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Monday, August 14, 2006

EDITORIAL/LEADER
World powers must not let Lebanese ceasefire fail



   
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   Guns should fall silent across Lebanon today as a UN Security Council-negotiated ceasefire to bring almost five weeks of fighting between Israeli troops and Hezbollah guerillas takes effect. There is no guarantee that this will happen, of course - rebels are by nature disrespectful of authority and Israel has vowed to answer threats against its civilians with brute force if the truce is not immediately respected.
That stepped-up battles greeted UN Secretary-General Kofi Annan's announcement of the resolution on Saturday could be interpreted as boding ill for peace; he had, after all, coupled the speech with a suggestion that the sides lay down their arms immediately to respect the spirit and intent of the decision.


Such pessimism should be put aside, however, because although the ceasefire has been called to stop the killing of Israeli and Lebanese civilians - more than 1,000 of whom have died already - the ramifications are of a far wider nature. At issue is the credibility of the security council.

For this reason, none of the council's permanent members - Britain, China, France, Russia and the US - can afford to have the truce fail. For the sake of their desire to ensure global stability, they must see the resolution carried out to the letter.

That means bringing the ceasefire into effect as quickly as possible and putting 15,000 foreign peacekeepers and an equal number of Lebanese troops into place in southern Lebanon. Israel must pull back its forces to Israeli territory and the Lebanese government must ensure that Hezbollah militias are disarmed and neutralised. Then, a process to bring permanent peace to the region must begin.

In the weeks leading to Saturday's resolution, such resolve was mostly lacking. Vested interests, disagreement and an absence of will marked the council's initial inaction. Only when international outrage at the loss of civilian life and destruction of Lebanon became overbearing did council members move towards the agreement that they should have swiftly come to at the outset.

Such behaviour is shameful for an organisation claiming to promote the peace and stability of the world's people. While under the UN's watch, hundreds of thousands of lives in Israel and Lebanon have been destroyed or disrupted. Lebanon, a nation that has experienced too much hardship through civil war and conflict with Israel, must again be rebuilt.

With its resolution, the security council has shown that it is not entirely toothless. Now, for the sake of its worth in international eyes, it must do its utmost to ensure the Israeli and Lebanese governments and Hezbollah comply and move towards a lasting peace.

The world's most powerful nations have no choice other than to make their pledge become reality: they owe it to the innocent people in Israel and Lebanon caught up by procrastination and inaction.

http://focus.scmp.com/focusnews/ZZZZM34LQQE.html

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Tuesday, August 15, 2006

CRISIS MANAGEMENT
How to avoid a public backlash


ANTHONY CHEUNG
   
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The Hong Kong Observatory was criticised for not issuing the No8 signal when Typhoon Prapiroon battered the city this month. Critics said the weather office put public safety at risk: the winds reached over 200km/h in some parts of the city, piles of shipping containers were knocked down at terminals and more than 600 trees were flattened.

Director Lam Chiu-ying defended the observatory's decision not to issue the top level of public warning on scientific and rational grounds.

However, public sentiment was hostile; some even called for his resignation. This is not the first time that the decisions of professionals in government departments have been challenged by the public. During the outbreak of bird flu in 1997 and the severe acute respiratory syndrome epidemic in 2003, both the Department of Health and the Hospital Authority were blasted for their perceived slow reaction. Despite local misgivings, however, Hong Kong was praised by the world health community for performing well in combating bird flu.

Following the Sars crisis, the Hospital Authority was blamed by its own review panel for relying too much on the traditional, evidence-based epidemiological approach, which required full, "hard" data before confirming the state of the outbreak. The panel called for greater weight to be given to "soft" intelligence in order to overcome mental hurdles created by established practice within the medical profession.

Professionals' reliance on hard data may sometimes prevent them from taking a more flexible approach to a situation.

Two lessons can be drawn from this. First, there is no doubt that professional authority is no longer treated as sacrosanct. With the popularisation of knowledge, ordinary people with good educations are prepared to challenge the decisions of experts. The media, too, is keen to expose flaws in professional views and actions.

Second, professionals in government have to recognise that handling public affairs is both a science and an art. Policy decisions must be evidence-based and rationally reached. However, public perceptions and expectations should also be part of the equation. Crisis management often fails simply because of poor communication and different ways of thinking between officials and citizens. But there is no reason why professional excellence must necessarily imply inadequate political good sense.

In Hong Kong, a typhoon signal is not just a scientific indicator. Decades of typhoon signals have conditioned people and businesses alike to use them as the sole guide to behaviour. Thus it's crucial to think about how the signalling system can do a better job of putting people on the alert. The Observatory should constantly review the criteria for issuing typhoon signals; alerts are necessary for specific weather conditions in different parts of the city.

The Observatory should continue to issue typhoon information based on scientific grounds - such as wind force and direction. But it's also necessary to supplement that information with related precautionary advice. Such advice should take account of the changing sprawl of the population, economic activities, local weather and traffic conditions,  as well as special community needs.

Releasing emergency information should be better co-ordinated by the government centre, and not left entirely to scientists.

Anthony Cheung Bing-leung is an executive councillor and founder of SynergyNet, a policy think-tank.



http://focus.scmp.com/focusnews/ZZZU43E1VQE.html

Wednesday, August 16, 2006

OBSERVER
No laughing matter


ALEX LO
   
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   Doh! The ever-subversive Simpsons, along with other foreign cartoons such as Pokemon, Doraemon, Mickey Mouse and the Teletubbies, are to be banned from the mainland's prime-time television - between 5pm and 8pm - from next month.
Media regulators are concerned that homegrown animation programmes have been losing market shares for years, to the extent that they are becoming dinosaurs - but without the extinct creatures' enduring cartoon appeal. By some estimates, foreign cartoons now command 90 per cent of the market. In other words, mainland cartoon productions "suck big time", as Bart Simpson might say.


Instead of encouraging competition by opening markets - as the mainland has done in so many key industries under World Trade Organisation rules - state media regulators are hinting darkly at the undesirable influence of foreign cartoons on mainland children. Homemade cartoons, they say, such as the Monkey King, should be promoted in their place - they have greater educational value.

This does not bode well for the mainland industry. Thru the Moebius Strip, billed as the mainland's most expensive animated feature to date - at a cost of 130 million yuan - has bombed at the box office this month.


The prime-time ban, issued by the State Administration of Radio, Film and Television, will affect all TV stations. Mainland media pundits, appropriately, are already heaping scorn on the latest example of communist bureaucratic ineptitude. Guangzhou's Southern Metropolis News thundered: "This is a worrying, short-sighted policy and will not solve the fundamental problems in China's cartoon industry."

The irony is that the mainland has an army of talented animators. Most of them, however, are employed by foreign giants such as Disney, Warner Bros. and big-time Japanese studios.

But, like all things on the mainland, there may be a hidden political dimension. Some may think that mainland censors are using the blanket ban as an excuse to get rid of the Simpsons, undoubtedly the most subversive of the lot.

You may remember the controversial Goo Goo Gai Pan, episode 347 of the Simpsons, which was first broadcast in March last year in the United States. I am pretty sure the mainland distributor dropped that one, though I have not been able to confirm this. The episode sees Selma, Homer's older, chain-smoking sister-in-law, going through the menopause and deciding to adopt a baby from China. She is unmarried, but under state laws, only married foreign couples can adopt. So Homer pretends to be Selma's husband when they fly to China.

On his state adoption form, Homer puts down his profession as an acrobat, as an in-joke, until he is asked to substitute for a performer who has recently suffered a "bullet-related death" for questioning the Communist Party. He is told the performance is necessary to forestall a riot brought on by the audience's realisation that the party is not infallible.

Homer is hurt badly in the performance, but they manage to adopt baby Ling from an orphanage. Unfortunately, Madame Wu - the Beijing functionary whose voice is provided by Chinese-American actress Lucy Liu - learns the truth and rolls a tank into Tiananmen Square to stop the family leaving. With her body, Selma blocks the tank from advancing, and reasons with Madame Wu.

The episode also contains some controversial dialogue:

Madame Wu: "Lisa [Homer's young and super-smart daughter], soon you will have a Chinese sister who will surpass you academically."

Lisa: "I don't know. I'm considered pretty smart."

Madame Wu: "Well, Tibet was considered pretty independent. How'd that work out?"

In another scene, the American family visits the embalmed Mao Zedong . Homer: "Ohhoh, look at him, he's like a little angel ... who killed 50 million people, goochee goochee goo! Yes you are!"

Such foreign cartoons simply insult the feelings of the Chinese people.

Alex Lo is a columnist and senior reporter at the Post.

http://focus.scmp.com/focusnews/ZZZSFVE1VQE.html

Thursday, August 17, 2006

EDITORIAL/LEADER
Bloomberg's welcome initiative on smoking



   
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   As new problems emerge, old ones often get forgotten without being solved. It is thus refreshing to see New York Mayor Michael Bloomberg donating US$125 million of his own money to campaign against a health problem that is considered very much passˆm - smoking.
It is interesting to note that Mr Bloomberg's announcement came as Aids is very much in the limelight. A week-long conference being held in Vancouver has - once again - turned the spotlight on what is still regarded as one of the world's most threatening epidemics. HIV, responsible for causing Aids, was discovered a little over two decades ago, and funding for research to find a cure is ballooning. The Bill and Melinda Gates Foundation, for example, has contributed US$1.9 billion to the fight.



Sars and bird flu are two other newly discovered health issues that are also attracting increasing attention. Amid the frenzy to unravel their mysteries, however, it is all too easy to forget that there are other less captivating, but no less threatening, health problems that remain unsolved. Smoking is one of them. According to the World Health Organisation, tobacco consumption is the single leading preventable cause of death. Every year, it results in the premature deaths of nearly 5 million people. And if current smoking patterns continue, the number of deaths will double to 10 million a year by 2020.

Regrettably, smoking remains widely popular, even though its harmful effects, including second-hand smoke, are already well documented. Nor is its prevention a tardy business. One only needs to summon up the determination to quit. But perhaps so much is known about smoking that it has lost the attention it deserves or the funding required to combat it. Money is needed not so much to find a cure, but to protect children and young people from tobacco, to prevent them from taking up smoking, to support smokers to quit and to protect non-smokers from second-hand tobacco smoke. These preventive measures require dedicated efforts to lobby governments and fight established interests, to pass laws and introduce rules to ban or discourage smoking. Hong Kong's uphill battle to ban smoking in public places is a case in point.

By donating a large sum of money to tackle a problem such as smoking, which has gone off the radar screen of many philanthropists, Mr Bloomberg is doing the world a great service. In 2003, the WHO spearheaded the passage of an international treaty on tobacco control, but its implementation has been slow.

The campaign against smoking is not the only health issue that would benefit from similar donations. For example, malaria remains an endemic problem, particularly in Africa where it kills more than 1 million people a year. The world would be a healthier place if more philanthropists followed Mr Bloomberg's example.


http://focus.scmp.com/focusnews/ZZZ8R9PWXQE.html

Friday, August 18, 2006

EDITORIAL/LEADER
Population policy must strike right balance



  
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   The mainland's population problem is not just one of size, but also of structure. In a worrying development, the structural problems are getting worse even though efforts to control growth are largely a success. The population is still set to increase, from 1.3 billion now to a projected peak of 1.45 billion by 2030, and the structural issues make the task of managing this growth that much more difficult.
Topping the list is the serious imbalance between the sexes, with many more boys born than girls. While the problem is not new, the fact that it is getting more serious despite measures to tackle it is unsettling. To prevent the abortion of female fetuses, the improper use of ultrasound equipment for sex selection has been banned in many parts of the country. Other measures include the Girl Care Project that encourages rural families to value daughters as much as sons and the offer of financial incentives to parents of girls. The last measure is particularly noteworthy, as it strikes at the heart of the problem - the underprovision of social services and lack of retirement protection for the country's mainly rural population.


Although traditional values favouring boys who can carry on the family lineage remain strong, they are fading as modern values of sexual equality permeate the younger generation. But until the countryside is covered by a proper social security system, rural people will continue to hang on to the idea that having a son is the most dependable way of providing for old age.

One encouraging sign is that attitudes towards child-bearing and parenting among the educated and urbanised Chinese are no different from those of their counterparts in the developed world. They are less likely to discriminate against girls and more inclined to have fewer or no children. In Shanghai, for example, declining birth rates have even prompted the city government to encourage the birth of a second child. Much as Hong Kong is fretting about a greying population, Shanghai is worried that its shrinking workforce will put a heavy burden on the young to take care of the elderly.

Currently, only about 42 per cent of the mainland's population is urbanised, and the rate is considered low relative to its level of industrialisation. Perhaps the most effective way of addressing the population's gender imbalance and bulging growth lies in quickening the pace of urbanisation.

To be sure, policymakers have already identified urbanisation as a solution to many ills, notably rural poverty. They regard managing the process of urban growth as a critical challenge. The household registration system that used to bind peasants to their land and bar them from coming to the cities has largely been scrapped. But peasants still face tremendous difficulties being accepted as city dwellers. City governments' means of funding and providing social services have yet to adapt to the reality that migrants from the countryside are a permanent feature that must be provided for.

From a macro perspective, the huge size of the mainland population remains the biggest concern. But the problem manifests itself in various forms in different parts of the country. Some of the structural issues are localised. Presumably, they could be eased by a freer flow of people between the countryside and cities and a significant boost to social services in rural areas. Shanghai may find declining birth rates less of a problem if young blood continues to flow in from other parts of the country and its retirees find relocation to the countryside a realistic alternative.

As Hong Kong tries to map out its own population strategy, the mainland's population trends are instructive. For cultural reasons, our rising number of unmarried women may not desire to pair up with bachelors from the mainland. Our borders with the mainland will, for a long time to come, impede mainlanders from flooding in. But the scenario of those borders coming down sooner than we expect - either by design or pushed by events - is one that we should not ignore.


http://focus.scmp.com/focusnews/ZZZE3DPWXQE.html

Monday, August 21, 2006

EDITORIAL/LEADER
Determination needed to solve rubbish crisis



  
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   Garbage is not something we like to think about: after dumping it outside our door, we would like that to be the end of the matter. Given that a garbage crisis looms, with our three landfills nearing capacity, that attitude must quickly change.
Waste disposal is a problem for cities the world over. Hong Kong has the added difficulty of not enough space on which to dump refuse and a government that took up the matter later than it should have.


Even though various measures are now in place, or are being introduced, to deal with waste reduction and recycling, there is no sense of urgency about their implementation. Nor does Hong Kong have the big incinerators other cities use to reduce the amount of material going into landfills; due to a slow legislative process, the high likelihood of legal challenges and lengthy construction time, none is likely to be off the drawing board and in use before our rubbish dumps reach capacity, between the next four and eight years.

Hong Kong people's concern about the air pollution all too frequently blotting out blue skies would seem to indicate a keen environmental awareness. The amount of unnecessary garbage being tossed into tips clearly states the opposite.

The government claims that reversing such a practice is a matter of education. It believes educational campaigns will go a long way to ensuring that 80 per cent of residents will be sorting household rubbish for recycling by the end of the decade. As proof, Environmental Protection Department officials point to the household rubbish recycling rate rising from 8 per cent in 1998 to 16 per cent last year; they expect it to be 20 per cent next year. Projects to increase the convenience of recycling are also seen as the way forward in cutting down waste.

Compared with other big developed cities such as London, New York and Tokyo, we are no better or worse at recycling. Our circumstances are somewhat different, however.

Hong Kong's environmental officials have toured the world and inspected how other cities deal with rubbish. They well know that the solution lies not in a voluntary system or convenience, but in making recycling compulsory, as happens in Taipei and Munich. Even implementing a scheme, as in Vancouver or Sydney, where rubbish will not be collected if it has not been sorted into bags or bins containing recyclable material and other waste substantially boosts rates. Under such systems, residents quickly learn the value of recycling and develop a sense of social responsibility that they would not ordinarily have attained.

Companies in such cities also have to act responsibly by ensuring the goods they produce and sell can be reused as much as possible. They are held responsible for the disposal of hazardous materials and equipment that contains material harmful to the environment.

Our government is just now tackling the latter approach and has a timetable for implementation of laws for the proper disposal of plastics, electrical equipment, batteries, tyres and the like. Given its reluctance to legislate on new restrictions involving business, however, there is a danger that laws will be weakened.

While Hong Kong's household recycling rate is poor considering the urgency of our waste disposal problem, a model system has long been in place when it comes to construction firms: they have to pay for the waste they dispose of in landfills. This encourages them to dump as little as possible by selling reusable material to recyclers and has helped push the city's overall recycling rate to 43 per cent.

As impressive as this figure sounds, it is well below the 70 per cent achieved by many cities in northern Europe and Scandinavia. There, a culture has evolved where caring for the environment goes well beyond what gets put in the garbage.

Other cities have shown that where there is will, a solution to waste problems can be found. That determination is what Hong Kong needs and with the government taking the lead, we can find a way out of our impending mess.


http://focus.scmp.com/focusnews/ZZZ97R7XZQE.html

Tuesday, August 22, 2006

YANTIAN PORT DEVELOPMENT
The threat to Hong Kong's ecotourism


MARKUS SHAW
   
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The more Hong Kong merges with the economy of the Pearl River Delta, the more clearly we see the need for regional planning - and the sustainability it would bring.
One example is the continued development of the Yantian container port in Shenzhen, which is growing enormous. With increasing shipping traffic and port development at Yantian, water-borne rubbish and bilge-oil discharge have become major problems in the waters of Mirs Bay.

On a recent visit to the beautiful beaches of Tai Long Wan (which faces Mirs Bay), I was stunned by the amount of rubbish both on the beach and in the water. Only 10 years ago, these waters were fairly pristine.

The beaches of Tai Long Wan feature in many tourism adverts for Hong Kong: they would do well not to zoom in too closely. The same problems are facing the marine parks of Yan Chau Tong and Tung Ping Chau, which are even closer to Yantian.

These developments put at risk the government's and community's aspirations to turn our northeastern waters and countryside into a conservation and ecotourism zone. Those familiar with the area will know that it is one of the most beautiful and scenic in the world, combining green hills and turquoise waters to stunning effect.

As the Pearl River Delta region becomes increasingly blanketed by concrete and development, so the value of such beautiful countryside increases. Quite simply, it provides a unique opportunity to combine conservation and commercial exploitation in the form of ecotourism. The communities in that area are sitting on a priceless asset, if only they knew it. Now I fear that our own efforts to conserve the northeast and develop a thriving ecotourism industry may be rendered futile in the face of increased pollution - caused by untrammelled development on the mainland side of Mirs Bay.

At the same time, there are longstanding fears of competition to our port from the ports in Yantian, Shekou and Chiwan. Yet Hong Kong's major advantage is that it has the only deep-water port in the area (all the others must be continuously dredged to maintain a shipping channel).

The main difficulty for Hong Kong's port seems to be its distance from mainland factories and the inefficiencies of cross-border traffic. For some time, I have asked whether it would be possible to build a dedicated railway line linking the Hong Kong port with a distribution centre in China. Containers arriving on ships would be placed directly on trains and taken to the mainland distribution centre, and vice versa.

This would increase the speed and efficiency of distribution from the Hong Kong port to mainland destinations. It would eliminate the problem of the huge volume of road and river transport of containers between Hong Kong and the mainland, which contributes significantly to air pollution.

For those in government and the community who are still wedded to the idea of large-scale infrastructure projects, here's a solid proposal that would actually bring some major, sustainable benefits.

Markus Shaw is chairman of WWF Hong Kong.

http://focus.scmp.com/focusnews/ZZZ65GL74RE.html

Wednesday, August 23, 2006

IRANIAN NUCLEAR CRISIS
The chance for China to shine


KEVIN RAFFERTY
   
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The world has been brought to a dangerous precipice by the Iranian nuclear issue. But Tehran's hostility towards the trade and other concessions offered by the UN Security Council - in return for giving up its nuclear enrichment programme - is also a golden opportunity for China.

Indeed, this could be the defining moment of Beijing's international maturity. Is China prepared to be part of the global government system and to play a leading role in creating much-needed new rules of international behaviour? Or will it continue to play short-sighted, selfish games?

Iran's supporters say possessing a nuclear bomb is the most powerful symbol of a country's modernity, and a guarantee that it cannot be pushed around. The particular problem that Iran poses is that the world should not only worry about proliferation of nuclear weapons to Iran, but also nuclear proliferation from Iran.

The Iranian government is behaving as the natural heir to the Persian imperial tradition, ironically following in the footsteps of the late, unloved shah. When he helped trigger the quadrupling of oil prices in the 1970s, the shah declared that he wanted to use the income to build up his navy so it could patrol the seas between Iran and Australia.

The current Iran of the mullahs sees itself as the messianic sword arm of a crusading Islamic revival. Its support for Hezbollah reinforces the worries that Iran with a nuclear weapon would threaten stability, and not merely in its own backyard.



The five security council members - the United States, France, Britain, Russia and China - plus Germany, must offer carrots as well as sticks to Tehran. An Iran that can be engaged and modernised could become a force for stability in the Middle East. Unfortunately, Iran appears set to press ahead with its controversial nuclear work. This means that the six nations have to consider diplomatic sticks, including the threat of sanctions, as US President George W. Bush has urged.

Unfortunately, sanctions often fail: there is always someone with an interest in doing business with a rogue regime. Beijing has been propping up many oppressive governments, from Myanmar to Sudan and Zimbabwe. Beijing is playing an important role on the Iranian issue, too, as the leading supplier of arms to Tehran. This includes not just tanks and guns, but surface-to-air and surface-to-surface missiles of the kind that Iran has passed on to Hezbollah.

Although no one has firm proof - and it would be forbidden under China's commitments to the nuclear Non-Proliferation Treaty - Beijing has been suspected of passing on nuclear know-how to Tehran.

China has good, selfish, short-term and short-sighted reasons for its support of regimes in Myanmar, Iran and Sudan: notably, its anxiety to secure energy and other natural resources, to underpin its rapid economic growth. And if, at the same time, it pokes the US in the eye, that isn't likely to worry it.

Deng Xiaoping gave the advice that China should "hide brightness and nourish obscurity ... to bide our time and build up our capabilities". It was good advice at the time, but Beijing has since experienced decades of rapid economic growth.

China is now a world economic power - whether its own rulers or Washington like it. And because of that, it is creating a large political footprint, too. It can no longer hide its brightness in obscurity. Nor can Washington - in spite of Mr Bush's best efforts - hope to get its own way, unchallenged, on large international issues.

But this means that China now has responsibilities, too. It is not in Beijing's interests to see the spread of nuclear weapons. It is odd that a government anxious to suppress domestic dissent, and one that looks askance at Hong Kong's wishes for democracy, would welcome nuclear weapons in the hands of an Islamic, revolutionary Iran. The prospect that such weapons might spread to terrorists should be a major worry to a government that has its own discontented Muslims and other suppressed dissidents.

Beijing could play a key, constructive role in pointing out to Tehran the advantages of co-operation rather than confrontation with the rest of the world. If it comes to the need for sanctions, China's support will be essential both in convincing Iran that the rest of the world is serious, and in making sanctions work as never before.

Being a key player on this pressing issue for global co-operation would strengthen China's image immensely. It would also demonstrate to Mr Bush, in a practical way, that there are limits to an imperial US presidency.

Whether China's leaders can respond to the challenge remains an open question. They may head the biggest nation on Earth, with the fastest economic growth the world has seen. But politically, President Hu Jintao and Premier Wen Jiabao have so far shown themselves to be short-term and short-sighted players - with little understanding of the historic opportunity awaiting them and China.

Kevin Rafferty is editor-in-chief of PlainWords Media, a consortium of journalists interested in development issues.



http://focus.scmp.com/focusnews/ZZZW2QHH6RE.html

Thursday, August 24, 2006

US CREDIT BOOM
Spend, spend, spend: the end


ROBERT SAMUELSON
   
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   America is at the end of the credit boom - certainly the six-yearboom, and maybe even the 60-year boom. Has any society ever created so many ways for people to go into hock? In 2003, Americans had 1.46 billion credit cards, or five per person on average. Home mortgages now total US$9 trillion.
In 1946, households had 22 cents of debt for each dollar of disposable income. Now they have US$1.26. Behind these figures lies a profound social upheaval: the "democratisation" of debt. Everyone gets to borrow. But this process may have reached its limits.


Although Americans are routinely stigmatised as credit junkies, that's unfair. Of course, some people do borrow too much, and some financial institutions do lend abusively. Still, the democratisation of debt has generally been a good thing: millions of families can now borrow for university educations, cars and clothes. The biggest boon has been the expansion of home ownership, up from 44 per cent of households in 1940 to 69 per cent today. Three-quarters of household debt consists of mortgages.

At heart, Americans' appetite for credit reflects national optimism. We presume that today's debts can be repaid because tomorrow's incomes will be higher.

The origins of today's credit culture date to the 1920s, with the advent of instalment payments for cars and appliances, says economist Martha Olney of the University of California. In the 19th century, "it was thought that only irresponsible families bought on credit", she says. "By the 1920s, it was only foolish families that didn't buy on credit, and use it while they were paying for it."

After the second world war, credit became part of the mass market. The combination of aggressive merchandising, and laws prohibiting racial and ethnic discrimination in lending, led to a huge expansion of borrowers.


The trouble is that no society can forever raise its borrowing faster than its income - which is what America has been doing. Sooner or later, debt burdens become oppressive. One reason for thinking America has passed that point is that the last spasm of credit expansion was partially artificial. To soften the 2001 recession, the US Federal Reserve embarked on an audacious policy of easy credit. From December 2001 to November 2004, it held its key, short-term interest rate under 2 per cent.

A property bonanza ensued. The frenzy depended heavily on low-interest-rate mortgages. But what the Fed giveth, the Fed taketh away. Since June 2004, it has raised short-term interest rates from 1 per cent to 5.25 per cent. Whether the Fed achieves the vaunted "soft landing" - an economic slowdown that reduces inflation without causing a recession - hinges heavily on how the credit boom of the last few years unwinds. If it ends violently, with a crash in home prices and housing construction, a recession could follow.

This turn of the credit cycle could signal the end of the decades-long rise of personal debt as a proportion of income. It is not just that debt service - interest and principal - is at a historic high, or almost 19 per cent of disposable income. Since 1989, the share of households with debt has risen from two-thirds to three-quarters.

For years, the democratisation of debt stimulated the economy. What happens without that prop? For better or worse, we may soon learn.

Robert Samuelson is a Washington Post columnist.


http://focus.scmp.com/focusnews/ZZZ4677H6RE.html

Friday, August 25, 2006

EDITORIAL/LEADER
A lesson in the changing nature of universal truths



   
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   The International Astronomical Union has spoken and set in stone - until the next debate, at least - the composition of Earth's neighbourhood. But while this may have seemed to have been an argument about whether Pluto is or is not a planet, in reality it has been one of far greater gravitas - the questioning of science itself.
In our fast-changing world, there can be no better lesson for those among us who are reluctant to review and amend our beliefs and practices.


For the majority of us, the thought that Pluto is not what schools have been teaching since its discovery 86 years ago seems quaint. Astrologers and others in the business of star gazing and fortune telling see it much more seriously. To some others, so much fuss about a small rock so far away is absurd. A small number among us, disinterested in what lies beyond the atmosphere or perhaps just poor students or too young to understand, may wonder why a harmless Disney dog is making headlines.

Whatever our feelings, though, in the back of most minds is the sense that familiarity has been tampered with. Like a badly food-stained favourite shirt or well-worn, but comfortable, slippers, Pluto was not something to be so willingly discarded. This was a case of an old friend being in hospital and potentially at death's door.

Scientists are not so emotional. They are forever making discoveries that make previous findings obsolete. No scientific branch is as ever-changing as astronomy, where each new glance at a telescope or gathering of satellite data alters charts. What was in the heavens last night will be added tomorrow. Such change is exciting rather than distressing for astronomers. They know that with each new finding, they are a step - albeit a miniscule one in all but a few rare cases - closer to understanding the universe.

More broadly, though, Pluto has proven a paradigm shift for science. This is a phrase much used but little understood by the general populace - although for the scientific community, it has great meaning. First used by American science philosopher Thomas Kuhn 44 years ago, the term describes a dramatic shift in basic assumptions within scientific theory. In science there are frequently anomalies against a paradigm and when enough accrue, a crisis occurs in the discipline affected. New ideas are floated, debate flourishes and truth is reassessed and if necessary, changed.

That is what happened over Pluto and the scientific community has made its reassessment, which we all will live by until evidence indicates it is time to think otherwise. Upheavals can be destabilising, but sometimes they are necessary - particularly when it comes to banishing complacency. Often, taking stock of what we have can also be refreshing. For those of us in need of change, Pluto should become our new symbol.


http://focus.scmp.com/focusnews/ZZZOCCM79RE.html

Monday, August 28, 2006

EDITORIAL/LEADER
The only viable approach to Iran's nuclear intent



   
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   If the world's powers want Iran to stop heading down the path of North Korea in making nuclear weapons, they have to ensure a united approach rather than the disjointed one presently being adopted. For inspiration, they - and Tehran - need only look to Libya, which has gone from pariah nation status to that of equal partner in less than three years.
The best opportunity comes on Thursday, when the UN Security Council's deadline demanding Iran suspend uranium enrichment or face economic and political sanctions expires. Details of Iran's response are not known, but already the US has expressed typical scepticism - and kept up warnings that hint of an Iraq-style military reaction should there be obstinacy.



Tehran's leaders gave no suggestion at the weekend that they would give in, speaking of their determination to enrich uranium, the fuel the US and European nations fear is being produced to make nuclear bombs. President Mahmoud Ahmadinejad, inaugurating a heavy- water nuclear plant, maintained the programme was for peaceful purposes.

There is no reason to believe Iran's leaders, given their anti-Israel rhetoric and financial and military backing of extremists like Hezbollah. They see in Israel justification for whatever their objectives - a nation that developed a nuclear energy programme and atomic weapons while not being a party to international safeguards and without intervention.

The blinkered international pressure on Iran while ignoring Israel sends the wrong signal. If the security council truly wants to lay proliferation concerns to rest, it must correct such anomalies and strive for the objective that the world's five declared atomic powers - its permanent members - have promised for more than three decades, but shunned: full disarmament.

That those same nations, plus Germany, are now heading negotiations with Iran is, at best, hypocritical. Alliances - the US with Israel, China and Russia with Iran - would seem to ensure that whatever the response, it will be imperfect.

Best to look to what drove Libya to give up its weapons of mass destruction programmes on December 19, 2003, and make amends for terrorism and support of anti-western extremists. While no two situations are alike and therefore cannot be easily replicated, the foundations, built on containment and sanctions, but most importantly, diplomacy, can be.

In Libya's case, that involved a unified American and European policy driven by the US markedly softening hostility. Such a forthcoming approach towards Iran would similarly signal that it, too, can garner the benefits of engagement.

The process will not be quick, nor without concessions by all sides. But it is the only viable approach and one that the US and its partners must adopt to set an example to other nations that may have an eye on weapons proliferation.


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Tuesday, August 29, 2006

NATIONAL SECURITY LAW
A chance to expose the west's hypocrisy


MICHAEL CHUGANI
   
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   If the government is looking for an opportune time to revive its deeply unpopular proposal for a national security law, it is now. That is not so much because Hongkongers have become less fearful of far-reaching laws to protect the nation, but because the government can now expose the hypocrisy of its foreign critics.
These detractors, primarily Britain and the United States, but also western Europe, helped undermine Hong Kong's earlier attempt at national security laws by taking the high ground. They insisted the government did not need intrusive measures that crossed moral, civil and human rights boundaries. Few observers noticed at the time that legislatures in those countries were passing national security laws in the name of fighting terrorism.


Now, three years after those emotionally charged days, a national security law is no longer on Hong Kong's radar screen, but the recognition remains that our constitution demands such a law. Chief Executive Donald Tsang Yam-kuen knows it would be political suicide to breathe life back into the corpse just months before his bid for re-election. But Hong Kong is duty-bound to revisit the issue sooner or later, and fresh proposals could well be back on the agenda after the spring elections. That will, without doubt, again trigger overseas criticism designed to ensure that, in protecting national security, the government also protects civil and privacy rights.

By that time, US President George W. Bush is likely to have manipulated the current mood of hyped-up fear over fresh terror attacks to further tighten America's security laws. He has already authorised the secret monitoring of suspects without a judge's warrant. That practice has been ruled unconstitutional by the courts, but he is determined to have his way.

The US Patriot Act, passed after the September 11 attacks, is far more intrusive than the law the Hong Kong government tried to pass three years ago. Britain, France and others have tightened their laws in the wake of the London train attack last summer.

British Prime Minister Tony Blair says the rules of the game of civil rights have changed. Europe now wants to change them even further, with proposals to racially profile all Arab and Muslim air passengers as possible terrorists, following Britain's foiling this month of an alleged plot to blow up planes.

The very proposal is sickening, but at least it exposes the hypocrisy of the west. In effect, it says that while others must respect human-rights norms in protecting their nations, the west can ignore such standards to protect its own security.

Critics of this reading of western behaviour will argue that the west faces a very real threat of terror attacks while others do not - and Hong Kong, in particular, is quite safe. That is an arrogant argument, suggesting others are not qualified to assess - and act accordingly - to counter the threats facing them. India and Indonesia have suffered horrific terrorist attacks, and China has its own problems in the Muslim region of Xinjiang - but its crackdown continues to draw western condemnation as human rights abuse.

Beijing has its own reasons for wanting a national security law in Hong Kong, and has the sovereign right to guard against perceived threats. What Hong Kong can and should do is exert pressure to make sure the law strictly respects international standards of human rights, while safeguarding the nation.

Then it would be in a position to shame those who have pointed fingers at it. Hong Kong's government officials and politicians are wimps when it comes to pointing fingers back at their foreign critics. The national security law, if properly done, will give them the moral high ground to act like men - and women.

Michael Chugani is editor-in-chief of ATV English News and Current Affairs.

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Wednesday, August 30, 2006

BEHIND THE NEWS
A wicked Web


MARK O'NEILL
   
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As the World Cup gripped the mainland, so too did online gambling websites, sparking a huge unchecked loss of capital that is said to have reached up to 100 billion yuan. Photo: EPA

In the early hours of July 24, a team of Shanghai police broke up the mainland's biggest gambling operation of the World Cup, which had handled 1 billion yuan worth of bets during the tournament.
They broke into the head office of the syndicate, seizing 17 million yuan and HK$1 million in cash, 10 computers used to place the bets and three passenger cars used to collect money and deliver winnings, and arrested 17 people, including its chief, Ren Shen.

Ren and his team were only the tip of the iceberg - foreign media estimates put the amount bet by Chinese on the World Cup at between 50 and 100 billion yuan, putting China among the biggest gamblers on the tournament, on which about US$70 billion was bet, up from US$60 billion on the World Cup in Japan and South Korea in 2002. It is several times the 30 billion yuan bet each year on the country's official soccer lottery. It was gambling as much as the love of soccer that had mainlanders addicted to their televisions throughout the month of the World Cup, making it almost the sole conversation topic for some.


According to a survey by a research institute at Beijing University, more than 600 billion yuan leaves China each year in betting losses.

What makes this extraordinary is that all these bets are illegal - the communist government outlawed gambling when it took power in 1949 and the only legal betting is in Hong Kong and Macau.

For the government, gambling is a three-fold danger - the uncontrolled outflow of capital, the flouting of law and nurturing of organised crime despite repeated police campaigns, and the damage to individual families who run up debts they cannot pay.

Everyone has heard anecdotes of the evils of gambling - losing the children's school fees and the family home, wives who divorce their husbands and people who in despair take their own lives.

The government is especially sensitive because the gambling boom has coincided with an increase in the wealth gap. Millions of Chinese see their neighbours buying fancy cars and expensive homes but will never be able to afford these luxuries through their normal jobs. For them, gambling represents the only hope of making a fortune.

It is the internet that has made a nonsense of the government regulations, by enabling global companies to reach the mainland gambler.

Globally, there are about 330 Chinese-language gambling websites, based in the US, Britain, Southeast Asia, Hong Kong and Macau. The companies set up finance companies in Hong Kong and Macau to handle the flow of money.

It started in earnest after October 2001 when China launched a soccer lottery, allowing punters to predict wins, losses and draws in nine matches in Italy's Serie A and four in the English Premier League. This fuelled interest in European soccer. The watching of domestic soccer has waned because of low standards and widespread corruption.


National and regional television channels broadcast several live games from Europe every week, with replays and analysis, while newspapers and magazines provide detailed information on the teams and players. The foreign sites offer more choice and flexibility than the domestic lottery and are out of the control of the authorities.

"Most serious is internet soccer gambling, with collusion between foreign and domestic syndicates," said Zhu Entao, assistant to the minister of public security. "Nearly all the profits go offshore. The sums involved are millions, tens of millions and even more than 100 million yuan. The outflow of money is enormous.

"If we do not take measures and this continues for a long time, it will harm the national economy and the exchequer. The laws against gambling are out of date. We must consider administrative measures."

On the mainland, the syndicates operate like businesses, with agents and representatives who deal with the clients. Ren operated as the representative of a foreign company. He told police that he was the principal agent of a foreign gambling syndicate which paid him a commission as well as a percentage of the losses which the clients made. He said that there were two tiers of agents, with the second tier dealing directly with clients and assessing their creditworthiness.

Clients place money on deposit with the syndicate and are given a codeword or number to identify themselves. They make bets via mobile telephone, computer or short messages. Underground banks process the transactions, moving the money in and out of China.

To avoid detection, the websites often change names and addresses and use servers outside China. Those who work in the syndicates keep as little information as possible, making it hard for police to collect evidence.

"Many of our clients think that they are very smart and can make a fortune in a single day," Ren said.

"They are fantasising. Gambling companies never lose money. The staff who work for them have much more specialist knowledge than you. According to the rules, if you bet 100 yuan, you can only win 80. If you lose, you lose all the 100."

During the World Cup, punters could bet on anything - the result after 90 or 120 minutes, who would score and when, who would receive a yellow or red card, with betting before and during the game.

The best-known gambling chief is a Taiwanese named Yu Kuo-ju, a minor triad boss who moved to the mainland in 2002 and became the agent for a syndicate based in Costa Rica. He used door-to-door salesmen and women to get customers, with operations in Beijing, Shanghai and Guangzhou, to bet on football in Europe, Latin America and Asia.

The Taiwan press estimate that he has since 2002 earned more than NT$10 billion (HK$2.36 billion) and call him the most successful Taiwanese businessman on the mainland.


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Thursday, August 31, 2006

FREE PRESS
The dilemma of shielding privacy


C. K. LAU
   
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   Over the past two decades, a central theme of the debate over press freedom has focused on fears that the government might tighten the reins on the media after Hong Kong returned to mainland rule in 1997.
Such worries materialised in 2003, when the government sought to legislate on national security by introducing a bill to implement Article 23 of the Basic Law. It included provisions that could have impinged on a free press, and was eventually shelved after a groundswell of opposition.


But there has never been any doubt that the Hong Kong media also face a no-less serious threat from within. It springs from the questionable reporting practices of errant members of the press, which might provoke the public to demand the imposition of limits on what they can publish.

The moral outrage sparked by Easy Finder's publication of photographs of actress Gillian Chung Yan-tung, taken while she was changing her costume, has confirmed that the threat is real. The unrepentant attitude of the magazine, whose senior editors and proprietor have remained silent, is keeping the controversy alive. Even Chief Executive Donald Tsang Yam-kuen has been obliged to weigh in by expressing his empathy with public sentiments.

Responsible members of the press could do without this row, especially since it might lead to the passage of laws regulating the media's intrusion into privacy. It's not that they endorse Easy Finder's unethical ways. But one more law governing the media would be one more latent threat to the operation of a free press.

Few would object to the notion that a changing room should be off-limits to prying eyes. But if an investigative reporter has reasonable suspicions that a politician is about to engage in dirty dealings - which may reflect on his integrity as a public servant - should a hidden camera be installed to find out the truth? It would be difficult to answer either "yes" or "no" without attaching various caveats.

The question illustrates the difficulty of finding a legally clear-cut answer to questions that are essentially about morality and ethics, where the lines of decency are not always very well defined.

Imagine that a hidden camera caught a politician taking drugs inside a changing room. The outrage over his illegal conduct would likely overshadow concerns about the impropriety of spying on him in a place where people should have a reasonable expectation of privacy. Does the end justify the means? Should the footage be ignored since it was obtained through questionable means?

Essentially, every crime is a moral wrongdoing - but not everything that is morally outrageous should be criminalised. As the community outcry over Easy Finder's excesses escalates, some lawmakers are pushing the government to introduce legislation on invasions of privacy. It may be possible to draw up a law that strikes a proper balance between respecting privacy while not infringing on the operation of a free press. But if no satisfactory solution can be found, then the community will have to decide which they value more: privacy or a free press.

Ideally, if every journalist abided by the industry's code of ethics, there would be no need to make the choice. The code provides that journalists should respect the reputation and privacy of individuals. And if there is a need to report on the private life of individuals because of the public interest, they should do it in ways that don't hurt people unnecessarily.

Members of the media would strengthen the cause of a free press - and do themselves and the community a great service - by voluntarily abiding by their own code of ethics.

C.K. Lau is the Post's executive editor, policy.


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Friday, September 1, 2006

COMPETITION ON THE MAINLAND
The great electronics wars


INGO BEYER VON MORGENSTERN and CHRIS SHU
   
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Competing in mainland China's consumer electronics market has never been easy: rampant price wars caused by overcapacity have squeezed profit margins to some of the lowest levels in the world. And, as if things weren't bad enough for manufacturers, a new wave of consolidation among electronics retailers is turning up the heat.
We recently saw the acquisition of China Paradise Electronics Retail by Gome Electrical Appliances Holding, China's leading electronics speciality chain. That came fresh on the heels of an alliance struck - then put on hold - between China Paradise and Dazhong Electrical Appliance. In April, US-based Best Buy acquired Jiangsu Five Star. All this has happened within the space of a few months.

Retail chains dominate the consumer electronics landscape: a handful of these players control as much as 40 per cent of sales in first-tier cities like Shanghai and Beijing.

They dominate even more in some product categories: the new giant forged from the imminent merger of Gome and China Paradise will control 60 to 70 per cent of TV sales in Shanghai.

Unless consumer electronics players - whether Chinese or foreign - rethink their strategy, they risk losing the battle for the wallets of millions of mainland consumers.

A lot is at stake: the mainland's consumer electronics market has been growing at a compound rate of 12 per cent a year, and is expected to reach about 1 trillion yuan by 2010, up from 590 billion yuan this year.

This market will account for 25 per cent of the global market by 2010. Carving out a share of it has ranked high on the agendas of many of the world's consumer electronics companies for some time. Many of the world's best-known brands already have a sizeable presence in China.

But price wars - triggered in part by the rise of the electronics retail chains and overcapacity - have pushed profit margins on TVs and other white goods to below 3 per cent - among the lowest in the world.

Amid the proliferation of brands, many manufacturers are having a harder time competing for shelf space in the major electronics retail chains. A growing number of second-tier brands, both foreign and domestic, are being pushed off the shelves in favour of better-known and faster-selling ones.

Moreover, the US and European trend to sell products under retailers' own labels will catch on in mainland China. Gome already has its own brand, Idell, while China Paradise recently introduced a line under the brand name Yole. These private-label brands will compete head-on with established brands.

So how should consumer electronics players compete on the mainland? First, manufacturers need to form win-win partnerships with the large retail chains, helping them build capabilities in marketing strategy, in-store promotions, and supply chain and inventory management. These are critical capabilities that retailers in more developed markets may take for granted, but which many mainland retailers still lack. Firms that help retailers build these skills will secure their position as "strategic vendors" to the major retail chains.

Surprisingly, not all consumer electronics companies on the mainland are equipped to serve the needs of the large retail chains. Many lack dedicated teams to focus on serving the major retail chains that comprise the bulk of their sales.

Others have individual sales teams for each of their product categories: in one case we observed, a manufacturer had five different sales teams calling on the same retail-chain account.

For most consumer electronics players, working more closely with these new retail giants will be an essential part of staying in the game.

Some, however, may want to fight fire with fire, and consider opening their own branded stores. Sony and Zhuhai-based Gree have already opened hundreds of branded stores throughout the mainland, selling directly to the consumer and playing an important role in shaping the buyers' experience with their brand.

The trick, however, will lie in co-investing with dealers at the city level - to share the investment risk - while exercising direct management control over these stores, to maximise sales and manage their brand properly.

For example, Sony co-invests with local dealers to build Sony shops. But it directly manages the in-store sales teams, to ensure that sales targets are met, inventory is tracked, and valuable information on customer buying behaviour is collected.

Finally, two trends may play to the advantage of foreign players in the consumer electronics sector. They are the opening of mainland China's distribution sector in line with its World Trade Organisation commitments, and the growing presence of large, sophisticated foreign electronics distributors like Ingram Micro and Trend Micro.

Through their existing global relationships with these large distributors, foreign manufacturers can gain access to hard-to-reach geographic markets and distribution channels. These include regional department stores and small, independent speciality stores.

Competing in the mainland's consumer electronics market may be tougher these days due to the wave of consolidation reshaping the landscape. But the players that figure out a strategy for collaborating with these new electronics retail giants - without becoming too dependent on them - will have a better chance at succeeding in this dynamic marketplace.

Ingo Beyer von Morgenstern is a director who leads McKinsey and Company's hi-tech practice in Asia. Chris Shu is an associate principal in Shanghai.



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Monday, September 4, 2006

EDITORIAL/LEADER
Hong Kong needs more than a healthy economy



  
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   As Chief Executive Donald Tsang Yam-kuen prepares for his policy address next month, he can take heart from a generally positive environment.
The political climate is calm, he enjoys relatively high levels of popularity and, crucially, the economy is doing well. But there is no room for complacency.





This newspaper's survey of 726 opinion leaders, published today, shows that while respondents are generally happy with the chief executive's economic policies, especially with regard to integration with the mainland, there are many other areas in which they expect the government to improve. It reveals that, within this influential sector of the community, there is underlying dissatisfaction with key aspects of the government's performance.



Policies seen as being the most urgent are those related to making Hong Kong a better place in which to work and live. Improving the environment, easing poverty, and furthering health-care reform were among those seen as urgent matters by an overwhelming majority of respondents. The survey also suggests there is room for improvement with regard to governance issues, including greater transparency and better public participation. This is an area in which Mr Tsang should be doing more.

Interestingly, more than half thought Mr Tsang's first policy address had failed to identify our city's most pressing issues; 66 per cent did not believe his policy blueprint found solutions to those problems. He will be expected to better articulate his plans this time. Only 10 months of Mr Tsang's two-year term remain. It may be tempting for the chief executive to argue that this policy address is, therefore, not one in which he can outline his strategy for the future.

But he should not back away from initiatives, even those which are long-term. There is a need for concrete policy proposals to meet the many challenges Hong Kong faces.

Mr Tsang should also bear in mind that this will be his last policy address before the chief executive election next year, when he is expected to be the frontrunner. The community will therefore expect him to outline the thinking that is likely to form the basis of his election campaign.

He has enjoyed high levels of popularity since his appointment. But polls show these have been slipping in recent months. In our survey, only 52 per cent of respondents backed Mr Tsang for a second term. While this is far above the 35 per cent approval rating of Mr Tung's low point, the figure suggests that Mr Tsang should not rest on his laurels.

Before drafting his speech, Mr Tsang is involved in a wide-ranging consultative process. He has declared the environment to be a priority, but more concrete measures are necessary, especially on air pollution. Consultation has started on health reform, although the important second stage on funding has been postponed. There is a need to get this back on track quickly. The poverty commission, meanwhile, has been widely criticised for its failure to get to grips with the problem.

It is notable that while only 20 per cent of respondents thought the government's progress on universal suffrage was either good or excellent, the issue was relatively low down the list of policies respondents regarded as urgent.

This is, no doubt, partly because little can be achieved on the constitutional reform front in the near future. Indeed, no electoral reforms can take effect until 2012. But this is, nonetheless, a matter which Hong Kong people care deeply about. Mr Tsang should use the policy address to provide an update on constitutional reform and to provide more details of his plan for the way ahead.

Action is needed on a wide range of issues including education, health, welfare, planning, the environment and political reform. The chief executive should listen carefully to the views expressed before his policy address but be prepared to take tough decisions. A clear vision for Hong Kong's future is needed. A buoyant economy alone is not enough.


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Tuesday, September 5, 2006

LAURENCE BRAHM
No room at the banquet



   
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   During the Tang dynasty, poet Du Fu commented on the social inequities and debauchery of his day among corrupt officials and the wealthy, writing: Zhumen jiu rou chou, Lu you dong si gu. ("Within vermillion gates wine and meat rot, While on the street outside people starve to death.")
Written over 1,200 years ago, such lines spring to mind today amid the luxury of a typical banquet for government officials and their capitalist Chinese entrepreneur cronies. They are feted with the world's finest seafood and the most expensive, imported wines, while their luxury cars are parked outside.


Meanwhile, at the end of last year, there were 23.65 million impoverished people in rural China who simply did not have enough to eat, according to official statistics. Another 40.67 million people with low incomes were searching for a way out of their desperate situation. Many were turning to crime, drugs and prostitution - which have now become pillar industries of the Chinese economy.

If you ask Beijing officials - as they feasted in five-star hotels - about the problem of poverty, they would most likely shrug and dismiss those waidi ren, or "rural outsiders". They give definition to China's new class system, which appears more like a caste system.

Many outside economists point with concern to the widening income gap, warning about the sustainability of China's economic model. China's Gini coefficient - a measure of unequal income distribution - has reached the internationally acknowledged warning limit of 0.4, which should set alarm bells ringing in the elite Zhongnanhai compound.

This is precisely what occurred last month, when the Communist Party's Central Committee called a symposium of various interest groups. They included the All-China Federation of Industry and Commerce, so-called democratic parties and hosts of non-communist social representatives.

This broad spectrum of groups was summoned to discuss how to cope with the issue of "reforming and standardising income". Some observers might have seen it as a massive lobbying effort to maintain a social pact between the Communist Party and the rest of society.

That's because those spending lavishly on five-star lifestyles are mostly government officials and state-owned enterprise leaders, while rural China struggles with poverty. The meeting was held in Zhongnanhai, underscoring the importance and sensitivity of the party's concerns over this ticking time bomb.

As expected at such meetings, a five-point programme was issued - presumably to be studied at more symposiums at luxury resorts. The five points are: "Pay more attention to social equity; increase the incomes of low earners; expand the proportion of medium-income earners; regulate high earners effectively; and forbid illegal incomes."

As for paying attention to social inequity, anyone can do that by stepping a few metres outside their luxury hotel. But other requirements, such as forbidding illegal incomes, may be difficult to implement: illegal incomes are propping up the prosperity of many at the top.

The income disparity heralds an era of problems that have already been experienced by other developing countries, such as Indonesia. Namely, that society remains stable as long as income gaps don't widen. As those gaps expand, however, social contradictions intensify, and there is a sharp increase in the probability of sudden, turbulent economic situations.

It was concern about just such income inequity that allowed Marxist ideals to filter into Peking University, in the first half of the last century, inspiring people like Mao Zedong to overthrow the existing system with all its inequities.

China's government at the time lacked principles and catered to foreign economic interests - so obviously the things that occurred then couldn't be repeated. That must be reassuring for everyone. Then again, if Mao's ghost was listening in to the meeting last month in Zhongnanhai, what might he suggest doing?

Laurence Brahm is a political economist, author, filmmaker and founder of Shambhala Foundation.



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Wednesday, September 6, 2006

TERRORIST CELLS
Identifying the 'virtual' enemy


H. T. GORANSON
   
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Five years have passed since the terrorist attacks of September 11, 2001, yet it seems that policymakers have learned little about how terrorist cells operate and what their weaknesses are. The Bush administration still uses the phrase "war on terror" and behaves as though it really is a war - the ordinary kind, where one government fights another.
Yet, after five years of military exertions, strategies based on targeting a united aggressor have only made the situation worse. It is time to understand the new, emerging model of conflict.

In order to make the "war" model fit, the Bush administration alludes to al-Qaeda as a centrally directed enemy. In fact, there is no master planner or funder of terrorist activities now. The Madrid, London and Bali attacks - as well as several thwarted operations in the United States and Britain - were all characterised by their dispersed organisation. Independently generated plots emerged and used ad-hoc resources, often within the target country.

Those small operations also lacked a common internal design. Terrorist motivations differ from cell to cell. People can be involved for profit or power, for political or religious reasons, out of hatred or for thrills. Conventional military models are geared to decapitate something that, in this case, has no head.

The characteristics of this new structure have already been studied in a very different context. Terrorism is a violent version of an agile "virtual enterprise". A virtual enterprise is any small group that assembles itself into an organisation that is just large enough to accomplish the collective intention.

Virtual enterprises are unusually innovative and, in the business sector, they are possibly the only system that can build a one-off product well. In fact, they are probably the commercial model of the future.

At present, most of the price of any product supports the huge, inefficient organisation that assembled it. Nearly all the creativity and problem-solving occurs in small companies that are later "integrated" by mega corporations - which have expensive and vulnerable infrastructures and keep most of the profit. This model is the current basis of the business world, just as centralisation has also been the favoured defence strategy.

Extensive research into alternative models was funded through the US Defence Department, which wanted better, cheaper and more tailored-to-order equipment. The research noted the conditions and triggers needed to facilitate the self-assembly of small, opportunistic groups, and to enable them to act like large companies. Unfortunately, the research programme was cancelled before its findings could be applied in the business world, almost certainly because it threatened large companies.

It is often forgotten that US Defence Secretary Donald Rumsfeld emerged from retirement to reorganise the American military into a smaller, more agile force, using some of these same insights.

But the planning for the Iraq invasion - in which Mr Rumsfeld advocated the use of fewer troops than advised - suggests a poor understanding of distributed systems. While the forces were deployed for a flexible entry and withdrawal, the Bush administration ended up using them for an old-fashioned occupation. Terrorists, however, have been better at capitalising on models of distributed operation. Scores of texts are appearing in the Muslim world on holy warrior strategic studies.

These books - and the trends they indicate - are becoming less dogmatic and increasingly sophisticated in the adoption of modern management techniques. Their research surely includes the young science of virtual-enterprise management: how to nurture and support self-organising cells.

Perhaps the first lesson for western policymakers is that virtual enterprises run on a culture of trust. Some kinds of trust can be based on an artificial notion of opponents who are "not us" - rather than on real values and direct experience.

That is why the Bush administration's actions actually strengthen the virtual-terrorist-enterprise dynamic. US President George W. Bush's "us and them" rhetoric clearly defines an "other" and positions it as a cohesive enemy. His "war" approach is making it easier for Islamist terrorists to view the west as a united and malevolent force.

In future, the virtual-enterprise model will shape how business is conducted, wars are fought and probably how government services are administered. It promises to decouple the management of finance from that of production, implying faster innovation and growth. However, if western governments do not develop a deep understanding of how these structures operate, they stand no chance of combating the agile terrorist enterprise.

H.T. Goranson is the lead scientist of Sirius-Beta Corp. Copyright: Project Syndicate/Institute for Human Sciences



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Thursday, September 7, 2006

FREEDOMS IN PERIL
The authoritarian legacy of 9/11


RALF DAHRENDORF
   
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   Five years after the attacks on the United States, 9/11 is no longer a mere date. It has entered the history books as the beginning of something new; a time of change. The terrorist bombings in Madrid, London and elsewhere will also be remembered, but the catchphrase is "9/11".
But was it really a war that started on September 11, 2001? Not all are happy about this American notion. During the heyday of Irish terrorism in Britain, successive British governments went out of their way not to concede to the Irish Republican Army the notion that a war was being waged. "War" would have meant acceptance of the terrorists as legitimate enemies - as equals, in a sense - in a bloody contest for which there are accepted rules of engagement.


This is neither a correct description nor a useful terminology for terrorist acts, which are more correctly described as criminal. By calling them "war" - and naming an opponent, usually al-Qaeda and its leader, Osama bin Laden - Washington has justified domestic changes that, before the 9/11 attacks, would have been unacceptable in any free country.

Most of these changes were embodied in the Patriot Act. Though some simply involved administrative regulations, the act's overall effect was to erode the great pillars of liberty, such as habeas corpus - the right of recourse to an independent court whenever the state deprives an individual of his freedom. From an early date, the prison camp at Guantanamo Bay in Cuba became the symbol of something unheard of: the arrest without trial of "illegal combatants" who are deprived of all human rights.

For everyone else, a kind of state of emergency was proclaimed that has allowed state interference in essential civil rights. Controls at borders have become an ordeal for many, and police persecution now burdens quite a few. A climate of fear has made life hard for anyone who looks suspicious or acts suspiciously, notably Muslims.

Such restrictions on freedom did not meet with much public opposition when they were adopted. On the contrary, by and large it was the critics, not the supporters, of these measures who found themselves in trouble. In Britain, where Prime Minister Tony Blair supported the US attitude entirely, the government introduced similar measures and even offered a new theory.

Mr Blair was the first to argue that security is the first freedom. In other words, liberty is not the right of individuals to define their own lives, but the right of the state to restrict individual freedom in the name of a security that only the state can define. This is the beginning of a new authoritarianism.

The problem exists in all countries affected by the threat of terrorism. There is even a debate - and some evidence - concerning the question of whether involvement in the "war against terrorism" has actually increased the threat of terrorist acts.

A diffuse sense of anxiety is gaining ground. People feel uneasy and worried, especially when travelling. Any train accident or airplane crash is now at first suspected of being an act of terrorism.

Thus, 9/11 has meant, directly or indirectly, a great shock, both psychologically and to our political systems. While terrorism is fought in the name of democracy, the fight has in fact led to a distinct weakening of democracy, owing to official legislation and popular angst. One of the worrying features of the 9/11 attacks is that it is hard to see their purpose - beyond the perpetrators' resentment of the west and its ways. But the west's key features - democracy and the rule of law - have taken a far more severe battering at the hands of their defenders than their attackers.

Two steps, above all, are needed to restore confidence in liberty within the democracies affected by the legacy of 9/11. First, we must make certain that the relevant legislation to meet the challenge of terrorism is strictly temporary. Some of today's restrictions on habeas corpus and civil liberties have sunset clauses restricting their validity; all such rules should be re-examined by parliaments regularly.

Second, and more importantly, our leaders must seek to calm, rather than exploit, public anxiety. The terrorists with whom we are currently at "war" cannot win, because their dark vision will never gain broad popular legitimacy. That is all the more reason for democrats to stand tall in defending our values - first and foremost by acting in accordance with them.

Ralf Dahrendorf is a member of the British House of Lords. Copyright: Project Syndicate/Institute for Human Sciences



http://focus.scmp.com/focusnews/ZZZH89L9CRE.html

Friday, September 8, 2006

THE MUSLIM WORLD
Betrayed by the 'war on terror'


MAI YAMANI
   
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"We are all Americans," wrote Le Monde on September 12, 2001. And so it was with most people in the Muslim world, who were as appalled as anyone else at the carnage of the terrorist attacks. When America responded, almost no one mourned the fall of the Taleban, who were universally condemned for their fanaticism.
This unanimity of opinion no longer exists. In the five years since the attacks, two audiences for the so-called "war on terror" have emerged. As the "war" progressed, the audience closest to the action began to see the emerging combat in a way that was diametrically opposed to that of the United States and the west.

To the US administration, every act in the drama of the "war on terror" was seen as discrete and self-contained: Afghanistan, Iraq, Palestine and Hezbollah in Lebanon. The Bush administration invaded and occupied countries, and yet failed to see that these events were being linked in the eyes of people in the region. As they sat glued to Al-Jazeera and other Arab satellite channels, they came to view the various battles of the "war on terror" as a chain of events in a grand plot against Islam.

Worse yet, America waved the banner of democracy as it prosecuted its wars. But hopes for democracy have been buried in the rubble and carnage of Baghdad, Beirut and Kandahar.

Many Muslims understand the underlying causes of the alienation that animates Islamic radicalism and violence. They know that the rigid dictatorships of the region have paralysed their populations. Only those consumed by the fires of their rage seem able to melt the shackles of these authoritarian societies.

But the price of escape is a kind of deformation. Embittered, fanatical, vengeful: those who rebel against the status quo enter the wider world seeking retaliation, not just against the regimes that deformed them, but against the west, which propped up the region's authoritarians in the interest of "stability".

Many Muslims also understand that the problem of Palestine goes beyond the suffering of the Palestinian people. They know the region's dictators have used Palestine to justify their misrule and to avoid political and economic liberalisation. So when America called for democracy, the hearts of many in the region soared. But America let them down. As people at last began to hope for more liberal and decent societies, the US continued to endorse the regimes that were repressing them.

After the ousting of the Taleban in Afghanistan, the US turned its sights on the secular dictatorship of Saddam Hussein's Iraq. Instead of encouraging reform of Saudi Arabia's Wahhabi regime - the system that spawned 15 of the 19 hijackers in the 9/11 attacks - it waged war on a regime that had nothing to do with that crime.

The deeper America sank into the Iraqi quagmire, the more it began to turn a blind eye to the region's surviving dictators, particularly those in Saudi Arabia, Syria, Egypt and Pakistan.


So the effort to democratise Iraq - indeed, the entire American project to democratise the region - has fallen under deep suspicion among even the most moderate Muslims. America, they believe, only wants a democracy that suits its interests.

With democracy in most of the region still a long way off, US Secretary of State Condoleezza Rice repeats her mantra that the dead civilians of Beirut, Sidon, Tyre and Gaza represent the "birth pangs" of a new Middle East. But until the west stops regarding dead babies as political props, we cannot understand how the Muslim world perceives all that has happened since 9/11. Only then will we understand why the unified view of five years ago has fractured so violently.

Mai Yamani is the author of Cradle of Islam. Copyright: Project Syndicate. www.project-syndicate.org



http://focus.scmp.com/focusnews/ZZZ9LFL9CRE.html

Friday, September 8, 2006

THE MUSLIM WORLD
Betrayed by the 'war on terror'


MAI YAMANI
   
Prev. Story | Next Story



--------------------------------------------------------------------------------

     


"We are all Americans," wrote Le Monde on September 12, 2001. And so it was with most people in the Muslim world, who were as appalled as anyone else at the carnage of the terrorist attacks. When America responded, almost no one mourned the fall of the Taleban, who were universally condemned for their fanaticism.
This unanimity of opinion no longer exists. In the five years since the attacks, two audiences for the so-called "war on terror" have emerged. As the "war" progressed, the audience closest to the action began to see the emerging combat in a way that was diametrically opposed to that of the United States and the west.

To the US administration, every act in the drama of the "war on terror" was seen as discrete and self-contained: Afghanistan, Iraq, Palestine and Hezbollah in Lebanon. The Bush administration invaded and occupied countries, and yet failed to see that these events were being linked in the eyes of people in the region. As they sat glued to Al-Jazeera and other Arab satellite channels, they came to view the various battles of the "war on terror" as a chain of events in a grand plot against Islam.

Worse yet, America waved the banner of democracy as it prosecuted its wars. But hopes for democracy have been buried in the rubble and carnage of Baghdad, Beirut and Kandahar.

Many Muslims understand the underlying causes of the alienation that animates Islamic radicalism and violence. They know that the rigid dictatorships of the region have paralysed their populations. Only those consumed by the fires of their rage seem able to melt the shackles of these authoritarian societies.

But the price of escape is a kind of deformation. Embittered, fanatical, vengeful: those who rebel against the status quo enter the wider world seeking retaliation, not just against the regimes that deformed them, but against the west, which propped up the region's authoritarians in the interest of "stability".

Many Muslims also understand that the problem of Palestine goes beyond the suffering of the Palestinian people. They know the region's dictators have used Palestine to justify their misrule and to avoid political and economic liberalisation. So when America called for democracy, the hearts of many in the region soared. But America let them down. As people at last began to hope for more liberal and decent societies, the US continued to endorse the regimes that were repressing them.

After the ousting of the Taleban in Afghanistan, the US turned its sights on the secular dictatorship of Saddam Hussein's Iraq. Instead of encouraging reform of Saudi Arabia's Wahhabi regime - the system that spawned 15 of the 19 hijackers in the 9/11 attacks - it waged war on a regime that had nothing to do with that crime.

The deeper America sank into the Iraqi quagmire, the more it began to turn a blind eye to the region's surviving dictators, particularly those in Saudi Arabia, Syria, Egypt and Pakistan.


So the effort to democratise Iraq - indeed, the entire American project to democratise the region - has fallen under deep suspicion among even the most moderate Muslims. America, they believe, only wants a democracy that suits its interests.

With democracy in most of the region still a long way off, US Secretary of State Condoleezza Rice repeats her mantra that the dead civilians of Beirut, Sidon, Tyre and Gaza represent the "birth pangs" of a new Middle East. But until the west stops regarding dead babies as political props, we cannot understand how the Muslim world perceives all that has happened since 9/11. Only then will we understand why the unified view of five years ago has fractured so violently.

Mai Yamani is the author of Cradle of Islam. Copyright: Project Syndicate. www.project-syndicate.org



http://focus.scmp.com/focusnews/ZZZ9LFL9CRE.html

Monday, September 11, 2006

OVERSELLING CLIMATE CHANGE
Inconvenient truths for Al Gore


BJORN LOMBORG
   
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   Cinemas everywhere will soon be showing former US vice-president Al Gore's film on global warming. An Inconvenient Truth has received rave reviews in America and Europe. But, while the film is full of emotion and provocative images, it is short on rational arguments.
It makes three points: global warming is real; it will be catastrophic; and addressing it should be our top priority. Inconveniently for the film's producers, only the first statement is correct. Indeed, many of Mr Gore's apocalyptic claims are highly misleading. But his biggest error lies in suggesting that humanity has a moral imperative to act on climate change because we realise there is a problem. This seems naive, even disingenuous.


We know of many vast global challenges that we could easily solve. Preventable diseases like HIV, diarrhoea and malaria take 15 million lives each year. Malnutrition afflicts more than half the world's population. Eight hundred million people lack basic education. A billion don't have clean drinking water.

In the face of these challenges, why should stopping climate change be our top priority? Mr Gore's attempt at an answer doesn't stand up to scrutiny.

He shows that glaciers have receded for 50 years. But he doesn't acknowledge that they have been shrinking since the Napoleonic wars in the early 1800s. Likewise, he considers Antarctica the canary in the coal mine, but again doesn't tell the full story. He presents pictures from the 2 per cent of Antarctica that is dramatically warming, while ignoring the 98 per cent that has largely cooled over the past 35 years. The UN climate panel estimates that Antarctica's snow mass will actually increase during this century. The movie shows scary pictures of the consequences of the sea level rising seven metres, flooding large parts of Florida, San Francisco, New York, Holland, Calcutta, Beijing and Shanghai. Yet the UN panel on climate change suggests a rise of only 30cm to 60cm during this century.


Financial losses from weather events have increased dramatically over the past 45 years, which Mr Gore attributes to global warming. But all, or almost all, of this increase comes from more people with more possessions living closer to harm's way.


After presenting the case for the potentially catastrophic effects of climate change, Mr Gore unveils his solution: the world should embrace the Kyoto Protocol, which aims to cut carbon emissions in developed countries by 30 per cent by 2010. But even if every nation signed up, it would merely postpone warming by six years in 2100, at an annual cost of US$150 billion. The real issue is using resources wisely. According to UN estimates, for US$75 billion a year we could provide clean drinking water, sanitation, basic health care and education to every human. Shouldn't that be a higher priority?


At the climax of his movie, Mr Gore argues that future generations will chastise us for not having committed ourselves to the Kyoto Protocol. More likely, they will wonder why, in a world overflowing with "inconvenient truths", Mr Gore focused on the one where we could achieve the least good for the highest cost.

Bjorn Lomborg is author of The  Skeptical Environmentalist. Copyright: Project Syndicate. www.project-syndicate.org



http://focus.scmp.com/focusnews/ZZZ5JJL9CRE.html

Tuesday, September 12, 2006

EDITORIAL/LEADER
Control of news not the way to foster harmony



   
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   Given Beijing's warnings of late to dissidents, journalists and lawyers through arrests and tough sentences, its announcement of tighter controls on the inflow of foreign news is unsurprising. The impact is clear: the move will allow the government to control and, when deemed necessary, restrict what people read, hear and see.
It is not clear, however, whether the decision to put Xinhua in charge of distributing and releasing all news from foreign sources is driven by a desire to boost the agency's income, strengthen control over the use of foreign media reports, or both. While from the authorities' viewpoint the move may make sense, seen from outside, it is a bad decision that will further dent the reputation of a government that needs to confront its challenges with well-conceived policies, not by trying to suppress inconvenient reports or pretend that difficulties do not exist.


With the Communist Party's 17th national congress little more than a year away, Xinhua now has a significant role: controlling information. In the lead-up to the event, which will involve important leadership changes, there is an utmost desire by the government to ensure political stability by keeping a lid on speculation. Social stability has become a priority amid protests by people who have fallen victim to inequities created by the shift to market capitalism.

The latest rules are part of a tightening of the government's grip on the media. It was revealed in July that a law was being drafted to punish media outlets, including foreign media, for publishing unauthorised reports on emergencies. By controlling reports of disturbances and corruption, Beijing believes that a greater sense of harmony can be imbued.

Such issues are also covered by the latest regulations, which list what news cannot be distributed on the mainland, including content determined to undermine national unity, sovereignty and territorial integrity, or endanger China's security, reputation and interests. These are matters that can be broadly interpreted and implemented without explanation; even discussion of the value of the yuan could fall into the category of "being in the national interest".

The government perceives it has lost much income from businesses such as investment firms buying information directly from news agencies, which have been aggressively marketing services. As the intermediary, Xinhua can recoup a share of those fees. How far Xinhua will go in implementing the rules is uncertain; it has the power to ensure that only positive news is disseminated.

The latest moves to restrict information are dangerous for a nation seeking to improve the lives of its citizens. Instead of stability, such decisions are more likely to ferment discord through increased speculation and hearsay. Only with a free and fair media can the wrongs of society be righted.


http://focus.scmp.com/focusnews/ZZZ49QL9CRE.html