of an investigation routine that lags behind the dangerous times we live in. Arms are now a part as well as a way of life.

In this context, the government`s apparent need to use arms licences as an instrument to please its insecure friends is appalling. A Dawn report says that, despite a ban since January 2010, arms licences continue to be issued, providing the proud weapon-holders with a power symbol they cannot do without. Some 7,000 applications for licences sent by the interior ministry are pending with Nadra, and a senior Nadra official has confirmed the receipt of additional individual applications that are recommended by the prime minister, who has already allowed the issuance of 300 arms licences during the period the ban has been in place. The beneficiaries of his favour include retired, senior servicemen and prominent politicians and bureaucrats.

The government is estimated to have issued some 10,000 arms licences since 2008 in a country where legal arms are but a small fraction of a large heap of weapons. The news item in Dawn is bound by formalities to make a distinction between licences issued for non-prohibited and prohibited bores, whereas theoretically the ban is for all licences issued since the beginning of 2010 to be placed in the category of the prohibited. If this were not enough, the report shows the spokesman of a party which had in January filed a (now withdrawn) deweaponisation bill in the Senate defending his right to have a legal weapon — to combat the holders of illegal gadgets of destruction. His party had backed the bill in the Senate with figures of thousands of deaths caused by `illegal weapons` between 2006 and 2009. The government had found the bill rather unnecessary given there were already so many laws to deal with the issue of the spread of weapons in the country. Those who had thought that this official recognition would perhaps lead to an effective invoking of the relevant legal provisions for a fight against weaponisation must be disappointed. The government appears too obsessed with old power symbols and the security of a privileged few to be bothered about the dangers that brandished guns, both legal and illegal, pose to the people at large.

Tax evasion

PAKISTAN is a haven for those who do not want to pay their taxes. Nobody will ask any questions, let alone arrest and punish anyone for tax pilferage, even if the lifestyle being maintained is luxurious and well beyond one`s declared means. The number of people filing income tax returns has, therefore, dropped radically over the years. This year, for example, less than one per cent out of 180 million people filed their income tax returns. The non-filers comprised the country`s wealthy elite including politicians, generals, landlords, traders and others who have very intelligently kept their incomes out of the net. Little wonder then that the gap between the amount of tax owed and that of tax paid voluntarily and on time is expanding. Revenue generated through tax accounts for less than 10 per cent of the country`s GDP, one of the lowest in the world despite the heavy indirect taxation on the common people. This leaves economic survival heavily dependent on foreign aid and loans.

However, times seem to be changing now. International donors and lenders are refusing to help us unless we help ourselves. The international pressure on the government has forced it to at least think of ways to increase tax revenues to ward off a possible economic collapse. Last month, it announced it would partially withdraw tax exemptions to certain sectors. Now the Federal Board of Revenue plans to serve notices over the next couple of months to 50,000 tax evaders living a life of luxury. One hopes that the FBR will soon take steps to also bring into the tax net the rest of the 2.3 million people who have been identified as having “sufficient financial resources” but who do not file returns. If implemented honestly, it could prove to be the first such major attempt in recent years to broaden the extremely narrow tax base. The principles of fairness and equity demand that the drive does not leave out the powerful regardless of their political clout if the purpose of the exercise is to instil fear of the law in the hearts of tax evaders.

A dangerous request

THE Libyan rebel leader who wants foreign forces on his soil perhaps doesn`t realise the implications of what he is asking for. Talking to journalists on Tuesday, the Misrata-based leader pleaded for British and French forces to help the rebels in their fight against Col Qadhafi. Obviously, the Misrata leadership is desperate, because the Benghazi-based Transitional National Council is fighting its own battle and is unable to help the beleaguered Misrata pocket against the well-armed Qadhafi loyalists, who are using rockets and air power against the enemy. This is causing heavy civilian casualties, too, with the overall death toll from the civil war being 10,000 killed and over 55,000 injured. It is bad for him but good in the long run for his country that European powers do not seem willing to send their troops to Libya. While Paris has rejected the very idea of French soldiers taking part in the fighting, London has offered to send military `advisers`, who will be helping neither in arming and training the rebels nor in planning. That makes one wonder what the advisers will be there for. Meanwhile, Nato has continued its bombing runs.

Nuri Abdullah Abdullati, the Misrata rebel, said he was appealing for foreign troops on “humanitarian and Islamic principles” so that the slaughter could stop. He should know that the Arab League has already developed reservations about Nato strikes because of heavy civilian casualties, and the Organisation of Islamic Conference has not stirred itself while a massacre goes on in a member-country. A foreign military presence in an oil-rich country in the midst of a civil war will further complicate the Libyan situation, and Mr Qadhafi and his dynasty could well be the gainer. And even if the rebels win, the new regime will always have the stigma of being installed by foreign powers.