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Tuesday, November 8, 2011

For sure public advocacy is here to stay, jetting the Malay psyche!

Nik Nazmi Nik AhmadNik Nazmi Nik Ahmad

CERITALAH By KARIM RASLAN newsdesk@thestar.com.my

Where in the past we would have dealt with controversial matters surreptitiously, nowadays such delicacy and tact are considered old-fashioned if not deceitful.

TO most onlookers, it would appear as if Malaysian public life had been hijacked by extremists – with Perkasa fronting ethnic nationalists and PAS’ ulama leading the religious fundamentalists.

Indeed, the notion of ‘Malay-ness’ is increasingly being determined by these two forces alone – leaving the “middle-ground” empty and forgotten.

At the same time, there’s also been a noticeable spike in identity politics as more and more people seek to define themselves according to race, religion or sexual preference – witness the Seksualiti Merdeka festival.

The once-hesitant ways in which Asians regarded hot-button social issues has been replaced in some parts by a more open, Western assertiveness.

When these two very different forces collide, the net result can be combustible. Moreover, it’s hard to see how these controversies can be resolved given the starkly opposing world-views in operation.

One thing’s for sure: we can’t turn the clock back. Public advocacy is here to stay. Where in the past we would have dealt with such matters surreptitiously, nowadays such delicacy and tact are considered old-fashioned if not deceitful – the hyper-transparent Wikileaks culture cuts all ways.

This also applies to hard-charging NGOs like PAGE who have been in the vanguard of the pro-PPSMI camp.



Looking back on the past, I cannot help but feel however that our previous willingness to live with internal contradictions and differences was also a hallmark of the “Malaysian Consensus” – basically an unwritten understanding to tolerate our country’s myriad complexities.

In essence, your private life and intellectual beliefs were your own business as long as you ‘towed the line’.
This epitomised the “middle-ground” of national politics. It wasn’t necessarily honest or straightforward, but it did steer us away from potentially destructive confrontations.

However, there are some figures who are trying to champion the “middle-ground” even though the Malaysian Consensus has to a large extent been lost.

These leaders are very important, since they act as a balancing force, bridging, negotiating and then resolving tensions between the various pressure groups.

At their best, they act as a kind of social and moral anchorage for the Malay community.

They’re definitely proud of being Malay and Muslim. On the other hand, they aren’t alarmist or defeatist like Perkasa. They refuse to exclude anyone due to race or religion and civil liberties matter to them. They also understand that politics is about discussion, debate and compromise.

Some are in PKR (Rafizi Ramli and Nurul Izzah Anwar), while others remain in Umno (Deputy Minister for Higher Eduction Saifuddin Abdullah). It could be argued that former minister turned maverick Datuk Shahrir Samad is their standard-bearer.

By certain measures MPs Khairy Jamaluddin and Nur Jazlan Mohamad also belong to this amorphous group.

They’re complemented by civil society stalwarts like the passionate activists in PAGE and the IDEAS Malaysia think-tank.

PKR state assemblyman for Seri Setia, Nik Nazmi Nik Ahmad, is this group’s most prolific and impressive writer.

Just 28-years-old, he has published his second book Coming of Age: A Decade of Essays 2001-2011. I reviewed Nik Nazmi’s first offering Moving Forward: Malays for the 21st Century in 2009 and was eager to read his second.

Coming of Age is a collection of Nik Nazmi’s writings from his student days to his unexpected win in the 2008 general elections and his on-going career as a legislator. It covers an eclectic range of topics from Islam to football.

Thankfully, Nik Nazmi’s journey has not been at the cost of his belief in the transformative power of politics. From his writings and actions, he is able to straddle both Malay- and non-Malay milieus.

Indeed – and he freely admits it – Nik Nazmi is a product of the NEP’s success in creating a viable Malay middle-class. These are confident, public service-oriented young Malays who aren’t bound by the legacies of the past.

Born of the rakyat, they have the credibility to speak with the masses.

Malaysia needs these leaders to succeed. We need them to moderate and modulate the political and moral absolutes that Perkasa and the Islamists are trying to ingrain into the Malay psyche.

As Nik Nazmi writes: “At a time when people are talking about globalisation, communalism seems to be an outdated ‘ism’. Being open-minded about the realities of the world does not mean that we should forget our roots. We should all appreciate differences in heritage. We should not look at our respective cultures as a barrier, but an opportunity to learn from one another.”

Of course, there are differences amongst this new “Malay middle-ground”, such as over PPSMI — but that is to be expected.

What is more important is for them to continue to take a clear, principled and moderate stand on the great questions of the time, and show the world that not all Malay voices are reactionary or fearful.

Related post:

Jetting into the Malay psyche!

Monday, November 7, 2011

Malaysian education heavily politicised, Quality & English standard not up to par!



Give everyone a choice in education

ANALYSIS by BADARAN KUPPUSAMY

Our education system is heavily politicised and needs to be de-politicised to offer good, simple and advancing education for all citizens – one they can be proud of.

SCIENCE and Mathematics were taught in English until all subjects switched to Bahasa Malaysia in 1970 under the national education policy.

Former Prime Minister Tun Dr Mahathir Mohamad, worried over the decline of English and the poor employability of graduates who had been taught in Bahasa Malaysia, then decided to revert to teaching the two subjects in English, beginning in 2003.

Now, the Education Ministry, under persistent pressure from Bahasa Malaysia advocates, has decided to go back to teaching Science and Mathematics in the national language.

From English to Bahasa Malaysia, then back to English and again to Bahasa Malaysia.

We should not be playing kick-ball with the lives of young students who are subjected to enormous stress by such policy changes called by special interest groups.

Parents too are subjected to horrendous pressure as policy shifts come and go at the drop of a coin.

Parents want the best for their children; they want a good, simple and advancing education that arms the children with knowledge to compete in the world and succeed.

They want their children to be on par with other societies, like in Singapore or Hong Kong, which had inherited a colonial education system but decided to build on it, rather than pull it down.

Malaysians from Johor travel by bus in the early hours of the day to study in Singapore, while their parents take courses to keep up, communicate with and help in their children’s studies.

The world has become that competitive.

There was a referendum in Hong Kong after the former British colony was handed back to Chinese sovereignty in July 1997, whether to continue in English or switch to Mandarin.

Parents wanted to maintain English overwhelmingly.

In Hong Kong today, there is a system of dual languages, where Mandarin is taught along with English, attracting an international student clientele to Hong Kong.

Parents are important stakeholders in the field of education and know better what their children should get by way of a modern education.

Democracy offers alternatives and choices. You do not shut the door on any stakeholder.

The Parent Action Group for Education (PAGE), which is fighting to retain the learning of Science and Mathematics in English (PPSMI) policy, is spot on in pursuing its goal.

While the group is strongly supported by the MCA, MIC and Gerakan – all component parties of the Barisan Nasional – many in Umno also see the promise that an education in English holds for the children.

PAGE has submitted another memorandum to Prime Minister Datuk Seri Najib Tun Razak, asking for special schools to teach the subjects in English. Najib will have to decide on the request because it is becoming a political hot potato.

Najib had said the era of “the Government knows best” had been long over. He has emphasised this several times to indicate that policymakers have to listen to all stakeholders and not go on a tangent of their own.

But his deputy Tan Sri Muhyiddin Yassin, who is also Education Minister, has said the situation would be “chaotic” if the ministry were to provide facilities for the teaching of Science and Mathematics in both Bahasa Malaysia and English.

But there are practical solutions, such as hiring Indian teachers from overseas. They have a good proficiency in English and can teach well.

Our education system is heavily politicised and needs to be de-politicised to offer a good and simple education for all citizens – one they can be proud of.

Given the chance to decide, even parents in rural areas would vote for PPSMI as it gives their children a leg up in today’s competitive world.

Our society has developed many alternatives to the Bahasa Malaysia-only policy – private education, home schooling and international schools – which the Government throws open to all.

These centres of excellence in education come at a price. They are expensive and the poor cannot afford it.

So, the rich – of all races – escape our Bahasa Malaysia-only policy, study in alternative schools and eventually move overseas to continue their education and then stay back to work and live there.

There are, ironically, Africans, South Americans and other Asians enjoying a multi-cultural education in English in Malaysia.

If we insist on teaching only in Bahasa Malaysia, we will eventually have just Bahasa Malaysia-speaking students in a society that privately offers English-language education for anyone who wants it.

An estimated one million Malaysians have left for greener pastures abroad and we are now wooing them back through Talent Corp and also offering incentives to bring them back.

Never mind if things are initially “chaotic” – it is the Government’s responsibility to provide for all its citizens.
Eventually, we should aim to democratise the cluttered and over-burdened education system that is pulling various ethnic groups asunder. We need to provide choices for all – rich and poor.

English standard of undergrads still not up to par

M. Saraswathi
KUALA LUMPUR (Nov 6, 2011): Malaysia is on par or ahead of some of the regional countries in terms of investment in education. However, the quality of its undergraduates' command of English still remains an issue.

Dr Marie Aimee Tourres, a senior research fellow at the Department of Development Studies, Universiti Malaya, said it was crucial for graduates to have a good command of English to ensure they would be able to compete effectively, in the global job market.

Nevertheless, “in terms of education spending, Malaysia is comparable to some countries in the region based on the percentage spent over its gross domestic product (GDP) growth,” she told Bernama in an interview here.

She said Malaysia was actually spending more vis-a-vis other countries.

In Budget 2012, RM13.6 billion was allocated to the social sector, including education and training, health, welfare, housing and community development.

Dr Tourres said there was also a lot of focus given for training and re-training for graduates, which was important to continuously upgrade skilled and knowledge workers in the country.

However, the quality of undergraduates remains an issue in Malaysia, since the students find it difficult to grasp the English language.

"Language is definitely an issue,” she said, citing a recent publication by the World Bank entitled The Road to Academic Excellence, which was a study on what contributes to a world-class research university.

The study compared Universiti Malaya (UM) and National University of Singapore (NUS) in a chapter entitled The National University of Singapore and the University of Malaya: Common Roots and Different Paths.

In the report, it was stated that as NUS kept pace with the demands of a growing economy that sought to become competitive internationally, with English continuing as the language of instruction and research, UM began to focus inward as proficiency in English declined in favour of the national language.

The publication, which is based on a study conducted by two scholars, Philip Altbach and Jamil Salmi, also stated that because UM taught courses predominantly in the national language, it had much more limited internationalisation of programme, academic staff and student body.

"This generation will have to face international standard and competition in terms of job market, as part of globalisation," said Dr Tourres.

She cited Pakistan as an example, where she gives lectures.

"In Pakistan, although the people speak different dialects, next to the Urdu language, their English is better than our graduates,” she pointed out.

It made them more marketable in the competitive global environment, she noted.

"The immediate result of their English capacity is that you can find many Pakistanis who work for international organisations such as the World Bank and International Monetary Fund,” noted Dr Tourres.

She believed that even if Malaysia gave more focus in English, the national language and culture could still prosper, provided that teaching was made interesting.

"More English in school will not deter Malay, Indian and Chinese culture per se. We should not mix the issue of a command of good language and the preservation of national heritage," she said.

As for the distribution of the book voucher worth RM200 to all Malaysian students in public and private local institutions of higher learning, matriculation as well as Form 6 students nationwide, she believed that it should be monitored to ensure that it served the purpose.

This assistance is expected to benefit 1.3 million students with an allocation of RM260 million.

“That is a lot of money. Probably, it could have been done based on meritocracy to ensure that it is properly utilised,” said Dr Tourres, pointing out that there were risks of students re-selling the voucher, especially when the new targeted generation lacked the reading habit and prefered to go online to search for their study materials. -- Bernama



Importance of being earnest

ON THE BEAT WITH WONG CHUN WAI

The DPM has said it would not be possible to use English in teaching Science and Mathematics. Let’s look at other options to improve proficiency in English.

WE all know and acknowledge that our standard of English has taken a beating. We all know that many of our teachers cannot even construct a sentence in English without grammatical errors, and many of them are teaching our kids the language.

We all know that many of our university lecturers are in the same boat too, as well as some of our politicians and senior government servants. For them, it is a struggle to speak in English.

A letter, presumably written by an examiner or a parent, that appeared in this newspaper’s education section last Sunday startled me. The writer made a comparison between our 2011 Penilaian Menengah Rendah (PMR) English paper and the 2011 International Competitions and Assessments for Schools (ICAS) English Reading Paper.

The latter is used to test students’ English proficiency in private and international schools, which have increasingly become the choice of urban Malaysian parents who can afford to send their children there.

Giving detailed comparisons, the writer claimed that the PMR English paper taken by our 15-year-olds is much easier than those taken by Year Four Malaysian students in private and international schools and Year Three Singaporean pupils in similar schools.

“How can we expect our local students to compete with students from other countries if the standard of English in our PMR exam is even lower than the standard of English required for Year Four pupils in private and international schools?” he asked.

In short, the PMR English paper is too easy. We have long cast doubts on the quality of our students who earn a string of distinctions. We hear grumbles that in some papers such as Physics, the grading is so ridiculously low you just need to answer a few questions to get the A, but that’s another story.

Older Malaysians – those who sat for Senior Cambridge (Form 5), Lower Certificate of Education (LCE) for Form Three, Malaysian Certificate of Education (MCE) for Fifth Formers and the Higher School Certificate (HSC) for Form Six – will vouch that the standard of English was much higher then.

The Prime Minister and his deputy Tan Sri Muhyiddin Yassin are products of the early education system which has enabled them to speak and write well in English. It is such a joy, for example, to listen to Datuk Seri Najib Tun Razak delivering a speech in crisp English.

We know that much of the Cabinet deliberations are conducted in English. So are the Cabinet committee meetings, where most ministers find it more comfortable to express themselves in English.

When they attend international conferences, one or two ministers whose command of English is described as atrocious still have to use the language, but they would just read from a prepared text.

In a tweet last week, prominent human rights lawyer Malik Imtiaz lamented the poor English in the written judgment of a Judicial Commissioner. The legal reasoning was equally bad. This is sad because the Malaysian legal system is primarily based on English common law and most students have to use English textbooks.

I have just returned from India where I attended an international conference on the advertising industry. It was a joy to listen to people there – from the emcee, former Miss World Diana Hayden, to Bollywood actor Shah Rukh Khan to leaders of the industry – speak in English with confidence, eloquence and wit and without referring to a prepared text.

These people are able to speak so well because India has not allowed its nationalists to tear down the legacy of the British education system in the name of nationalism and race. Yes, there are millions in India who can only speak Hindi or other dialects but English remains in a dominant position.

In Singapore, the medium of instruction in schools is English and to ensure that the young get the best education, teachers are among the best paid in the island republic’s civil service.

Certainly, those given the responsibility to nurture, teach and inspire young minds deserve the best, but let the best join the profession and keep out the mediocre.

The DPM has said it would not be possible to use English in teaching Science and Mathematics (PPSMI), citing possible chaotic situations if parents were given the option to decide if they wished to use English or Bahasa Malaysia.

He said some teachers were not efficient in teaching English and that it would also be hard for the Education Ministry to plan.

I think these are sound and valid reasons but we must also look for other options. It is not a zero sum game. We should not see the controversy from a “them and us” situation. Neither do we want politicians and groups to cloud the issue further by using race to silence proponents of the PPSMI.

We can introduce English Literature in schools and also increase the teaching hours in English as the next step. Even Physical Education, Art and Moral Studies classes can be taught in English.

We will go nowhere if we continue to cite lack of English teachers as the reason why we cannot move forward. The situation we are in is a reflection of the failure of our education system as far as English is concerned. It is a statement of our lack of commitment.

Let’s hire teachers and trainers from India and other Commonwealth countries, compile a data bank of retired teachers who still want to contribute, and even graduates who are keen to teach English in schools.

For urban parents, the option should not be the private and international schools. Haven’t our children been divided by the different schools they go to already? The last thing we want to do is to create a class system where the better-off go to private schools while the less privileged have to settle for national schools.

Chua: Make pass in SPM English compulsory; Malaysians should be multi-lingual by being well-versed in Bahasa, English and Mandarin

By KAREN CHAPMAN, TAN EE LOO, FLORENCE A. SAMY, CHRISTINA CHIN, HAMDAN RAJA ABDULLAH, DESIREE TRESA GASPER and REGINA LEE

PETALING JAYA: While the MCA welcomes the decision made on the Teaching and Learning of Science and Mathematics in English (PPSMI) policy, it is now calling for the language to be made a compulsory pass subject for SPM.

“We should work towards making English a compulsory pass subject in the SPM examination and also make English Literature a compulsory subject,” said party president Datuk Seri Dr Chua Soi Lek.

On the policy, he said Deputy Prime Minister Tan Sri Muhyiddin Yassin had paved the way for clear guidelines on the matter and put an end to any confusion.

In a statement yesterday, Dr Chua said the Government had listened to the voices of the rakyat in coming up with a win-win situation for all.

It was also the party’s fervent hope for the Education Ministry to emphasise the usage of English to equip Malaysians with the universal language to keep up with the rest of the world, he added.

“The MCA would like to re-affirm its stand that all Malaysians should be multi-lingual by being well-versed in Bahasa Malaysia, English and Mandarin to ensure we are more competitive in the globalised world,” said Dr Chua.

In Friday’s announcement, Muh­yiddin – also Education Minister – said the current batch of Year Two to Form Four students would continue under the policy until they complete their secondary education.

Year One pupils this year are already learning the two subjects in Bahasa Malaysia.

Speaking to reporters after attending the SJK (C) Mun Yee fundraising dinner here last night, Dr Chua hit out at the Opposition, saying it should make up their mind on the PPSMI policy and not make “flip-flop” statements.

Responding to a suggestion by PKR’s Selayang MP William Leong that there should be English- medium schools in the country, Dr Chua said DAP and PKR had previously expressed their support towards using Bahasa Malaysia to teach the two subjects.

“In Pakatan Rakyat, they have different stands. Now that the Govern­ment has allowed English to be continued to be used until 2020, they again switch.

“The rakyat has the right to know what is PKR’s policy and stand,” he said, adding that DAP’s stand was also inconsistent.

MIC president Datuk G. Palanivel said the PPSMI decision was a step in the right direction for the future of affected students.  

Taking a page from history

Sunday, November 6, 2011

Malaysian hacker jailed in US


By JOSEPH KAOS Jr  joekaosjr@thestar.com.my

WASHINGTON: A US District judge sentenced a Malaysian to 10 years in prison for hacking into the US Federal Reserve and other banks.
United States - Federal Reserve System
Lin Mun Poo, a Malaysian citizen, had admitted earlier this year to hacking into the US central bank, various private financial institutions and possessing stolen bank card and credit card numbers, officials said.

According to AFP, he also admitted to hacking into a Fed computer server and installing a malicious software code there.

Lin, who is from Ipoh, travelled to the United States in October last year “for the purpose of selling stolen credit card and bank card numbers” but a purchaser was in fact an undercover US agent, according to prosecutors.

When he was arrested, Lin held over 122,000 stolen bank card and credit card numbers.

The US Justice Department said Lin's “cybercrime activities also extended to the national security sector”, including hacking into the computer system of a Pentagon contractor that provides systems management services for military transport and other military operations.



“Today's sentence sends the message to hackers around the world that the United States is no place to conduct their business,” US Attorney Loretta Lynch said in a statement on Friday.

Dhillon Andrew Kannabhiran, founder and chief executive officer of hackers community Hack in The Box, said the stiff 10-year sentence was meant to deter hackers from hacking into government networks.

“Details of the case are not clear to me, but you can argue that 10 years for computer crime is harsh by any standards,” Dhillon told The Star.

“It's definitely a sentence which is meant to send a message.”

Dhillon said the hacker was “asking for trouble”.

Hacking is a tool. Just like a knife can be used by a chef to prepare a meal or to stab someone. It is your motives that sets you apart. People who use their skills to commit financial fraud are not hackers, but just criminals,” he said.

Lin, according to a fellow hacker, deserved his punishment.

“Most hackers have the skills to breach a computer security system. But once you use your skills for malice, then you have committed a crime,” said a computer security consultant who wished to be identified as Sam.

“If you are caught, you deserve to be punished like any other criminal.”

Sam said most people with hacking expertise, like himself, were hired by companies to “test” their computer security system.

“Most of us use our skills to make a decent, legitimate living.”

 Related post: 

China, a rising Asian giant stirs!

Globe icon.

An Asian giant stirs

BEHIND THE HEADLINES WITH BUNN NAGARA

A forum on working with China’s economy only scratched the surface of all that the re-emerging giant implies.

INFORMED comment on China cannot avoid dwelling on its phenomenal rise: what is evident is also the obvious.

China may still have minimal impact on Africa or Latin America, despite Beijing’s latest global overtures stemming largely from China’s quest for productive resources, energy supplies and markets. But in Central Asia, South Asia, Eurasia, Australasia and North America, it is becoming increasingly difficult to underplay China’s growth, much less ignore it.

In East Asia, China’s rise is impossible to overlook. In this context, the Third World Chinese Economic Forum organised by the Asian Strategy and Leadership Institute (Asli) in Kuala Lumpur during the week was themed “Linking East and West in a Globalised World”.

Where other discussions might underrate the international scope of China’s rise, the forum paid incidental attention to it. So factoids and nuggets of data floated on a sea of information exchange around a rising China.

An Indonesian participant said his country’s lack of infrastructure limited the intake of investment from China, particularly in manufacturing. But he said South-East Asia generally showed it could work with China even in the most sensitive area – finance – so the other sectors should not be so difficult.

A Thai academic offered a “soft launch” of his pet notion of an Asean-China partnership leading the rest of the world in economic recovery and growth. However, no modalities were offered for such a vast and complex project, nor were any likely difficulties cited.

A Singapore-based economist said the region would average 6% growth from next year, helped in part by China’s growth. He expected Malaysia’s GDP per capita to reach US$17,000 (RM52,896) in 10 years (the World Bank cited around US$8,500 or RM26,448 for last year). But another Singapore-based economist under-rated Malaysia’s growth for this year from a projected 5.8% to 4.7% just three days before the forum opened. This economist’s pessimism even found a possible decline to a low of 3.8%, which suggests economists hardly ever agree.

A Singapore delegate said the city state wanted to be the “conduit” for investments between China and the rest of Asia. This presumed an exceedingly close relationship between Singa­pore and China, which is yet to happen; guangxi or mutual comfort levels for steady business deals in China remains important.



Among the original five Asean countries, Malaysia is known to enjoy the highest comfort level with China, contrasting with Singapore and Indonesia. From the Suharto years onwards, Singapore and Indonesia were the last of the five to normalise relations with China, in a move led by Malaysia in 1974.

Yet Singapore has the highest proportion of ethnic Chinese, so it is not a racial issue. Nonetheless, the seeming anomaly continues to perplex analysts and policy advisers everywhere, even in China.

At an earlier conference in Shanghai, it fell on me to try to explain it. I suggested the situation resembled Taiwan’s, and it suddenly clicked: on one level being tied psychologically and strategically to a US military presence in the region, and on another level to sovereign sentiments of an island entity that is a geographical, historical and political offshoot of a mainland on which it still depends.

It was in such a strategic framework that the thrust of this year’s World Chinese Economic Forum implicitly came to be embodied in its final session. The key speaker here was Tun Dr Mahathir, who was credited for doing more to improve Malaysia-China relations than any other Malaysian leader.

He emphasised the promise of vastly growing economic relations with a rising China while rejecting the doomsayers’ fears of any prospective Chinese hegemony.

He said the country’s experience of China over 2,000 years had been a mutually happy and beneficial one, including the times when China was clearly a major world power.

Since China’s role in disputed maritime territory remains visible, Dr Mahathir expressed a preference for peaceful methods of settlement such as negotiations and arbitration. He recounted several cases settled through the World Court, with Malaysia winning the case with Indonesia and then losing it with Singapore.

Inevitably, all disputes need to be settled peacefully, and China and Asean countries seem agreed enough on that. Whatever their differences, it should be evident enough to all that there can be no military solution to political and diplomatic disputes.

An economic forum’s ambit is naturally economic matters, even if that left major political issues under-discussed. These would have to be taken up on other occasions, perhaps by other institutions and participants.

For the rest, there remain numerous areas for fruitful cooperation with China. Among these is renewable energy (RE), where Germany is particularly involved and is already working on with China.

However, some misunderstanding remains across borders. An Australian delegate wanted to know why there was a contradiction between China’s continued use of vast amounts of fossil fuels and its apparent interest in RE.

An explanation of sorts was given, but without touching on the central issue. The fact is that China’s economic growth is so vast and determined, and so dependent on energy consumption, that it cannot afford to choose between different forms of energy.

Growth is more than just economics for China, since it also spells political credibility and social peace. It is anxious that it may continue to need more energy than it can access, so it uses any and every form of energy it can.

As a consequence, it has become the world’s largest producer of solar and wind energy. A Chinese automotive company, BYD, is determined to be the world’s largest producer of electric automobile batteries.

In the process, China is said to be seeking to invest in RE abroad, partly to reap the benefits of new technology for national application. Prospective partners may take a number.

Saturday, November 5, 2011

Global recession grows closer as G20 summit fails in disarray, Europe stumbles on through debt fog!



G20 ends in disarray as Europe stumbles on through debt fog

Greg Keller
The G20 summit ended in disarray without additional outside money to ease Europe's debt crisis and new jitters about Italy clouding a plan to prevent Greece from defaulting.

In Athens, Greece's prime minister survived a confidence vote in parliament early on Saturday morning, calming a revolt in his Socialist party with a pledge to seek an interim government that would secure a vital new European debt deal.

In the end, only vague offers to increase the firepower of the International Monetary Fund - at some later date - were all the eurozone leaders were able to take home Friday after two days of tumultuous talks.

Greece's PM George Papandreou (R) and Finance minister Evangelos Venizelos smile after winning a vote of confidence.
Greece's PM George Papandreou (R) and Finance minister Evangelos Venizelos smile after winning a vote of confidence. Photo: Reuters

With their own finances already stretched from bailing out Greece, Ireland and Portugal - and the United States and other allies wrestling with their own problems - eurozone countries had been looking to the IMF to help line up more financing to prevent the debt crisis from spreading to larger economies like Italy and Spain.

Italy's fate in particular is crucial to the eurozone, because its economy - the third-largest in the currency union - would be too expensive to bail out. The implications for the world economy are stark: The debt crisis that has rocked the 17-nation eurozone threatens to push the world economy into a second recession.

European leaders could point to one potential catastrophe averted: They stared down Greece's prime minister and berated him into scrapping a referendum that threatened their European bailout plan. Greece's politics are in upheaval as a result, but the shaky bailout plan appears back on track - for now.

"We want Europe to work," French President Nicolas Sarkozy said on French TV when the summit was over. "I think today we can have confidence ... but that's not to say our troubles are behind us."

In the end, the Greek question completely derailed Sarkozy's aim of using the summit to show that Europe had sorted out its debt problem once and for all - and possibly convince some of them to pitch in to the rescue effort.

In the space of days, the already shrunken list of goals set out by France to close out its year as head of the G20 was scrapped, replaced by a nearly constant stream of shocking new developments and reversals in Europe's long-running attempt to get control of Greece's debt crisis.

That reality was perhaps best illustrated at the height of the summit on Thursday evening, when hundreds of journalists dropped what they were doing in the basement of Cannes' Palais des Festivals and gathered around television screens to watch a live transmission from the Greek parliament in Athens, where Prime Minister George Papandreou was speaking.

The week of unending drama in Athens horrified its European partners, spooked global markets and overshadowed the summit in Cannes. The threat of a Greek default or exit from the common euro currency has worsened the continent's debt crisis.

When the week started, Europe had finally reached an intricate, ambitious and fragile deal to try to rescue Greece and stop the crisis from spreading any further. The G-20 summit was supposed to solidify and clarify the deal and get the world economy back on the right track.

Then on Monday night, Papandreou shocked his European partners and domestic allies by announcing he would put the plan to a referendum. Markets panicked, as did many of the leaders coming to Cannes.

Sarkozy and German Chancellor Angela Merkel held a series of frenzied meetings, then summoned Papandreou on Wednesday. If you lose this referendum, you could lose the euro, they told him. And they froze a new (euro) 8 billion ($A10.66 billion) loan that Greece will soon need to pay government salaries.

On Thursday, Papandreou backed down and abandoned the referendum. The U-turn left his 2-year-old government teetering.

Now Europe's leaders may find it is impossible to take back the shocking admission by Sarkozy and Merkel that an exit by Greece from the eurozone was no longer unthinkable.

And even as US President Barack Obama, Chinese President Hu Jintao and other leaders struggled to make sense of the Greek drama's fast-shifting plot, another flashpoint emerged in Italy.

Market confidence in Italy's ability to reduce its public debt and spur growth in its anemic economy has withered over recent weeks as the government weakened. MPs have defected to the opposition and some of Prime Minister Silvio Berlusconi's ministers have openly suggested the government's days may be numbered.

Market fears mounted on Friday in the wake of the confusion about Greece. Italy's benchmark 10-year bond yield jumped 0.32 of a percentage point to 6.43 per cent, indicating a surge in investor worries about the country's ability to repay its debts.

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Global recession grows closer as G20 summit fails

Cameron tells eurozone member states to solve their own problems. Link to this videoA world recession has drawn closer after a fractious G20 summit failed to agree fresh financial help for distressed countries and debt-ridden Italy was forced to agree to the International Monetary Fund monitoring its austerity programme.

Financial markets fell sharply after the two days of talks in Cannes broke up in disarray, amid concerns that Italy will now replace Greece at the centre of Europe's deepening debt crisis.

UK hopes that the Germans would relent and allow the European Central Bank to become the lender of last resort for the euro were also dashed.

On a day of unremitting gloom and yet more market turbulence, the Greek prime minister, George Papandreou, won a late-night confidence vote in his parliament after making a speech in which he promised to start powersharing talks to form a caretaker coalition government. Although he won the vote by 153-145, he is now expected to step down and a national unity government is expected to take over in the coming days.

Papandreou said he would visit the country's president on Saturday to launch power-sharing talks "with the [opposition] parties … for the formation of a government of broad co-operation."

In a sign that the spread of the debt crisis to Italy could break up the single currency, the chancellor, George Osborne, admitted the Treasury was undertaking crisis planning for a eurozone collapse.

The G20 deadlock led David Cameron to issue one of his starkest warnings about the impact on the UK economy, saying: "Every day the eurozone crisis continues and every day it is not resolved is a day that it has a chilling effect on the rest of the world economy, including the British economy.

"I am not going to pretend all the problems in the eurozone have been fixed. They have not. The task for the eurozone is the same as going into this summit. The world can't wait for the eurozone to go through endless questions and changes about this.

"We, like the rest of the world, need the eurozone to sort out its problems. We need more to happen in terms of detail on the European firewall."

Cameron hinted at worse to come, describing this as only "a stage of the global crisis".

There had been hopes that the G20 would agree to increase IMF resources by as much as $250bn to more than $1tn, but disagreements about the wisdom of it, structure, size and contributors to the fund left world leaders forced to pass the issue on to a meeting of G20 finance ministers next February.

The French president, Nicolas Sarkozy, had been eager to flourish a figure both to reassure the markets and to top his chairmanship of the G20.

Cameron revealed the friction, saying: "The very worst thing would be to try to cook up a number without being very specific about who is contributing what. If you cannot do that, it is better to say the world stands ready to increase resources to the IMF as necessary."

In the financial markets an early rise in share prices was reversed after it became clear that divisions in the G20 would prevent a deal in Cannes to boost the firepower of the European financial stability facility (EFSF) or the IMF. The yield on 10-year Italian bonds rose from 6.2% to 6.4%, the highest since the euro was founded, raising fears that the country would face problems financing its huge debts.

Obama, under pressure from Congress, was deeply reluctant to contribute to an expansion of IMF funds without clearer signs that the eurozone was sorting out its problems. Admitting that he had been given a crash course in European politics, Obama urged Greek and Italian parliaments to take decisive action to control their deficits and combat what he described as some of the psychological origins of the crisis.

He also urged the euro area to start putting some resources into the EFSF, which Europe hopes to turn into a bailout fund with at least €1tn to deploy.

But the German chancellor, Angela Merkel, said: "There are hardly any countries here which said they were ready to go along with the EFSF."

Berlusconi was summoned to a late-night hotel meeting with Merkel, Sarkozy, the IMF director general, Christine Lagarde, and Obama, where he was told that the IMF was to start monitoring to ensure tough austerity measures are implemented. The measures include changes to the labour market, pension reform and the sell-off of state-owned assets.

Italy has debts of €1.9tn, or 120% of GDP, and if it followed Greece down the path towards a financial bailout, or default, the impact on the European banking system would be vast. Italy faces new tests in further auctions of its debt this month – it has to raise €30.5bn in November and a further €22.5bn in December.

Sarkozy denied that the demands on Berlusconi represented an IMF coup, saying: "We never wanted to change governments, either in Greece or in Italy. That is not our role, that is not our idea of democracy, but it's clear that there are rules in Europe and if you exonerate yourself from these rules you exclude yourself from Europe."

Berlusconi, facing defections from his own party, insisted he had invited the IMF to offer advice. Berlusconi said on Friday he had rejected an offer of funds from the IMF – "I don't think Italy needs that" – and said his country was more solid than France or the UK.

British officials privately admit that potential economic collapse in Italy is now the single biggest concern gripping world leaders. One said: "We cannot have the Italians meeting in crisis every three days. We need some action."

The UK government will now focus on urging its European partners to make progress, and will continue to support extra cash for the IMF. Cameron said he would not need UK parliamentary approval for this as the Commons has already agreed to an increase that would cover the proposed UK additional contribution.

The EFSF has €440bn ($608bn) available to lend, of which roughly half is expected to be consumed by bailouts of Ireland, Portugal and Greece. Italy has nearly €2tn in debt outstanding.

The European Central Bank has purchased Italian debt since August, but will not carry on doing so indefinitely. The need to bolster the EFSF has led the EU to pursue countries outside the euro zone with surplus cash, such as China. 

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