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Saturday, June 4, 2016

Everybody wins when the world invests in girls and women!

A good economy starts with healthy girls






Among the many provocative ideas that emerged from last week’s “Women Deliver” conference in Copenhagen, perhaps the most memorable was the concept that today’s most significant development is not taking the form of superhighways, skyscrapers and other massive structures, but rather the health and well-being of girls and women. And yet, it was stressed, much more development is needed in this regard.

The slogan for the gathering in Denmark – the biggest global conference on women’s health and rights in a decade – was “When the world invests in girls and women, everybody wins!”

In a video address opening the meeting, United Nations Secretary-General Ban Ki-moon declared, “It is time to put women and girls at the heart of development.”

That’s part and parcel of the UN’s Sustainable Development Goals approved by world leaders last year, aimed at ending extreme poverty and shrinking inequality.

In the modern age, women’s rights have been mooted, debated and battled over for more than a century and shared centre stage during the democratic revolution of the 1960s and early ’70s, but only now is the movement’s rhetoric – so often unintentionally exclusive to women – being replaced with a message that embraces all of society.

As Princess Mary of Denmark pointed out at the conference, the “women’s agenda” is in fact a united and unifying agenda of benefit to humanity as a whole.

And this, added World Bank Group president Jim Yong Kim, is why governments should not balk at investing money in the wellbeing of girls and women.

They are forever seeking World Bank loans to build infrastructure, he noted, and yet women “are their most precious infrastructure”.

There are good arguments backing up this claim. As an example, it is frequently overlooked that countries with more women in the workforce enjoy or are closer to achieving sustainable development. A study by McKinsey Global concluded that having as many women as men in the workforce would |add US$28 trillion to the world’s |gross domestic product every year.

Men nevertheless remain dominant in the workforce, the result of patriarchal tradition that erects barriers to full economic participation for millions of women around the planet. In underdeveloped regions the disparity routinely leads to tragic consequences, such as preventable deaths.

The mortality rate among women giving birth in Africa is one in six, compared to one in 9,000 in Europe. One African woman dies every two minutes due to preventable complications in pregnancy and childbirth.

Every year around the world 15 millions girls become child brides and as such are denied education and job opportunities. Thus they too cannot contribute to the economy.

The solution, said Jim and other global leaders speaking in Copenhagen, lies in investing in women and girls, a strategy that is crucial to meeting those Sustainable Development Goals that will benefit the entire human race. “It starts with a healthy girl,” he said, making the message as plain as could be.

Healthy girls are better equipped for education and work. Healthy young women have healthy pregnancies and are better able to be good mothers.

The simplicity of the notion doesn’t disguise the scale of the challenge beyond birth. Access to healthcare, including the full range of sexual- and reproductive-health services, must be financed and delivered. In 2014 around the world 22,000 women died while having unsafe abortions, and 80 per cent of those pregnancies resulted from lack of contraception. This too was preventable.

If women, and particularly teenage girls, can avoid unwanted pregnancy, the positive impact on their lives and thus on society is profound. Gone is a major obstacle to proper education, better economic opportunities and healthier lives. The same applies to child marriage.

Policymakers have to stop overlooking such proven arguments. Investment in the welfare of girls and women must continue to grow, especially in the areas of education and adolescent health. The return on the investment will extend beyond economic prosperity, to the happiness of society in general.


Source: The Nation/Asia News Network

Friday, June 3, 2016

This British monster paedophile defiled Malaysia's kids

Huckle pleaded guilty to 71 charges of sexual offences against 23 children aged between six months and 13 years from an impoverished Christian community in Kuala Lumpur.


Court takes over an hour to read out list of charges against Huckle


LONDON: Britain’s worst paedophile who attacked hundreds of children in South-East Asia and used the dark web to crowd-fund his abuse is facing 22 life sentences.

Huckle, 30, targeted a poverty-stricken Christian community in Malaysia, where he posed as a photographer and English teacher to win the trust of his victims’ parents.

The man from Kent took pictures and videos of himself raping and abusing young children and even a baby wearing a nappy.

Huckle bragged of the attacks in online blogs and penned a sick 60-page “handbook” titled Paedophiles & Poverty: Child Lover Guide.”

During his nine years of offending, he forced victims to pose with horrific slogans advertising his foul images, which he sold for Bitcoins on a notorious paedophile website on the dark web – the encrypted version of the internet.

As part of an international network, Huckle awarded himself “PedoPoints” for carrying out the attacks and used a paedophile crowdfunding website to finance the abuse. Between November 2013 and November 2014, he had a “score” of 1,305.

The case could only be reported now after Judge Peter Rook QC lifted reporting restrictions at the start of a three-day sentencing hearing at the Old Bailey.

It took more than an hour for the charges to be put to Huckle at an earlier hearing, in what is believed to be the worst case of its kind.

He appeared in the dock yesterday wearing a black shirt, with his long hair tied back into a ponytail and sporting a goatee beard.

The paedophile sat with his head in his hands in the dock as the court heard how he set up a website to crowdfund his sickening acts.

The charges relate to the horrific sexual abuse of 23 girls and boys aged between six months and 12 years. Some 22 victims are from Malaysia while one is Cambodian.

Huckle started abusing children after spending his gap year teaching in Malaysia in 2005.

He later returned to the region and spent years carrying out some of the most horrific abuse investigators have ever seen.

He took indecent images of a three-year-old child while staying with a Cambodian family the following year.

He then returned to Malaysia where he abused and took photographs of two sisters, aged four and six.

In 2007 he came back to stay with their family and he took up a teaching post in their village and continued to abuse the girls until his arrest.

Huckle gained the trust of a poor Christian community in Kuala Lumpur through his English tuition where he was able to use his perceived status as a rich westerner to “groom” victims and their families with impunity.

Huckle even boasted that he’d “hit the jackpot” by grooming a three-year-old girl to be “as loyal to me as my dog”.

In another sickening posting, he said it was amazing that he had stuck with the same child lover for so many years and watch her body develop from a five year old to a 12-year-old.

On the dark web, Huckle documented every step of his child abuse and hoped to make paedophilia a paying profession.

He turned to online paedophiles to crowdfund the abuse, allowing those who paid him in Bitcoins access to videos of him raping his victims.

Huckle wrote: “Impoverished kids are definitely much, much easier to seduce than middle class Western kids. I still plan on publishing a guide on the subject sometime.”

He added: ‘Would love to make a small income off selling child porn.’

Huckle was arrested at Gatwick Airport on Dec 19, 2014 when he returned to the country to visit his family for Christmas.

Police found 20,253 indecent images of children on his laptop and hard drives, many of them showing Huckle abusing children. - The Daily Mail.

Huckle’s journey of depravity


Paedophile travelled widely in Malaysia, photographing kids every step of the way

PETALING JAYA: Paedophile Richard Huckle had a penchant for photos of young children. He would not only photograph them but would also visit photography community website Trek Earth and post comments there.

Huckle, 30, went by the moniker “huckool” and his comments were mostly on pictures of young children from Malaysia, Cambodia, India, and Japan.

According to Trek Earth, its members provide photographs and useful critiques for each other and the entire Internet community.

On a picture of a boy fully clothed and another clad in an oversized shirt which covered his private parts, Huckle said in June 2005: “I did wonder about his ‘private parts’ until I read the caption, though I (personally) feel there’s little offence in natural nudity.”

On a picture of a young Indian girl half-clad in a saree, Huckle said: “This is a nice photo of someone so special to you. I have a close relationship with some kids in Malaysia, I miss them very much. Have fun with her.”

Checks by The Star showed that the last time he critiqued a photo was in August 2006 and his page was viewed 5,962 times.

Huckle also posted pictures from many Malaysian states on his account.

A quick glance shows albums of photos at the Petronas Twin Tower, the Butterfly Park in Kuala Lumpur, Pahang, Langkawi and Negri Sembilan, among other places.

He took pictures of children frolicking on the beach, titling the picture as “Perlis”.

Huckle seemed to frequent children-centric places. In a shot of an indoor roller coaster, a young girl’s silhouette can be seen, while another titled “Muslim Dance” showed a stage full of school-goers.

Similarly, another picture of a classroom with Malaysian flags showed young children in primary school uniforms. He also enjoyed photographing children from the Sunday school where he taught, with one picture showing a smiling group posing with the peace sign.

In the Travelogue section of his account, Huckle wrote: “I spent most of my time in Malaysia on my travels, living with the Indian Christian community in Kuala Lumpur. I also took trips to Port Dickson (Malaysia), Brunei, Singapore and Cambodia, meeting and making many friends along the way.” - The Star

The devil that hid in the church


PETALING JAYA: He was a monster who posed as a good, religious person.

Middle-class British boy Richard Huckle was baptised at the age of 17, visited churches, helped out at Sunday schools and was an average student when he left school.

But it was in church that he gave release to his vile side.

SkyNews said Huckle spent three months on a placement at a church in Kuala Lumpur and returned regularly to Malaysia, offering to help teach at schools and churches.

He even started to groom children while doing voluntary work in Kuala Lumpur. All the while, he was also abusing the children in the church.

In 2008, Huckle took a short English teacher training course at the British Council’s offices in Kuala Lumpur. He also appeared in a promotional video.

Huckle, 30, has admitted to a string of paedophile offences, ranging from raping babies and toddlers to girls and boys, from 2006 to 2014. His victims were aged between six months and 12 years.

SkyNews said Huckle “is one of the most prolific paedophiles ever to have been brought before a UK court”.

It was reported that Huckle filmed and photographed much of the abuse. He even shared it with other paedophiles on the Internet.

He also posted commentaries to accompany the images.

“It’s quite amazing to have stuck with the same child lover for so many years and I hope, from the images you have seen, enjoyed watching her grow.

“It’s not often in child porn you can compare the bodies of a 5yo and a 12yo that are the same girl. I’m sure I’ll have plenty more sex with (her) in the future,” Huckle wrote.

Over 20,000 indecent photographs were found on his computer when he was caught at London’s Gatwick Airport in 2014 as he came home to Britain from Malaysia for Christmas.

His arrest came after Australian authorities alerted Britain’s National Crime Agency to his crimes.

It was reported that Huckle wrote a paedophile manual called “Paedophiles And Poverty: Child Lover Guide” and also kept a series of notes in which he detailed rapes and other sex acts.

The encrypted manual was on Huckle’s laptop, ready for publication on the “dark web”.

At his first plea hearing at the Central Criminal Court of England, it took more than an hour to read out all the charges.

In January, Huckle pleaded not guilty to all 91 charges. But ahead of his trial in April, he admitted to 71 of the offences over the course of five more hearings.

According to one charge, Huckle had bragged: “I’d hit the jackpot, a 3yo girl as loyal to me as my dog and nobody seemed to care.”

He faces 22 life sentences. His sentencing will be done today.

Huckle appeared very normal, says KL pastor


PETALING JAYA: Huckle seemed like a “normal human being”, said a Kuala Lumpur church pastor.

The pastor, who only wanted to be known as Paul, said Huckle started visiting his church in 2011 but was an infrequent churchgoer.

“He came to the church off and on. Maybe only around five or six times,” said Paul.

When asked how Huckle was like, Paul described him as a “normal human being”.

“He would sometimes take pictures, but it wasn’t anything out of the ordinary,” he said.

“Sometimes when we saw things we did not like or behaviour that we did not like, we would scold him. But I can’t go into specifics.”

However, he said none of the children in the church were harmed by Huckle.

Paul said that when news broke about Huckle, he was shocked and “felt really rotten about the whole thing”.

“I will still pray for him. But that doesn’t negate his errors,” he said.

Huckle is said to have spent six years at another church in Kuala Lumpur. He taught in Sunday school, attended services and took many photographs of children.

A priest in the church said: “He hardly spent any time here (in the church). Very short period. He was in Malaysia for some years but he was hardly here (in the church).”

Huckle’s school friend, Scott Chapman, was shocked to learn that the “loner” he had known could “change so quickly”.

“He never seemed off or anything like that. He just seemed like a normal person. Just like a very, very quiet person. Didn’t really talk about hormonal things like that,” said Chapman.

Huckle’s parents sold their house and moved away as soon as they found out about Huckle’s crime.

Meanwhile, his older brother refused to speak about it to SkyNews.

“None of his family will speak about him. None of us ever want to see Richard again,” Huckle’s sisterin-law told SkyNews. Previous StoryNext Story

The ones we trust are the ones who betray us


PETALING JAYA: Paedophiles are usually trusted individuals such as teachers or spiritual leaders.

Consultant psychiatrist and a member of the Health Ministry’s mental health promotion council Datuk Dr Andrew Mohanraj Chandrasekaran said Malaysians were a trusting people.

“We assume adults who become close to children show genuine affection. It is in our culture to promote physical closeness between adults and children,” he said.

Dr Mohanraj added that paedophiles are individuals who have failed to complete the normal sexual development process.

“Paedophiles tend to dominate or control their victims to compensate for their powerlessness during their childhood.

“Sharing their exploits online is a way to get fulfilment in a twisted way – by demonstrating their power and control over their victims, and getting admiration from like-minded individuals,” he said.

Dr Mohanraj said some signs of sexual abuse parents can look out for in their children are signs of physical pain or discomfort, emotional changes like temper tantrums, becoming withdrawn or very clingy, changes in eating habits, self-harm or unexplained personality changes.

“Children can also start acting out in sexual ways because they feel it is normal behaviour, but these are actions they learnt from the abuser.

“Bed wetting, nightmares or sleeping problems are also signs that something is wrong. If parents notice several of these signs in their child, they should talk to the child or seek help,” said Dr Mohanraj.

Criminologist and psychologist Dr Geshina Ayu Mat Saat said paedophiles were mostly men and that most sexual child abuse cases involved men known to the child.

“A trend analysis of the past decade in Malaysia indicates that more than 60% of such crimes were perpetuated by the child’s father, followed by the uncle and stepfather.

“In many cases, other relatives are also victims or know of the crime, especially the mother,” she said.

She also said it was more common to find a child who was sexually abused three or four times before a report was made.

“This type of abuse by a male relative makes a child believe sexual intimacy with male family members is how men express their parental or family love to a child,” she said. The Star

‘He started with nude pix’


Child victim recalls abuse began when she was just four   

<< Something needs to be done to address paedophilia in Malaysia. Mahi Ramakrishnan

PETALING JAYA: Shy, quiet and completely withdrawn – that was Maria (not her real name), a victim of convicted British paedophile Richard Huckle when journalist Mahi Ramakrishnan first met her.

“She did warm up a bit to us, when we made it very clear that she was safe and that she could stop the interview at any time,” said Mahi.

“But when she recounted the abuse she suffered, she seemed completely numb.”

As the BBC’s local contact, Mahi received a brief from journalist Angus Crawford in late January – the channel was doing an investigative piece on Huckle, 30, who was on trial in Britain for sexually abusing children in Malaysia.

Posing as an English and Sunday School teacher, he had targeted the children of a poor community in Kuala Lumpur.

Mahi and Crawford finally traced some of the victims, and managed to convince 14-year-old Maria to share her harrowing story.

“Maria lives in a shelter. She told us that the abuse began when she was four,” said Mahi.

On the video, Maria recounts how her grandmother told her to be careful with Huckle, but as a child she did not understand the caution – until he began taking nude photos of her and her younger sister.

“There was more, but she made us agree not to share any more than that. We did find other children whom we believe were abused – one admitted that it had happened, but would not say any more,” she said.

Mahi made sure that during all her meetings with Maria, a female counsellor was present.

“After the interviews, we didn’t just want to be journalists who got the story and then left, so Angus said he would sponsor the first 10 sessions of counselling for her.

“But it is taking a lot of work to convince the caregivers and families of the victims that counselling is necessary. Mostly, they just want to forget that it happened,” she said. Mahi isn’t giving up. She will continue trying to get the kids and families on board with counselling. The journalist and filmmaker isn’t the type that shies away from ugliness.

For her documentary on child prostitution, Mahi spent time in brothels in the city.

She has written on baby trafficking and militants. But the mother of two called this “one of her most difficult stories”.

“Something needs to be done to address paedophilia in Malaysia,” said Mahi.

“I don’t condone what Huckle did, and he deserves his punishment, but who knows if he was also a victim of abuse, and how can we stop it if we don’t look at all these questions?

“Malaysia has no specific law on paedophilia. We need a sex offenders registry too.” - The Star

Tuesday, May 31, 2016

World's first Quantum communication satellite to be launched in China against hackers

China is poised to become the first country to send encoded information from space that cannot be hacked. Scientists are making final adjustments to China’s first quantum communication satellite. The project chief describes it as a revolution in communications.




China will launch its first experimental quantum communication satellite in July, according to the Chinese Academy of Sciences.

China is poised to become the first country to send encoded information from space that cannot be hacked. Scientists are making final adjustments to China’s first quantum communication satellite. The project chief describes it as a revolution in communications.

A quantum photon cannot be separated or duplicated, which means if someone tried to decode information, the encryption would change, and the receiver would know that his letter was opened by someone.

Scientists hope the new technology will protect China from future cyber issues. In 2015, cases involving information technology in China rose by more than 120 percent, according to survey by a non-profit cybersecurity institution. China plans to use its quantum satellite system to cover the planet by 2030.

On the ground, China is also building its own quantum information sharing network for use in national defense and security. At some point, China plans to connect the ground network to the quantum satellite system.

It has taken five years for Chinese scientists to develop and manufacture the first quantum satellite. In June, it will be transported to the Jiuquan Satellite Launch Center in southwest China for final preparation and launch in July., 2016

China wins space race to launch world's first 'quantum communication' satellite in fight against hackers





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Sunday, May 29, 2016

No room for an Islamic State (IS) and the racists in multiracial Malaysia

THREE issues that have surfaced over the past week have terribly disturbed me and I am sure many Malaysians who are rational, reasonable and fair-minded feel the same way. More than that, these actions are slowly eroding the Malaysia that we know.

Minister in charge of Islamic Affairs Datuk Seri Jamil Khir Baharom told Parliament that unilateral conversions are lawful and gua­ranteed under the Federal Constitution.

This writer does not know if Jamil understood what he was reading out, which was presumably prepared by an official, or if he had referred to the Cabinet papers or read up on the Federal Constitution.

There is a 2009 Cabinet directive on uni­lateral conversion and early this year, a five-member Cabinet committee on unilateral conversion also decided that no child can be converted to another religion without the consent of both parents.

The 2009 Cabinet directive also stipulated that children must follow the practised religion of the parents at the time of marriage in the event that one of them converts.

Surely Jamil must be aware of the committee because he is also a member. Among the others in the panel are Transport Minister Datuk Seri Liow Tiong Lai and Minister in the Prime Minister’s Department Tan Sri Joseph Kurup.

The other members of the committee are Tourism and Culture Minister Datuk Seri Mohamed Nazri Aziz, de facto law minister Nancy Shukri, and Health Minister Datuk Seri Dr S. Subramaniam.

Jamil and his officials cannot read the Federal Constitution – specifically the provision for conversion – in isolation.

The argument of the singular meaning for “parent” does not hold water as the Interpretation Act 1948 & 1967 clearly indicates otherwise; the term “parent” in Article 12 (4) must necessarily mean both the father and mother.

To construe otherwise would mean depriving, for example, a mother of her rights as a parent to choose the religion of her infant under Article 12 (4), if the father alone decides. In simple English, the Interpretation Act stipulates “parent” to mean plural, not singular.

The Interpretation Acts of 1948 and 1967, which generally apply to all Acts of Parliament, state that words in the singular shall include the plural. Therefore, the Constitution ought to be interpreted in like manner.

Jamil should also put himself in the shoes of other Malaysians, especially non-Muslims. He may be in charge of Islamic Affairs but he is also a leader of all Malaysians.

I don’t think Jamil will be a happy man if his spouse makes a decision without telling him, and we are not even talking about religious issues.

Lest we forget, the Federal Court has ruled that Hindu mother M. Indira Gandhi is allowed to challenge the validity of the unilateral conversion of her three children by her Muslim-convert ex-husband Muhammad Riduan.

The ruling is the culmination of the interfaith custody battle between Indira and Muhammad Riduan that began in 2009. They were married as Hindus and today, no one has been able to trace the whereabouts of Muhammad Riduan (formerly K. Pathmanathan), who had converted the couple’s three children – then aged 12, 11 and 11 months – to Islam without their presence or Indira’s knowledge, just six days before he obtained a custody order for all three in the Syariah Court on April 8, 2009.

Another big surprise last week was the Government’s decision to allow PAS president Datuk Seri Abdul Hadi Awang to table a Private Member’s Bill in the Dewan Rakyat to amend the Syariah Courts (Criminal Jurisdiction) Act 1965.

On Thursday, it was at the bottom of the day’s agenda but it was prioritized by two Federal Ministers. It came as a surprise because PAS has brought the Private Member’s Bill four times since 1995, and has never succeeded. On Thurday, Hadi got this first step.

We can be sure that Hadi will repeat his mantra that the Bill only seeks to empower the Syariah Courts and it only involves Muslims.

When tabling the Bill, he said it seeks to amend Section 2 of the Act to state that the Syariah Courts will have jurisdiction over Muslims, and in the case of offences on matters listed in Item 1 of the State List under the Ninth Schedule of Federal Laws.

He said it is also to include Section 2A, which states that in the conduct of criminal law under Section 2A, the Syariah Courts have the right to impose penalties allowed by Syariah laws related to offences listed in the said section, in addition to the death penalty.

What Hadi is pushing for is unacceptable. We live in a plural society. Those who argue that the Syariah law is only for Muslims may have missed this point – can anyone in Malaysia guarantee that crimes would only involve Muslim criminals and victims?

Many kinds of criminal acts affect non-Muslims, including rape. If we follow what Hadi is preaching – we will have to find four male witnesses of repute to testify in a rape case. Women witnesses are not accepted and we wonder where we are going to find four men of good reputation in relation to a rape case.

If non-Muslims already find that judges in civil courts are reluctant to adopt a firm stand on the civil rights of the aggrieved non-Muslim party, we wonder how the Syariah Courts can defend the interest of non-Muslims.

There cannot be a parallel criminal justice system with Muslims and non-Muslims subjected to two different laws. This is not about Islam, as advocated by Hadi and PAS, but simple common sense. But of course, common sense is not that common in PAS but we hope there will be a sense of fair play from Umno, and not the agenda dictated by the likes of Jamil. Sometimes we wonder if Jamil is really from Umno or PAS.

The third disappointment must be a speech made by Datuk Seri Ismail Sabri Yaacob, the controversial Rural and Regional Development Minister, who is well known for his communal remarks.

Last week, he reminded his listeners that Malays must unite to prevent non-Muslims from becoming Prime Minister because the Federal Constitution is silent on the racial origin of the top boss.

First of all, I cannot imagine any non-Malay aspiring to be the PM because, accept it, realistically it is not going to happen in my lifetime. It took 200 years in the United States for a black man to become president, even when the whites and blacks are mainly Christians and speak English.

But it is sad that in this age and time, Ismail is still looking inward and seeing things through his racist lens. Surely, he must have applauded when a Muslim became the first mayor of London, and for that matter, the first mayor in a big Western city.

Even in Jakarta, the capital of the world’s largest Muslim country, a Christian Chinese has been voted in as the city’s governor.

The non-Malays, especially the Chinese, are aware of their position as a minority in Malaysia. Politicians like Ismail should stop using phrases like “they” and “us” in his speeches, because we are all Malaysians.

What he has said serves little purpose, except to hurt feelings unnecessarily. A true mature Malaysian leader will talk about the strength of all Malaysians, regardless of their race and religion, coming together and not going separate ways.

As one lawyer put it aptly in his article, Malaysia is represented by at least 45% of the population who have faiths other than Islam. The important question one needs to address is the line between maintaining social stability and securing individual rights of religious practice and freedom of religion.

He further added, “this needs to be re-evaluated – where the politicisation of the Muslim rights over the non-Muslim citizens and fear mongering has had considerable effect in defining the parameters of the fundamental rights afforded to the citizen by the Constitution.”

Three months from now, Malaysia will celebrate its National Day. As we replay the old visual of Tunku Abdul Rahman raising his hand at Stadium Merdeka, let us not forget that the Alliance created Malaysia as a secular democracy.

Tunku would have been horrified at the thought of what Hadi and his PAS theolo­gians want to do with Malaysia.

He would have also reminded a few Umno leaders, who have no sense of history, that our Independence was made possible because of the unity of Umno, MCA and MIC, and that without Sabah and Sarawak, there would be no Malaysia.

So please think carefully of the hearts and minds of the rest of Malaysians who do not live in Kelantan and do not want to see Malaysia turned into an Islamic State. Let not the first brick be laid.

By Wong Chun Wai The Star

Wong Chun Wai began his career as a journalist in Penang, and has served The Star for over 27 years in various capacities and roles. He is now the group's managing director/chief executive officer and formerly the group chief editor.

On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.


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Saturday, May 28, 2016

How do we get out of the debt trap without printing more money?

The policy options open to major economies, including China, to reduce debt, before another global crisis hits


ALL of us are worried about growing global debt as a precursor to another round of crises. After the last global financial crisis, 2007-2009, global debt rose to more than US$200 trillion or US$27,000 for each person in the world.

Since 2.8 billion or nearly 40% live on US$2 per day, there is no way that the debt can ever be repaid. The bulk of debt owed by governments, banks and companies will be repaid by creating more debt.

If we are happy to create money, we should be happy to create more debt. Right?

Wrong. The right question is not the size of the debt or liability, but where is the net asset? Individually, we can always repay the debt if we spend less than what we earn, or invested in an asset that generates sufficient income to pay the interest.

Collectively, the government can always borrow to repay, because it can always tax to repay, if not principal, at least on the interest. Countries only get into trouble when they owe foreigners and cannot raise enough foreign exchange to repay their debt.


Charles Goodhart, Emeritus Professor at London School of Economics and one of the foremost thinkers on money and banking has written a series of important articles for Morgan Stanley, analysing the current debt crisis.

Emerging markets

The reason we ended up with more debt than ever is due to three factors since 1970 – the willingness of the financial sector to lend, the increase in global savings relative to investment and the demand for safe assets. Professor Goodhart attributed the structural increase in savings to favourable demographics in the last forty years – particularly as emerging markets like China increased their savings from growth in their labour force that engaged in international trade.

The increase in savings relative to investments created a global savings glut, which meant lower real interest rates.

The willingness of emerging markets to park their excess savings in advanced countries in the form of official reserves and the banks willing to extend credit at lower interest rates created the boom in financialisation. Lower interest rates encouraged speculative activity (funded by debt) rather than investments in long-term productive projects.

When the bust occurred, the advanced central banks wanted to avoid a debt implosion and added to the bubble by lowering interest rates and flooded the markets with short-term liquidity.

The quantitative easing (QE) stopped the widening of the crisis, but its initial success enabled politicians to avoid taking tough action in structural reforms. The result was further slower growth from declining productivity, even as companies and governments continued to borrow, affordable only at near zero interest rates. In short, we are in a debt trap – more debt, little growth.




Negative interest rates as a policy tool was invented by small countries like Sweden and Switzerland to discourage large capital inflows that created excessive currency appreciation.

But for the eurozone and Japan to try that would actually destroy their banks’ profitability, which is why bank shares dropped after these were introduced. If banks think they will lose money, they will cut back lending to the real sector further, negating the objective of QE to stimulate growth. Banks receiving QE funds faced the double prospect of being punished for taking credit risks and also the need to increase both capital and liquidity due to the tighter bank regulations.

Helicopter money

Helicopter money is not about central bankers jumping out of helicopters to atone for their mistakes, but about central bank financing a massive increase in fiscal expenditure – truly monetary creation on a large scale. If this happens, watch out for a rise in gold prices.

Prof Goodhart has carefully analysed the three options for deleverging or getting out of the debt trap. The first is to deleverge by swapping debt for equity, being tried by China.

This is feasible when the country is a net lender and both borrowers and lenders are state-owned entities. The second option is to use inflation to reduce the real value of debt. As the recent experience showed, getting inflation even up to target was tough to achieve.

The third option is to address collateral by inducing lenders and borrowers to renegotiate their debt or make the debt permanent. This is both painful and difficult and is unlikely to be adopted unless other options are tried.

In my view, the true result of the Bank of Japan’s negative interest rates is a tax on the older generation, because they are the ones not spending.

Japan tried Keynesian fiscal spending, which failed to sustain growth but created a huge debt overhang.

The Japanese older generation and the corporate sector keeps on saving because they are worried about the future, not surprising given an aging population and sluggish demand for exports.

So if you can’t increase the inflation tax, or corporate taxation to reduce the fiscal debt, use negative interest rates to reduce the value of savings of retirees and the corporate sector. Only Japanese savers would not revolt under such inequity.

For countries that have net savings and large public assets, like China, there is a fourth option to get out of the debt trap, and that is to re-write the national balance sheet. Most foreign analysts who worry about China’s debt overhang forget that after three decades of growth, the Chinese state has also accummulated net assets (net of all liabilities) equivalent to 166% of GDP.

That can be injected as equity into the overleveraged enterprises and banks if and only if the governance and return on assets can be improved under better management.

In the short-run, a clean-up of the over-leveraged enterprise sector and local government debt, embedded in the official and shadow banking system, will help sustain long-run stable growth. How to do this technically will be explained in the next article.

By Tan Sri Andrew Sheng who writes on global affairs from an Asian perspective.

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