EDITORIAL : THE MOSCOW TIMES, RASIA

No More Privatization Scams

At last week’s St. Petersburg International Economic Forum, Russia’s new round of privatizations was one of the hottest topics of discussion. A host of liberal economists and analysts claimed that this new round would result in higher competition and efficiency for the companies — something that previous privatization efforts were never able to do.

Liberal economists who have blind faith in the free market consider themselves to be highly rational people, but experience shows that they adhere to certain irrational beliefs just as strongly as savages believe in their rituals and incantations. For example, they believe that privatization is beneficial at any time or place and under any conditions, and that states everywhere are bad managers by definition.

Ordinary Russians have their own strong reasons for opposing the transfer of prime state assets into private hands. They remember how the hasty privatizations in the 1990s were a complete disaster. Everyone remembers how they led to looting and destruction of the economy and family households, the effects of which are still being felt 15 years later. While the government has spent much of the last decade trying to dig itself out of the enormous pit that the 1990s privatizations created, it seems to be headed directly down the same path, bound to repeat the same mistakes.

Perhaps the worst mistake is trying to privatize during a crisis. This can be accomplished only if the state sells its assets at fire-sale prices — even lower than they are now. (The Russian stock market has dropped nearly 30 percent over the past 15 months.)

Russian companies have always been heavily undervalued in comparison with similar foreign companies. Since the companies must be sold for rubles, part of the earnings will be lost if the value of the ruble continues to fall. Under such conditions, the seller is effectively subsidizing the buyer.

To make matters worse, often the new private owners are unable to manage the company effectively and ultimately turn to the government for help — especially during an economic crisis when state coffers are already squeezed. The new owners’ favorite argument is that their firms are too large, strategic or socially important to be allowed to fail.

In the electricity sector, in particular, there is no guarantee that private companies will be able to improve conditions for consumers. Most likely, the opposite will happen. A private owner unregulated by the government can always raise its rates. Americans still remember the California energy crisis in 2000 and 2001 that was caused by private companies manipulating energy supplies and prices. But Russian officials have learned absolutely nothing from both foreign and domestic experience in this area.

The government still has a little time left to come to its senses and hit the brakes, but the desire to rapidly privatize the oil and gas and energy sectors is gaining force. That would be more than just a bad decision. If the authorities choose to return to the privatizations of the “wild ’90s,” they will anger the millions who were swindled by the corrupt schemes. Alienating this huge segment of the Russian population is the last thing the Kremlin needs, particularly when the protest movement is gaining momentum and supporters.

EDITORIAL : THE KOREA HERALD, SOUTH KOREA

Patients held hostage

Doctors are threatening to stop treating patients in protest against the government’s plan to introduce a mandatory fixed-rate system for seven illnesses starting July 1.

Ophthalmologists have already declared they will not perform any cataract operations during the first week of next month, asserting that the new plan would cause a significant drop in the quality of their services. 

Obstetricians, orthopedic surgeons and otolaryngologists have also decided to temporarily stop conducting some of the six operations to be brought under the new pricing formula ― C-sections, hysterectomies, appendectomies, hernia operations, hemorrhoid surgery, and tonsillectomies.

The four groups of individually practicing doctors said they would announce their final stance on June 19. They are seeking to persuade their colleagues at general hospitals to participate in the collective action.

On the surface, the doctors oppose the government’s plan because it would make them unable to deliver enough care to their patients. The real reason is, however, that it would reduce their income. 

As such, the doctors’ protest is nothing more than a misguided attempt to hold patients hostage to protect their vested interests. Hence their unwarranted action should be met with stern punishment.

The Ministry of Health and Welfare has defined the doctors’ planned strike as illegal and made it clear that it would suspend the licenses of the physicians and hospitals that refuse to treat patients.

The doctors’ opposition to the ministry’s plan makes no sense, given that a fixed-rate pricing scheme has in fact been in place for a decade. In 2002, the ministry launched a “diagnosis-related group” payment plan, under which a uniform price was set for each of the seven above-cited surgical operations.

Although the system has been operated on a voluntary basis, more than 70 percent of the nation’s medical institutions are currently participating in it ― a fact that testifies to its viability. 

Based on the 10 years’ experience, the ministry now intends to make the DRG system compulsory for all hospitals ― first for clinics and small hospitals starting next month and then for large general hospitals a year later.

The primary merit of the DRG approach is that it can discourage doctors from providing unnecessary treatments to their patients. Under the current National Health Insurance system, doctors are paid for each service they offer to a patient. Hence they tend to increase the amount of care to maximize their income. The obvious problem with this tendency is that it drives up health care costs.

A fixed-price system compels doctors to reduce the volume of care because their hospitals can earn a profit only when they lower the cost of care below the uniform price.

For this reason, doctors argue that the DRG approach could lower the quality of medical services. But this argument is not based on evidence. A government study of the DRG system has found that it lowered medical costs by 14 percent without causing a significant drop in the quality of care.

Given the relentless upward spiral in health care costs in Korea, the fixed-rate pricing system should be implemented as planned. Physicians are strongly urged to give up their ill-advised strike attempt as it poses a grave threat to patients’ health. They should play a role in bringing down rising medical expenses.
(Dated-14/06/2012)

EDITORIAL : THE BANGKOK POST, THAILAND

Failure of leadership

So Thailand has missed the US-imposed deadline for an answer to the request by US space agency Nasa to use the U-tapao airbase for a climate study project known as the Southeast Asia Composition, Cloud, Climate Coupling Regional Study.

The cabinet on Tuesday declined to make a decision and passed the buck to parliament instead.

But by the time parliament convenes to debate the issue, it will already be too late for Nasa and it is very likely that the project in Thailand will be cancelled.

Nasa's project coordinator Hal Maring earlier said: "After that date [June 26], we will not have time for the extensive logistical preparations required for a flight campaign of this magnitude".

Prime Minister Yingluck Shinawatra told the media after the cabinet's decision on Tuesday that all government agencies concerned and even the military were fully aware of the benefits to be gained from the Nasa project.

But because of the suspicion raised by the opposition that the project might put national security at risk, the government decided to refer the matter to parliament for consideration for the sake of transparency.

The prime minister said Thailand would lose the opportunity to develop weather forecasting capability if the project was cancelled, which is a pity.

Many other people are just as disappointed about the lost opportunity which the decision represents, among them scientists and climate experts.

The public in general may not feel disappointed because most of them know few details of the project.

Foreign Minister Surapong Tovichakchaikul said ministers concerned, such as Defence Minister ACM Sukumpol Suwanatat and Science and Technology Minister Plodprasop Suraswadi, informed the public of the issues involved.

What the two ministers did was tell the media about the benefits of the Nasa project. But there has never been a proper explanation of the project and its consequences for weather forecasting or climate matters from the experts.

The government and the opposition appear to be fully aware of the benefits that Thailand stood to gain from the project. So how come they could not agree to put aside their petty politicking and allow the project to go through, even just this once?

It the Democrats really appreciate the benefits of the project for the country, they should have made it clear to the government that the project could go ahead and that they would not find fault with the government later on. Any doubts about whether the project has implications for national security or sovereignty could be settled in parliament later on.

The decision represents not only a lost opportunity for the country. It was also a chance for the prime minister to demonstrate her leadership, but she failed.

If state agencies and the military agreed the project would help the country, why didn't Ms Yingluck press ahead first and confront the opposition in parliament later on?

In so doing, she would be able to rely on public support as shown in a recent Abac poll which found a majority of respondents wanted the project to proceed.

Deputy Prime Minister Chalerm Yubamrung told the cabinet that it was the fate of the country to sacrifice the Nasa project to spare the government from possible opposition criticism. But the big question is how much more the country will be made to sacrifice or suffer, for the sake of the politicians?

EDITORIAL : THE AUSTRALIAN, AUSTRALIA

NSW teachers need a lesson

LET'S get this straight. NSW state school teachers, who last week launched a charter about "Putting Students First", were on strike yesterday and will continue to strike "for as long as it takes" because they don't want greater autonomy for finance and staffing devolved to local principals, who best understand their schools' needs.

As parents of 750,000 children struggled yesterday to cope with the inconvenience, they could only wonder about the politburo mentality of the NSW Teachers Federation for fighting to keep its members under the heel of a one-size-fits-all centralised bureaucracy rather than embracing the chance to exercise their professional judgment for the benefit of local schools.

The teachers' campaign is out of step with the tide of their profession, in which autonomy is also being shifted to independent state schools in Queensland following similar moves in Western Australia and Victoria. Devolution of decision-making has served the independent and Catholic school sectors well and should help build stronger state school communities, especially as principals select teachers best suited to their schools' needs. Earlier this year, the Grattan report analysing the success of school systems in Singapore, South Korea, Hong Kong and Shanghai highlighted the importance of increasing principals' responsibility, noting: "Increased autonomy for both school principals and teachers was important for implementing reform of teaching practices . . . For sustained behavioural and cultural change, people benefit from some control."

It was no coincidence, given the centralised structure of the NSW education bureaucracy, that the state's public schools reaped such poor value for money compared with all sectors in all states from the federal BER extravaganza, recording the highest cost per square metre for the smallest facilities and prompting more complaints than all other states and authorities combined. The problem, in NSW and other states, including Victoria, was over-centralisation of decision-making and the imposition of cookie-cutter designs with scant regard to the needs of individual schools.

The O'Farrell government is right in devolving responsibility to principals. However protracted and shrill the union campaign, Education Minister Adrian Piccoli must remain determined to see the process through.

Debate raises hopes then leaves the nation all at sea

AT 2.45pm yesterday, when the House of Representatives usually is a robust theatre of political debate, it was hushed into a tense, introspective and, perhaps, contrite silence.

The Liberal spokesman for border protection, Michael Keenan, was reflecting on a journey to Christmas Island to examine the scene and circumstances of the 2010 tragedy that saw about 50 asylum-seekers killed as their boat was dashed against the jagged rocks of Australian territory. Parliament was acutely aware of the deaths of up to 90 people in another disaster last week, and the rescue operation under way yesterday as a boat foundered north of Christmas Island. Mr Keenan spoke of the goodwill and best intentions on both sides of the House -- as indeed did many members from all sides. As he spoke about the trauma of lives lost, he choked up a number of times, pausing to hold back tears. And there was not a sound. The entire chamber was moved, even shamed, into silence with him, as MPs focused on the horrific unintended consequences of inaction.

At times, yesterday's debate highlighted the best of our parliament. After a week when some have hurled shameful allegations about the motivations of others, a series of MPs spoke eloquently about the desire of all parliamentarians to uphold Australia's borders as well as our standing -- to provide sufficient deterrence to people-smugglers while offering sufficient compassion to genuine refugees. No one who has criticised the usual partisan point-scoring of question time could fairly criticise the tone or substance of the debate that took its place. The contributions were heartfelt and cogent, and seemed to genuinely recognise that this dilemma presents no easy solutions.

Ostensibly, the debate focused on independent MP Rob Oakeshott's private member's bill to provide an attempted compromise by allowing for offshore processing in Malaysia and Nauru. But, in fact, the debate canvassed the tortured history and difficult choices of border protection policy, bringing a decade of political posturing back to some clear choices presented in the here and now.

Yet the question all sides must ask themselves -- especially Labor, which dismantled the successful measures it inherited -- is why it has taken this long to bring the issue to a pivotal debate. The Prime Minister said she wanted to ensure "no one won, no one lost", and rather, simply, that "we got something done". Surely we have endured too many warnings, too many boat arrivals and too many tragedies to have reached this point only now. Most Australians had every right to expect the 2010 tragedy would be the last straw, but we now know at least four subsequent maritime disasters have taken more than 200 lives. Still, however belatedly, yesterday's renewed focus on this issue was welcome. But all of this will amount to nothing if our parliamentarians refuse to coalesce around actions a majority can support. By refusing an opposition amendment to restrict offshore processing to countries signed up to the UN Convention on Refugees, the government rejected bipartisan support for Nauru, as well as an increase in the humanitarian intake to 20,000 refugees. Instead, the bill is set to founder in the Senate, leading to more inaction. Around the nation, there will be much stunned silence.

Leave Slipper case to the courts

TURNCOAT MP Peter Slipper, who has stood aside as Speaker, was always destined for oblivion at the next election without the alleged intervention of irate Liberal National Party figures in Queensland. The sexual harassment case brought against Mr Slipper by adviser James Ashby looks murkier than ever with Labor claims that Coalition figures, including Howard government minister Mal Brough, colluded to "bury" Mr Slipper as payback for defecting and to unsettle the ALP minority government, claims Mr Brough denies.

Mr Brough, who was a talented indigenous affairs minister, has long been regarded as the ideal LNP candidate to replace Mr Slipper in Fisher. But it remains to be seen how much of the dirt being thrown sticks to Mr Brough and whether it jeopardises his chances of preselection in the safe Sunshine Coast seat, resulting in a foolish own-goal for the Coalition.

Allegations about Mr Ashby's contacts with prominent LNP figures before he lodged his sexual harassment suit against Mr Slipper are a bad look and show poor judgment on the part of those involved. In themselves, however, Federal Court documents released on Tuesday do not prove that the case brought against Mr Slipper was part of a conspiracy to sink his career. Nor does News Limited journalist Steve Lewis's text message allegedly stating "We will get him" or LNP president Bruce McIver's admission that Mr Brough approached him searching for a job for a Slipper staff member who in April proposed launching a harassment case against the Speaker.

Whatever the political implications, such points do not detract from or add to the legal issue at stake, which is Mr Ashby's claim that Mr Slipper recruited him for the purpose of forming a sexual relationship and made explicit and inappropriate sexual approaches in person and via telephone texts.

Both sides of politics must step back and allow justice to take its course. At this stage, Labor frontbencher Anthony Albanese would be hard-pressed to prove his claim that Coalition MPs were "up to their necks" in a conspiracy. Australia's chief law officer, Attorney-General Nicola Roxon, should also know better than to offer public political commentary on the case. Even when the political implications from court cases might be significant, the separation of powers must be respected.

EDITORIAL : THE JAKARTA POST, INDONESIA

Leaving behind black holes

The mass media paid hardly any attention to the finding of the Supreme Audit Agency (BPK) that nearly 140 coal mining companies had neither submitted reclamation plans nor deposited guarantee funds for reclamation work in their mining areas, as required by the 2009 mining law.

BPK member Ali Masykur Musa, who revealed the auditor’s finding when he delivered the 2010-2011 audit report on the Energy and Mineral Resource Ministry on Monday, warned of the big risks to the environment if such flagrant breaches of the law were not firmly dealt with.

 Even more alarming, Musa added, was that the number of such recalcitrant mining (mostly coal) firms was probably much larger because the findings were based on the agency’s audit work on mining companies selected at random in only three provinces in Kalimantan.

The 2009 mining law clearly stipulates the obligation of mining companies to submit five-year reclamation plans and post-mining work plans when they file applications for mining licenses from regional administrations to ensure that they will not simply leave behind giant black holes after exploiting all the proven reserves in their concession areas.

The law also requires mining companies to put up guarantee funds so that the regional administrations can assign the reclamation work to third parties in case the miners themselves are not able to implement the reclamation plans to restore the ecosystems in the post-mined areas.

The central government issued in December 2010 Government Regulation No.78/2010 which provides technical details on reclamation plans such as annual budgets and implementation schedules. The main objective of the reclamation is to restore post-mined areas to their original ecosystem. 

 After the enactment of the 2009 mining law, it is regional administrations (provinces or regencies) that are responsibible for enforcing the provisions on reclamation because most mining licenses are now under their jurisdiction.

But as the finding of the state auditors has shown regional administrations have freely awarded mining licenses even though the applicants have not submitted well-designed reclamation plans, nor deposited guarantee funds.

Regional administrations seem to have been sucked into a competition to issue as many mining licenses as possible in order to raise as much taxes as possible without due considerations for the severe damage to the land and the environment if post-mined areas are not properly reclaimed.

Thousands of coal mine licenses have been issued over the past seven years, notably in Kalimantan, and the country has become the world’s sixth largest producer of thermal coal with an annual output of over 330 million tons. 

Mining has played an important role in the country’s economy as the country holds major deposits of oil, gas, copper, gold, nickel, coal, silver, diamonds and base metals. 

The findings of the state auditors, however, show how the stipulations on the reclamation of post-mined areas have simply been ignored by regional administrations and mining firms.

The coal-mining boom will inflict severe damage on the environment, leaving behind giant, arid, black holes if the mining operations are not properly supervised with the strong enforcement of the forestry, environmental, spatial and mining laws. 

Even though the regional autonomy and mining laws have devolved the authority of mining licensing to regional administrations, the central government, through the Energy and Mineral Resources Ministry, is still responsible for ensuring that all laws relating directly or indirectly to mining activities are strongly enforced.

EDITORIAL : THE DAILY TRIBUNE, THE PHILIPPINES

Towering Babel

Noynoy’s government, more specifically, his administration is a big, big joke but one that doesn’t make Filipinos laugh.
There doesn’t seem to be any coordination or even communications among the officials of his government — including Noynoy and his spokesmen, as clearly, Malacañang and its aides have turned itself into a virtual Tower of Babel, where everyone talks but nobody seems to understand what the other is saying, or has said.
If one still remembers the biblical account taken from the Book of Genesis, following the Great Flood, generations upon generations spoke only one language which was naturally understood by all — until they decided to build a tower reaching the heavens, but God saw what they did and went down to earth to confound their speech, scattering the people and confused their languages, leaving Babel because God confounded the language of all the Earth.
The difference of course is that even as Malacañang  and Noynoy are supposed to speak the same language, Noy and his officials prefer to cling to babbling Babel, confusing and confounding the Filipino people and even other peoples of the world.
Just what kind of government do the Filipinos have under Noynoy Aquino that it doesn’t seem to get anything right — including the so-called intelligence reports from several intelligence agencies, both police and the military, along with the civilian intelligence agencies, as well as the Malacañang intelligence agency — and to think that tens of billions of pesos are poured into the government coffers for intelligence work.
Does anyone in his administration ever even get to brief Noynoy with accurate reports, or is it a question of his wanting not to be bothered by officials who give him the bad news, that the same officials have to come up with tall tales that make things more embarrassing, as Noynoy has that penchant for quickly coming up with conclusions without any basis at all?
But it really has become much too embarrassing before the world that the Noynoy government officials, all attached to Malacañang and Noynoy, cannot even get their stories right.
Take the big blunder of the Department of Foreign Affairs (DFA) that claimed the Chinese government has pulled out all its boats from inside and outside of the lagoon, following an “understanding” with the China. That was announced on a Monday by the DFA.
Tuesday, the Philippine military announced that there were still some 28 Chinese vessels, in and out of the lagoon at Scarborough Shoal — which is a direct contradiction of what the DFA claimed.
In an obvious bid for the DFA to save face, its spokesman claimed that the Chinese ships must have returned, when in fact the ships never left the shoal at all.
Now Malacañang says it will be sending Philippine boats to the shoal to show that the shoal is Philippine territory.
The point really is, if there were continuous communications between bureaus and departments, as well as communications among intelligence agencies, such an embarrassing blunder would not even have occurred. But apparently, the DFA wants to give Filipinos and the know nothing president the impression that things have been fixed up between China and the Philippines over the issues of the standoff and sovereignty.
But isn’t that just too dumb, considering the fact that such statements can be checked out for their veracity and then found to be a lie?
Naturally, the DFA will stick to its story of the Chinese ships having returned. Yet if the DFA’s tall tale of there being an understanding and commitment between China and the Philippines to withdraw all the vessels from the shoal, why then did the Chinese vessels even “return,” if the DFA claim has any basis at all?
The country is really looking stupid with department officials contradicting each other to the point where government credibility is clearly losing out — and fast.

EDITORIAL : THE NEW STRAITS TIMES, MALAYSIA

In search of sustainability

It is not surprising there was no concordance or anything substantive at Rio+20

  AT  the end of the Rio+20 United Nations Summit on Sustainable Development to mark the 20th anniversary of the Earth Summit, which took place in the same city in 1992, a 49-page document titled The Future We Want was released.

But as it did not provide any specific timetables or achievable goals, many green groups were scathing about the conference attended by more than 45,000 participants from 190 countries. The responses from people like Felix Finkbeiner from  Plant for the Planet, who blasted the text as "a long, 49-page blah", and Bo Normander, European director of Worldwatch Institute, who dismissed it as " a long list of platitudes and feeling-good rhetoric", reflected the dismay of the disappointed environmentalists at the "squandered opportunity" to "set the world on a path towards sustainable development", as World Wide Fund for Nature director-general Jim Leape put it.

Barbara Stocking, chief executive of Oxfam, was quite right to say "they came, they talked, but they failed to act". But then again, as "sustainable development" has no specific meaning beyond "development that meets the needs of the present without compromising the ability of future generations to meet their own needs", it is not surprising that there was no consensus on anything substantive at Rio+20. What is clear is that developing and emerging countries did not want to commit to phasing out fossil fuel subsidies or to the levying of taxes on financial transactions to tackle climate change.

This is not surprising as poorer nations will not willingly accede to binding rules that dictate how they should develop. Certainly, the watered-down proposals to protect the world's oceans, for instance, were not what Greenpeace wanted. But as what green non-governmental organisations want is not necessarily what developing countries need. It is just as well that this was just another talk shop, as far as the rest of the world is concerned. One thing is certain: one size does not fit all and there is nothing sustainable about trying to hold back development. The way forward, said Malaysian Palm Oil Board chairman Tan Sri Shahrir Samad, is "balanced economic development with environmental protection".

So, while activists like Greenpeace International executive director Kumi Naidoo may slam Rio+20 as a "failure of epic proportions", this is hardly a consensus view. Indeed, for people like Alan Oxley, chairman of World Growth, a group that promotes palm oil, the outcome of the summit was "a welcome surprise" as it delivered the message that "environmental problems must be tackled in ways that promote growth, trade and business".

Warring on graft

The government's anti-corruption campaign is the most intensive ever

 CORRUPTION, and the inequalities and injustices that flow from it, was undoubtedly a factor in the Arab Spring. Those who risked life and limb in Tahrir Square, Cairo, among the masses in the rest of the Middle East, were fed up with the wrongs of the Mubarak regime's decades-old dictatorship. Nearer to home, the same can be said for the toppling of Indonesia's President Suharto in 1998. Rampant corruption and abuses of power made for a disquiet that few ordinary citizens could take, especially on empty stomachs, and tolerable to even fewer of the middle classes. While Malaysia never faced the same level of unhappiness, the prime minister recognised corruption's ill effects on society and the economy as he generated a comprehensive policy that would address it in holistic fashion. Graft-busting was elevated to a priority of considerable importance.

The government of Datuk Seri Najib Razak has made fighting corruption an integral part of the two-pronged National Transformation Policy (NTP). A National Key Result Area (NKRA) high on the list of the Government Transformation Programme (GTP) -- one half of the NTP -- the effort is spearheaded by the Malaysian Anti-Corruption Commission (MACC). Armed with a carefully structured strategy, the MACC is tasked with being seen to eliminate all corrupt practices. Towards this end, three facets have been forwarded: judicial reforms that include a special anti-corruption court to facilitate prosecution; an Integrity Pledge and Integrity Pact from both government-linked companies and private companies; and, public education. The MACC, an independent body, works with the people, the private sector and other stakeholders to achieve the desired end. Both hard and softer approaches have been incorporated into the anti-corruption crusade.

On the one hand, the rigorous Integrity Pact acts as an incentive for companies to abjure kickbacks when bidding for government contracts by giving them a shortlist advantage. On the other, so as to encourage those individuals with knowledge of acts of corruption to come forward, the Whistleblower Protection Act 2010 was enacted. Crony relationships will be broken by competition. The sum total of these, part of the three pillars against corruption, is that all parties benefit, a fact manifest in the World Bank's "Doing Business Report" that has ranked Malaysia ahead of major Western economies as a country where doing business is easy. For the population, no corruption means no economic leakages and a fairer allocation of resources all round. However, what is most pertinent is the government's political will that has set in motion a relentless mechanism to end corruption in high and low places alike.

(Dated-27/06/2012)

EDITORIAL : THE GUARDIAN, UK

Coalition politics: double trouble

This is only the beginning of a combative period of differentiation between the governing parties

There is an old political cliche trotted out by loyal foot soldiers who don't want to admit in so many words that their government is in a terrible hole. It takes the form of a lament for the feebleness of the presentation of what might otherwise be a perfectly serviceable policy. But even those who delighted in attacking the hapless junior treasury minister Chloe Smith for incompetence after a Newsnight mauling from Jeremy Paxman, heartless hammer of the incoherent, would struggle to explain exactly why the 3p rise in fuel duty is being deferred until January, and how the £550m in foregone revenue is to be made up, and quite what that means for the coalition's founding purpose of cutting the deficit. Plenty of cheesed-off backbenchers in both parties will have looked at Tuesday's borrowing figures, £3bn higher than for May last year, and wondered why it was all still worthwhile.

The publication of the Lords reform bill, the jewel in the coalition crown for the Lib Dems, will have come as a huge relief, all the more so since it came accompanied by muscular noises-off from the prime minister addressed to potential Tory rebels, making it clear defying the whip would be an ill-advised career move.

Hints of an alliance between anti-reform Tories and Labour backbenchers opposed to this particular set of proposals have been squashed, at least for now – although the gap between the bill's publication and royal assent remains immeasurable. But this is the only event of the past week that feels as if it had made it on to the Downing Street grid through the normal planning processes. Look at the record: from Michael Gove's O-level revival to David Cameron's welfare speech and George Osborne's 11th-hour reversal on fuel duty (after a series of colleagues had been sent out to defend it), the impression at Westminster is of a government firing off with only the most random of intentions. The education secretary revealed his plan to reintroduce two-tier 16-plus exams in the columns of the Daily Mail, apparently without even discussing it with the prime minister, let alone Nick Clegg. The chancellor's announcement on fuel duty was kept from the cabinet and he left his junior ministers without a proper briefing. And the question of how the prime minister chiselled out the time in the packed Number 10 diary to make a major speech on welfare has bemused old Downing Street hands. Indiscipline or disorganisation, this sequence of events does the government no favours.

Of course, coalition is an unfamiliar political form, as much for its participants as the voters. The parties are still feeling their way. In a commentary on progress so far published this week by the Constitution Unit, it scored well on key indicators like trust at the top and capacity to take big decisions. The findings might have been more cautious after the past week. Yet the biggest challenge is party management within the coalition's confines. That's why, historically, coalitions rot from the bottom up. Prospects for this one are the more difficult because the unifying project of an economic turnaround within lifetime is in jeopardy. Analysing the seemingly unconnected announcements of the past few days in this context at least provides a pattern. So, for example, angry Lib Dem reaction to Mr Cameron's second-term welfare proposals on Monday was at least partially mollified by the suggestion that the answer to the question why this speech, now, was that it was red meat for Tory backbenchers that would help to buy off opposition to Lords reform; it was hinted that bringing back two-tier 16-plus exams was really the education secretary beginning to mark out his pitch for a future leadership contest (something Mr Gove's aides strongly reject). And by deferring the increase in fuel duty, George Osborne was not so much playing tactical politics but actually embarking on a discreet process of economic stimulus. Well, maybe. What is clear is that this is only the beginning of a combative period of differentiation between the governing parties that will make the next two years very difficult indeed.

Barclays bank: too big to obey the rules

It needs to be uncovered just how far this market-fixing went - this has all the makings of systemic scandal

"There was a period of remorse and apology for banks, and I think that period needs to be over," Barclays' boss Bob Diamond declared last year. Not if Wednesday's news is anything to go by, Mr Diamond, not by a long way. The bank yesterday agreed to pay fines totalling £290m to British and American authorities, to settle charges of market rigging. The £60m it will hand over to the Financial Services Authority alone is the biggest penalty ever levied by the City watchdog – yet the nature of the alleged transgression is so fundamental, so serious and, according to officials, so "widespread" that it appears utterly inadequate. Nor will the decision of Mr Diamond and his team to apologise and forfeit this year's bonuses take the sting out of the matter.

What regulators appears to have uncovered is a scam at the heart of a £350tn market; one that ultimately affects how much families pay on their tracker mortgages, as well as the costs of transactions for big City institutions. It should not be settled with a fine, no matter how large, but must be followed up with a further investigation into Barclays – making public just how many employees took part (rather than yesterday's mentions of Trader C and Manager E), and how they will be punished, up to and including criminal proceedings. Not only that, but it also needs to be uncovered just how far this market-fixing went. Certainly, the clear implication of yesterday's comment from the Commodity Futures Trading Commission that Barclays' staff "co-ordinated with and aided and abetted traders at other banks" indicates that Mr Diamond will not be the last chief executive in the firing line over this issue.

Strip away the acronyms and the charges against Barclays are straightforward. Its traders and senior management are accused of tampering with two key interest rates to bolster their own profits. And they apparently did this not once, but repeatedly over four years. Indeed, the practice seems to have become so widespread that staff joke about it in emails: "Always happy to help, leave it with me, Sir."; "Done … for you big boy"; "I love you". This from the bank that earlier this year held citizenship days for its staff – and which, through state guarantees and emergency provisions of liquidity, has been supported by the British taxpayer.

There has been much talk about banks being too big to fail, or too big to bail. The picture presented by Wednesday's charge sheets is altogether simpler: throughout boom and bust, Barclays staff saw themselves as being too big to play by the rules. And the likely result is that everyone else paid millions more than necessary to borrow. What's more, they do not look like the only ones: this has all the makings of systemic scandal.

In praise of … Nora Ephron's essays

Her essays are readable three decades on - she can eviscerate and self-deprecate, but her humour always wins out

Few of the hundreds of books churned out by journos each year escape the pulp mill. That could be because they are yesterday's news. Or because there could be something even more ephemeral about the all-knowing, God-like persona too many of us adopt. Nora Ephron's essays are readable three decades on, even though their subjects are long forgotten. Name checks are few and far between for the cast of characters in Reagan's administration, let alone Richard Nixon's. But Ephron's writing lingers. She can eviscerate ("Washington is a city of important men and the women they married before they grew up"), as well as self-deprecate ("I have made a lot of mistakes falling in love, and regretted most of them, but never the potatoes that went with them"). But humour always wins out ("I always read the last page of a book first so that if I die before I finish I'll know how it turned out"). Ephron was many things, not least a great essayist.

EDITORIAL : THE GLOBAL TIMES, CHINA

Take wait-and-see approach to US sanctions


Today marks the deadline of the US requiring other countries to stop making oil deals with Iran. Many have promised to cut imports of or stop buying oil from Iran so as to become exempt from US sanctions. China is so far the only big country that has not been granted a waiver. It will be interesting to see if the US piles sanctions on China's State-owned enterprises (SOEs) which still have oil deals with Iran. 

China is unlikely to compromise with the US. Firstly, a large percentage of automobiles on China's roads use oil from Iran. Secondly, China adopts a friendly policy toward Iran. 

Only a UN resolution can restrain China's stance toward Iran. Being a big country, China should maintain this bottom line. 

But the US' influence is obvious. Its financial sanctions can harm Chinese companies. Confronting the US with a tough attitude is not the best choice for China. It's right for China to remain low-key in declaring its stance. Over the Iran issue, there is a distance between verbal declaration and real actions.

Similarly, the Obama administration does not want to punish China seriously because it will put the US economy at great risk. China has its own advantages. Once the US slaps sanctions on China's SOEs, some American companies in China will bear the consequences.

Obama knows full well that he should make a show of taking a tough attitude toward Iran to win the coming presidential election. But if a trade war occurs at this point, it also means the end of his political life.

The Chinese government should deal with the US' demand perfunctorily. China should neither collide with Obama nor promise anything to the US. Next, China should take it easy. If Washington launches large scale and substantial sanctions against China, it can only respond with countermeasures. It is a troubling, even annoying scenario. But if China cannot avoid it, it should face it squarely. The consequences of US sanctions may not be as fearsome as we had thought. 

Many large State-owned companies have big investments in Iran. But a few SOEs are seemingly more conciliatory than the government. Some have stopped or cut trade with Iran. In this major issue, SOEs should support the national stake, not prioritize their own interests. 

The teeth in Washington's sanctions largely rely on its control over the global financial system. When the sanctions are imposed, money transactions to Iran from overseas will be extremely difficult. Oil tanks carrying Iranian oil will not be able to find insurers. 

Financial sanctions are choking Tehran. China needs the wisdom and strong will to respond to US sanctions. It cannot launch countermeasures until it feels ready. Besides trade, China needs substantial growth in financial power to resist US sanctions.

If Washington is compelled to find faults with China, it will be of no help to fear it. This is the philosophy China should have in dealing with the US.






Growth, fairness not mutually exclusive


In recent years, Chinese people's demands for more social equality have dominated public opinion, along with people's soaring requirements on livelihood and mounting dissatisfaction with the wealth gap. This has pushed China to invest more in public welfare. 

But at the same time, the emphasis on development seems to be ignored. Public opinion is shaping a perception that the country is wealthy enough and substandard public welfare is a result of unfair distribution. 

Once it is resolved, a solution will be found to the primary problems regarding public welfare.

Unfair wealth distribution does deserve strenuous efforts from the government, but it should not eclipse the importance of growth. Livelihoods cannot be improved by distribution reform alone. Stable and continuous development is the driving force of reform.

Chinese society before reform offers a good comparison. Life was fair, but people were poor. The later reforms in both rural and urban areas firstly set to break the old mindset of fair distribution. Work-based payment was adopted as a new measure of social fairness.

Three decades of fast development have resulted in overwhelming apathy toward the income gap today. There are various reasons for this. However, China cannot stop its development for the sake of fair distribution, but should create a mechanism to coordinate between growth and distribution.

This is a daunting challenge and many countries have suffered from this nagging issue. Emphasizing efficiency alone could lead to recurring social turbulence. 

But countries, long stuck in a debate over the fairness of distribution, would also miss growth opportunities. Many developed countries have bitter memories of this. 

True sustainable development has to be based on social fairness. It is also an essential political environment for China. Otherwise, development will be fragile and it will be difficult to tell how long it can last. 

China has created a growth miracle. It now needs a miracle of creating new social fairness. The most important thing is to strike a good balance between the two ends.

China's population is almost double the total of the West. Improving the livelihood of the Chinese population cannot simply be done by a slogan or a policy. It requires much detailed planning and coordination. We also need good luck.
(Dated 27/06/2012)

EDITORIAL : THEDAILY YOMIURI, JAPAN

3 main parties must ensure reform bills pass 

upper house

The Yomiuri Shimbun

The House of Representatives passed bills on integrated reform of the social security and tax systems at a plenary meeting Tuesday. This marked a significant step toward the nation's fiscal reconstruction and social security reform.

The set of bills--with an increase in the consumption tax rate as the centerpiece--was approved by the ruling Democratic Party of Japan and its junior partner, People's New Party, and also by the two main opposition parties, the Liberal Democratic Party and New Komeito.

We applaud the fact that nearly 80 percent of lower house legislators voted for the bills on the consumption tax increase.

The nation's political parties should ensure the bills pass the House of Councillors. This will require breaking free from the kind of politics that has prevented leaders from making hard decisions.

It was disappointing that as many as 57 DPJ lawmakers--mostly from groups led by former party President Ichiro Ozawa--voted against the consumption tax hike bills.

If 54 or more DPJ lawmakers leave the party, the ruling coalition would lose its majority in the lower house and become a minority government.

The ruling party's effective breakup over the bills is proof that its executives lack leadership skills.

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Take action against rebels

Prime Minister Yoshihiko Noda will face more hardships in managing his administration if the ruling coalition becomes a minority government. While preserving his party's agreement on the reform bills with the LDP and Komeito, Noda should urgently rebuild the DPJ, which has been dysfunctional as a ruling party.

Deciding how to deal with Ozawa and other dissidents should be his first step.

When Ozawa's supporters held a meeting after the vote, they agreed to leave their next move in Ozawa's hands. "I'll have to make a decision soon," he reportedly said.

Ozawa apparently aims to shake up Noda's administration further with an eye on leaving the DPJ to form a new party.

On the surface, Ozawa insists that top priority should be placed on issues related to people's daily lives--a phrase the party trumpeted in its manifesto for the 2009 lower house election. Dig a little deeper, however, and it seems he is only interested in ensuring his and his group members' survival with an eye on the next lower house election.

Former Prime Minister Yukio Hatoyama also voted against the consumption tax increase bills, saying the issue was not among the policies proposed in the manifesto. Hatoyama acted as if he owned the DPJ when he then said he would not leave the party.

Hatoyama himself should seriously reflect on his role in misleading the public by promoting the impractical manifesto.

The DPJ's immature and vague policymaking process was not the only factor behind such a large number of lawmakers joining the rebellion. Part of the blame can be laid with Secretary General Azuma Koshiishi, who hinted before the vote that the party would give only lenient punishments to members who defied the DPJ leaders.

The DPJ has never expelled members just because they rebelled against the party's leadership in voting. However, passage of the comprehensive reform bills is something that Noda declared he would stake his political life on.

As a condition for his party's cooperation in Diet deliberations on the reform bills, LDP President Sadakazu Tanigaki called on the DPJ leaders to strictly punish the dissenting lawmakers.

Noda expressed his intention to come down hard on the rebels. We think the DPJ top brass should impose severe punishments as soon as possible. In particular, it does not need to show any restraint in dealing with Ozawa, who has gone as far as suggesting he will establish a new party.

The DPJ's relationship of trust with the LDP and Komeito will be undermined unless it takes definite disciplinary action against the rebels. The possibility cannot be ruled out that further revolts will occur during upcoming votes in the upper house.

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Tripartite cooperation significant

At a news conference after Tuesday's vote, Noda said: "We can no longer keep passing debts on to future generations. Securing stable fiscal resources for social security programs and getting the nation's fiscal conditions back on a sound footing is the point of carrying out the integrated reform."

State debts, including those accruing from the issuance of government bonds and borrowings, amounted to about 960 trillion yen as of March 31, 2012. This is more than 7.5 million yen for every person in Japan. Furthermore, the social security budget will record a natural increase of 1 trillion yen a year as the population continues to age.

It is obvious to everyone that state finances cannot be sustained by borrowing more money to pay off debts.

Noda was forced to reshuffle his Cabinet twice this year. This is one example that shows his clumsy management of the government. But on the issue of integrated reform, he has pushed ahead without flinching. He should be lauded for this.

It is undeniable that Noda could not have come up with a scenario for legislating the reform bills without the cooperation of the LDP and Komeito.

The two opposition parties joined talks with the DPJ on revisions of the bills even though there was no guarantee the lower house would be dissolved for a general election, and voted for the bills. This was a wrenching choice for the parties to make. The LDP and Komeito, it can be said, displayed a responsible attitude befitting parties that held power for many years as a coalition government.

There are still hurdles to overcome before the final passage of the bills. But they will clear the Diet if the DPJ, LDP and Komeito maintain their "partial coalition."

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Electoral reform urgent

In the upper house, discussions must be deepened on more efficient budget spending, such as cuts in social security benefits, as well as how to lift the national economy out of deflation. To help low-income earners, who will be affected more acutely by a consumption tax increase, introduction of reduced tax rates on some items should be studied.

The three parties must tackle other pending issues in addition to the integrated reform bills. It will be necessary to pass a special bill for the issuance of deficit-covering bonds.

Reform of the lower house electoral system must not be left on the back burner. The disparity of vote values between some constituencies under the current system has been judged by the Supreme Court as being in "an unconstitutional state." However, no concrete steps have been taken to rectify this situation, which can only be described as dereliction on the part of the ruling and opposition parties.

In cooperating with the LDP and Komeito, the DPJ should give priority to correcting the vote value disparity by quickly implementing a plan to cut single-seat constituencies from five prefectures without increasing seats in other prefectures.

(From The Yomiuri Shimbun, June 27, 2012)

(Jun. 28, 2012)

Noda must suppress rebellion in vote on integrated reform

The Yomiuri Shimbun

Under the current divided Diet, political progress is only possible when the ruling and opposition parties agree. If fiscal rehabilitation and social security system reform can be achieved at the initiative of the Democratic Party of Japan, the Liberal Democratic Party and New Komeito, it would be a hugely significant development.

Bills on integrated reform of the social security and tax systems--with an increase in the consumption tax rate as the main pillar--will finally be put to a vote in the House of Representatives plenary session Tuesday afternoon.

Prime Minister Yoshihiko Noda commented on the agreement among the three parties on revisions to the bills at a lower house special committee to deliberate them.

"We've managed to overcome our different stances and agree on issues that clearly divide public opinion in two. This was a big step forward," Noda emphasized.

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Rebellion within DPJ

The bills will undoubtedly pass the lower house, where they are backed by the three parties and others. The ruling and opposition parties must ensure the bills pass the House of Councillors to make them into laws.

It took a long time to forge a consensus and reach this point. DPJ executives went to great lengths to coordinate support for the bills within their party.

Despite these efforts, a considerable number of DPJ lawmakers, who should be supporting the prime minister, have showed their intent to rebel during the vote--the final stage of the process. We think this is extremely regrettable.

Former DPJ President Ichiro Ozawa has been trying to unite his supporters with an eye to voting against the bills and forming a new party. He reportedly told close aides they can win the next lower house election only if they vow "no tax hikes and no nuclear power plants."

If Ozawa actually said this, his actions are nothing but maneuvers in a power struggle that will invite a national crisis.

The problem will arise when 42 or more DPJ lower house members, including Ozawa, leave the party.

If they link up with Kizuna Party, which was formed by a group of former DPJ members who split from the party late last year, they will have enough numbers to submit a no-confidence motion against the Noda Cabinet.

Former Prime Minister Shinzo Abe has suggested that if Ozawa leads the submission of a no-confidence motion, the LDP must consider voting for it.

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Don't nullify 3-party agreement

The LDP and Komeito would be left in an awkward spot if they have to respond to such a motion. If the motion passed the lower house before the integrated reform bills clear the upper house, and the lower house is dissolved for a general election, the three-party agreement on the bills would be nullified and the strenuous efforts to make a deal would all go down the drain.

This situation must be avoided by all means.

Noda told a meeting of DPJ lower house members: "If we keep kicking the can of reform down the road, this country will collapse. We shouldn't run away from a national crisis; rather we should face up to it. I'd like to make such politics a reality." He called on the DPJ lawmakers to stand together and vote for the bills.

We believe that not every member of the groups led by Ozawa and former Prime Minister Yukio Hatoyama aim to topple the Cabinet. Many of them must be aware of Japan's critical fiscal situation and the necessity of rebuilding the nation's social security system, and thus are thinking about voting for the bills.

Noda and DPJ executives including Secretary General Azuma Koshiishi should do everything in their power to persuade every DPJ member to vote for the bills. The strength of the Noda administration will be on the line when the bills are put to a vote.

(From The Yomiuri Shimbun, June 26, 2012)

(Jun. 27, 2012)

Can an Islamist-led govt coexist with Egypt's military?

The Yomiuri Shimbun

Mohammed Morsi, the candidate fielded by the Muslim Brotherhood, was declared the winner Sunday in the Egyptian presidential runoff election held earlier this month.

Electing their own president in their first free election following the region's "Arab Spring" revolutionary democracy movements is a historic achievement for the people of Egypt, a great power in the Middle East and North Africa.

But it remains to be seen whether Egypt's democratization will prove successful. This is not only because there is no affinity between Islamism and democracy, but because the Supreme Council of the Armed Forces (SCAF), the interim ruler of the country, may not relinquish power.

The extent to which Morsi will be able to advance democratization while avoiding confrontation with the military remains uncertain.

Morsi gained about 52 percent of the vote, just ahead of his rival, former Prime Minister Ahmed Shafiq. The rise in the power of Islamism in the aftermath of the collapse of the former Egyptian regime led by Hosni Mubarak continued in the presidential election. But nearly half of Egyptians are still anxious about the Brotherhood.

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Islamism vs secularism

After being declared the election winner, Morsi said, "I am a president for all Egyptians," thus emphasizing his stance of giving consideration to secular elements. He also said he has respect for the military.

The statements apparently reflect his intention to overcome the nation's polarization into Islamism and secularism.

But the road to this goal will be a rocky one.

In the first place, the SCAF has greatly restricted the authority of the president's office. In addition, Morsi's support base is weak.

The SCAF has dissolved the country's parliament, in which the Brotherhood was the dominant force. The SCAF has issued amendments to a "constitutional declaration" that is equivalent to a provisional constitution, thereby grabbing powers over legislation and the appointment of those who will draft a new national charter. This will make it possible for the SCAF to intervene in the process of formulating a new constitution.

These developments will considerably delay a real transition to civilian control.

But it is to be noted that one factor behind the difficulty in creating a new constitution is that the Islamist forces themselves failed to smoothly select drafters of a charter in the parliament.

===

Mutual concessions vital

Whether Islamist forces and the military can make concessions to each other to work toward an early formulation of a new constitution is the key to progress in the country's democratization.

The Egyptian economy is in dire straits. Last year's political upheaval directly impacted tourism, a major industry of the country, and led to a drop in foreign investment. The country's foreign exchange reserves dropped sharply. The military administration has been holding talks with the International Monetary Fund to obtain financial aid.

If Egypt is to restore public safety and reconstruct its economy through international assistance, it is essential for the president-elect and the military to cooperate with each other.

Islamist forces have been on the rise in Arab countries where long-ruling autocrats have been overthrown. Will democratization move ahead after all in Egypt? How the Morsi-led government will turn out is a crucial test for the future of the region.

(From The Yomiuri Shimbun, June 26, 2012)

(Jun. 27, 2012)