NEWS, Indonesia: A Supposedly Prime Time for FDI

In the Asian economic crisis of 1997, Indonesia was devastated both politically and economically. The ensuing instability frightened foreign investors and many pulled out of the country. The following decade saw Indonesia’s government drawing new policies to repair the state’s investment environment. One strategic change was the remodelling of government structure which drastically improved transparency. As political stability slowly returned to Indonesia the investment climate also changed for the better.

Today Indonesia is the 17th largest economy in the world (as measured in real GDP). Regarded as the jewel of Southeast Asia, Indonesia is home to the second highest level of biodiversity in the world after Brazil. It is one of the forefathers of ASEAN¹ and a member of G20². Companies such as Coca-Cola, Unilever, and Honda have been established in Indonesia for many years. Recently, the United Arab Emirates has expressed interest for investing over $10 billion in various mining and infrastructure projects.

At the same time, despite expanding interest from Western businesses to foray into Indonesia’s economy, 50% of Indonesians still live on under $2 per day. The gap between rich and poor is on the rise with a growing lower class that currently approximates 40 million. It will be interesting to see whether the investment opportunities Indonesia’s increasingly open market is attracting will level or amplify the country’s income disparity. 


¹The Association of Southeast Asian Nations includes: Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Laos, Vietnam, Cambodia, Burma (Myanmar)

²G20 – Formed in 1999, the Group of 20 brings together 20 of the world’s major economies to discuss key issues in the global economy

NEWS, Hong Kong: Dolce & Gabbana Photo Spat

Credits Associated Press

Riding at the crest of not-so-hidden sentiments that wealthy mainland Chinese are given preferential treatment in Hong Kong is the recent Dolce and Gabbana protest. It all started when one of the Italian fashion house’s stores enacted a policy simultaneously forbidding local Hong Kong residents and allowing mainland Chinese to take photos of the storefront. This blatantly discriminatory statement enraged Hong Kong citizens who accused Dolce & Gabbana of prejudicial treatment on the basis of assumptions on wealth. The incident sparked mass protests outside the store as locals demanded for an apology from upper management.

Dolce and Gabbana’s response? A vague apology of regret declining management involvement delivered at 2 a.m in the morning days after the protest. To many people, this was much too little too late. News of the photo spat spread in a matter of hours through various media platforms. Unchecked discussions and damaging comments were left on various blogs, forums, and D&G’s facebook page. If a tidal wave could be used as a metaphor for the ill-advised policy, Dolce and Gabbana’s inadequate reaction could be likened to the wave’s destructive undertow. Together they have created long-term impairments for the brand’s image.

Poor policy decisions happen. Why though would a prestigious brand such as Dolce & Gabbana put such little effort into managing the outcome of their mistake? If the scanty response was due to a miscalculation of consequences, then this is a juvenile mistake indeed. A recent article published by the Harvard Business Review titled Embracing Complexity purposes that in today’s complex world even good intentions and seemingly brilliant strategies can result in unpredictable outcomes and far reaching consequences. Democratized media channels and consumer scepticism are the realities of the 21st century and companies must be prepared to manage in this environment or risk irrevocable losses.

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NEWS, Hong Kong: Clash of the Chinese

In the past year Hong Kong has seen a large of influx of immigrants and tourists from mainland China. These travelers often spend generously on luxury goods and services invigorating Hong Kong’s economy. However, for the average Hong Kong resident this “invasion” of mainland Chinese sheds a far less positive light.

One point of tension arrives in the form of demand and supply. Ever since the Sanlu milk scandal, many mainlanders have begun to purchase baby milk formula in Hong Kong. This has led to drastic decreases in supplies. In a similar context, rising land prices are being attributed to the increase of mainland merchants. The most heated of these shortage issues however have to do with hospital capacity. Expectant mainland mothers are flooding into Hong Kong and overwhelming local hospitals. The number of non-local emergency room deliveries doubled from 2010 to 2011. Residency rights and the invalidation of the one-child policy are strong magnets for these parents. The result is a rise in hospital fees and a perceived, if not real, decrease in quality of maternity care for both local and mainland patients.

The second part of the problem is more difficult to pinpoint but no less significant. Those unfamiliar with relations between Hong Kong residents and the mainland Chinese may be perplexed to find that a subtle culture clash has always existed between the two. After all both mainlanders and Hong Kong citizens are Chinese people and share the same customs and traditions. Although not untrue on a broad scope, this belief should not be applied to the more delicate aspects of culture such as lifestyle, values, and daily habits. A look at Hong Kong’s colonist history may help to understand the heart of this difference.

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NEWS, Phnom Penh: Trial of the Red Cambodians

The ‘Killing Tree’ at former Khmer Rouge prison Choeung Ek

In 1975, the Communist Party of Kampuchea headed by leader Pol Pot rose to power in Cambodia. More commonly known as the ‘Khmer Rouge’, the party pursued a policy of destructively aggressive agrarian-based communism that devastated its country. Over the course of the next four years, an estimated 21% of Cambodia’s population (1.7 million people) died as a result of the executions, starvation, and rampant diseases that followed this leadership. Intellectuals and anyone suspected of capitalist activities were declared enemies of the state, tortured, and executed. Thousands of stories tell of men, women, and children who witnessed the groundless murders of family members and then forced into enlisting for the regime’s army. Today, over thirty years later, three of the Khmer Rouge’s top leaders are being tried for their alleged crimes against humanity.

In 1998, shortly after the new Khmer Rouge agreed to confer him to the international tribunal, leader Pol Pot died under house arrest. At the time, his “brothers”, the other top commanders of the old Khmer Rouge, were exonerated for their crimes. Many even went to become the founders of Cambodia’s new government. Now, at 85, Noun Chea, the former chief ideologue of the movement is the highest-ranking surviving Khmer Rouge leader. Along with former head of state Khieu Samphan, and former foreign minister Ieng Sary, he is being tried for the genocide of his own people. In his opening statement, Noun Chea argued that American bombing and the “Vietnam factor” (referring the Cambodian people’s fear of annexation by Vietnam) warped the original direction and benign intentions of the Khmer Rouge. When confronted with the mass killings the leaders responded that they “killed only the bad people (for their cause), not the good”.

Victims and the families of victims of the Khmer Rouge have waited nearly four decades for those responsible for the war crimes of 1975 to answer for the gross violations of human rights. However, their hopes in seeking closure are being sorely tested. Since beginning its work in 2005, the UN backed tribunal adjudicating this case has faced challenges from political interference by the Cambodian government. The resulting delays have disheartened victims and investigative judges alike and frustration has caused many parties to drop their claims. More unfortunately still is that this is not the only call for outrage.

Dissatisfaction with the proceedings are echoed in the demands put forth by victims that a wider circle of the Khmer Rouge’s leading elite be put to trial. Yet despite widespread consensus for this motion, Cambodia’s government refuses to allow it arguing that the current trial is an adequate demonstration of justice. This is unsurprising. As many of the former Khmer Rouge leaders have or had senior positions in the government, it is unlikely that such an action would ever be considered.

Although the outcome of the debate of ‘who should be held responsible’ is likely to disappoint many Cambodians, the dilemma brings forth an interesting question. How is the line between victim and aggressor defined? Should a prison guard under direct orders from his superior to kill a man declared to be an “enemy of the state” be accountable for his actions?

In 1961, Steven Milgram, a psychologist from Yale University conducted an experiment to measure the willingness of people to obey authority figures¹. The experiment involved asking (real) participants to apply increasingly high levels of electric shocks to who they believed to be other volunteers. Whenever these “volunteers” failed to learn new information, the (real) participants are ordered to press a button and deliver an electric shot to them. As the shocks intensify, the volunteers pretend to display signs of distress. At the same time, the (real) participants are sternly encouraged by trial supervisors to continue conducting the experiment. 

His findings, which have been repeated many times with consistent results, show that people are often much more likely to heed the instructions of authority figures than to follow their moral imperatives. This sentiment is partially reflected in a statement made by former Khmer Rouge prison guard Hum Hoy. Although he acknowledges his part in the killing of five prisoners, Hum Hoy believes that he should not be legally responsible for his actions. He insists if he had not performed the executions he “would be killed himself”. Out of fear and even selfishness, he did what he had to do which was what he was told to do.

The Khmer Rouge trial is expected to be held over a course of many months. During this time, the Cambodian government’s role in the proceedings will play a large part in determining the type and scope of justice delivered. More importantly, it will set the tone for the country’s future either by re-inspiring confidence in the Cambodian people for their state’s democracy or by dampening once more the spirits of a historically repressed nation. Robert Louis Stevenson once said “Everybody, sooner or later, sits down to a banquet of consequences”. This UN backed tribunal carries the hopes of millions that the consequences of Khmer Rouge may finally be accounted for.

¹The Milgram Experiment: http://psychology.about.com/od/historyofpsychology/a/milgram.htm

Sources:
The New York Times Time Cast, Khmer Rouge Trial Begins
Jake Schoneker’s Videos, Case 002: The Khmer Rouge Trial
The New York Times International Herald Tribune, Defendant Says Khmer Rouge’s Aim Was to Protect Cambodia From Vietnam

NEWS, Las Vegas: Western Republican Presidential Debate

CNN should have borrowed SNL’s band when they were planning The Western Republican Presidential Debate that took place in Las Vegas four nights ago. Stage music would have paired nicely with all the applause, booing, and exchanged glances in the audience. If the number and frequency of raised eyebrows from spectators is any indication for the intensity at display on stage, it would be safe to suppose that most in the Convention Centre left the debate that night more than a little emotionally drained.

Even putting aside all the intellectual content, the debate was surprisingly engaging. Of course, it wasn’t the candidates’ performances alone that made the debate so captivating. The discussion itself raised very relevant and often confrontational questions that were met in return with some equally compelling responses. Certainly, these very same questions set off a queue of finger pointing and sharp rebuttals, but not all of the accusations were groundless, and some exposed bold and real implications.

Looking at the 7 Republican candidates’ respectively and the positions they take on some of the topics at the debate:

Congresswoman Michele Bachmann

Michele Bachmann did not give off an impressive showing at the debate. Despite responding to the questions given to her fluently, her answers often evaded the main gist of the questions. She frequently spun her responses so that they emphasized her own achievements and ambitions instead. Sure, in the end, this is what all the candidates are aiming to do, but it’s only effective if the audience believe they are reaching that conclusion for themselves. It doesn’t work if she is forcing it down their throats. For instance, when asked about her stance on the federal government’s role in the housing crisis in Nevada, she speaks about travelling the country and meeting mothers who have lost homes. Her conclusion, like always, was “I will turn this country around, I will fix it” but she rarely gives a solid explanation of how she plans to achieve that. On the other hand, she makes a good point when she says that anytime Congress is given a brand-new tax, it doesn’t go away - that’s a solid attack on Herman Cain’s 9-9-9 plan.

Former Speaker of House Newt Gingrich

Newt had a decent amount of air time at the debate and his responses were very fair and focused. He appeared knowledgeable, confident, and moderate – not an easy combination to pull off. His stance on health is an excellent example. Despite being critical of Romney’s health plan, unlike the other candidates who have attacked Romney by likening his plan to Obamacare, he concedes that it is in fact not Obamacare. Instead, he pulls apart the plan factually, arguing that it is bureaucratic, costly, and lavish. This showed that Newt knows the facts (at least in this case) and doesn’t take the easy road. Conversely, his response to whether Nevada (Yucca Mountain) should be obliged to open a nuclear repository was met with less reverence. He was for it if the science supported the decision but the other candidates objected arguing it violates states rights. A better option would be to allow other states to bid for this opportunity and be compensated for it. That latter response seems much better thought out.

CEO of Godfather’s Pizza, Herman Cain

Despite not having an extensive political career, Herman Cain is an unmistakable leader. He has strong opinions that seem honest and that he is willing to share even if they may pit him against certain voters. He is able to think quickly on his feet without stumbling or seeming insincere. For instance, when he was called for changing his opinions on whether negotiating with hostages is an acceptable policy, he patiently explained that his first response was taken out of context. He made clear that his real answer depended on whether the negotiations were with terrorists or other parties. On the other hand, Herman Cain’s position on the economy and Occupy Wall Street Movement appear immature and even stubborn. He implies that corporations and banks are not to be blamed for the financial meltdown and that the Obama administration and complaining individuals are where the fault lies. He should watch the Inside Job.

Governor Rick Perry

The governor started off respectably but quickly went downhill from there. His debates with Mitt Romney on issues such as hiring illegal immigrants made him sound childish and impatient. He was even booed by the audience several times for making personal remarks that have already been rebutted and for interrupting the other speaker. Moreover, he took out his frustration on Anderson Cooper, making a snappy comment about how he will answer questions the way he wants to. It’s never a good idea to set yourself against the moderator. On the positive side, Rick had realistic and intelligent ideas about how to secure the US-Mexico border. He knew the costs and the alternatives and put together a reasonable recommendation. For most part though, he seemed confused and appeared to be thinking as he spoke. His response to the question of foreign aid especially was convoluted, misdirected, and met with confusion. In the end, he did manage to twist his rambling around to suggest a cease in funding to the UN. The ensuing applause seems to be out of relief that he finally arrived at a conclusion.

Former Governor Mitt Romney

Mitt Romney was attacked several times over the course of the debate by the various candidates. Rick Santorum pounded Romney on his influence on Obamacare and Governor Perry accused Romney of hiring illegal immigrants. For his part, Romney met the allegations perfectly. He did not lose his temper or his patience. Although his honesty may be in question, his leadership and composure made him the superficial champion. His response to the discussion on foreign aid was very well put and showed thoughtfulness. However, his weakness is in not having any direct opinion on most prevailing issues. Mitt Romney comes up with great explanations and well-designed plans but rarely takes up a straight stance on sensitive topics. This makes him appear vaguely insincere especially against candidates such as Herman Cain and Ron Paul.

Congressman Ron Paul

Ron Paul was composed and imparted a consistent message throughout the entire debate. He sounded educated and experienced and able to deal with America’s economic crisis. His solutions, such as tax cuts, a conservative defensive policy, and opposition to the TARP banker’s bailouts appeared honest. The other candidates were unable to attack his position by any conventional means (E.g. finding him hypocritical or accusing him of making unrealistic promises). Moreover, he was quick to criticize others (seemingly rightly so) such as Herman Cain when they gave “naïve” or unrealistic opinions about the condition of the current economy. The only concern with Ron Paul’s approach would be that it seems to focus more on completely eradicating problems rather than improving them.

Former Senator Rick Santorum

The most interesting speech from Rick Santorum was his attack on Romney’s credibility on the issue of repealing Obamacare. He accuses Romney of essentially being the Godfather of Obamacare. This Romney does not deny but rationalizes by saying that he created it for the use for the state of Massachusetts. Rick becomes a little bit snarky and interrupts during Romney’s turn to speak. Although he makes valid points, the way he handled the debate was not very admirable, certainly not the way you’d expect a president to behave. Perhaps this was why he was left out of much of the discussion – he isn’t being taken seriously even by the other candidates.

One thing that all seven candidates agree on is that Obama and the current administration has failed the United States, particularly in the areas of health care, immigration, and the financial market. Each representative is confident that their individual platform and suggested policies will bring America back to economic prosperity and reinstate the nation as a respected World Power. At this point in time, polls show that President Obama is still preferred (slightly) over any GOP candidate. On the Republican side, Romney is the clear leader and Santorum is in last place. However, the results are constantly evolving and the predictive value of these polls is questionable. 

NEWS, Hong Kong: Occupy Central, The Reach of Social Media

One of seven Louis Vuitton boutiques in Hong Kong, outside Central Station.

Low income Hong Kong resident. (Credits) International Business Times


The Tahrir Square Uprising is arguably the first triumphant large-scale movement launched through the social media platform.  Like any other successful strategy, this tactic has since been adopted by various groups – the most notable being the Occupy Wall Street movement.

Occupy Wall Street is an astonishing demonstration of the power of social media in today’s society.  By capitalizing on the advantages of an increasingly technologically attuned population, the movement has expanded in space, size and influence in an incredibly short time span.  The movement’s message is clear on the surface if complex contextually and its manifesto is broad – to end the financial corruption of Wall Street.  Simply put, protestors (from the said 99%) feel they do not have the economic freedom that they deserve because the nation’s wealth is controlled by a select few (from the said 1%).

How Occupy Wall Street led to Occupy Central

For years, Hong Kong has been recognized by the international community as a leading financial center.  The IFC tower, in Central (the commercial downtown of Hong Kong), is both a beacon and symbol of the successes of Hong Kong’s capitalist economy.  The region’s economic policies are and have been largely free from government intervention as illustrated through low taxation and substantial free trade.  These economic strengths combined with Hong Kong’s close ties with China and strong banking and legal systems have made the region one of the world’s wealthiest economies. 

In lieu of such a reputable status, it is easy to imagine Hong Kong as a flourishing society consisting of a by and large well-off population.  This is not true.  The wealth distribution in Hong Kong is highly asymmetrical and has been given a coefficient of .434 (more imbalanced than the US which has a coefficient of .408) by the Gini Index¹.  Conversely, some argue that steps are being taken to mitigate this issue.  For instance, Hong Kong has recently established a minimum wage floor.  However, set at $3.60 per hour, it is hardly an adequate means of balancing income distribution.  As of 2011, nearly 20% of Hong Kong’s population lives below the poverty line.  With these figures in mind, it becomes clearer how the movement has managed to gain so much support in Hong Kong.

Like many other Occupy Wall Street protests, the campaign in Hong Kong is not very well focused.  The Occupy Central movement was put together by a myriad of organizations from trade unions to leftist groups to individual protestors.  Yet, despite these different agendas, everyone seems to agree on one thing.  Financial opportunism must be controlled, if not eliminated, if the living standards of the majority are to rise.  However, at this point in time, it is uncertain if any political and commercial reforms will be enacted to address the protestants demands.  What we do know though is that significant financial distress is faced by enough of Hong Kong’s population to have carried the movement there from the US.  Protestors are fighting for a “real democracy” where the nation’s political agenda is not manipulated by corporate interests.  Whether or not that is viable remains to be seen.


¹UN Gini Index – Measures the inequality of a distribution; 0 = perfect equality and 1 = maximum inequality.
*2011: Denmark’s wealth distribution is at a coefficient of .247 (lowest) and Namibia is a coefficient of .743 (highest)

NEWS, Guangdong: What happened to the girl was not the bystander effect

A couple of days ago a video was released on a Chinese news channel.  Recorded by a street camera, the video shows a two year old girl, Yue Yue, being run over by one and then another vehicle at a hardware market in the industrial district of Foshan. In the following nine minutes eighteen people witnessed her bleeding on the road but not one gave her more than a cursory glance. Finally, an older woman carrying recycling sees the little girl. She is the first out of nineteen people not only to act but to appear to care at all.

In the video, the 58 year old scrap metal collector, Chen Xienmei, drops her work immediately upon seeing Yue Yue. She demonstrates a basic human instinct that is expected of any capable person regardless of age, socio-economic status, gender, or race. To behave any differently is incomprehensible to so many of us but the chilling reality is that eighteen onlookers simply could not be bothered to step in.

Some people attribute the choices of those eighteen witnesses to the bystander effect.

Bystander Effect
(def.) A social-psychological phenomenon in which individuals fail to offer help to the victim of an emergency situation when there are other bystanders present

This doesn’t seem to be a very good explanation.

The bystander effect claims that individuals are less inclined to intervene in emergencies if other witnesses are present.  This wasn’t the case here because the eighteen onlookers encountered the situation separately. Accordingly, the explanations behind the bystander effect, social influence and diffusion of responsibility¹, do not apply.

What then could even begin to explain the reactions of the eyewitnesses? Perhaps they believed it was a hoax staged by street thieves. Maybe they were afraid of being blamed for what happened if they called attention to the girl. It’s even conceivable that the bystanders doubted their ability to help. Whichever the reason, the onlookers were more concerned with their respective wellbeing than that of a hurt child.

It is possible that this was an isolated incident and not at all representative of the people in the city. However, eighteen is simply too great a number for a coincidence. Still, instead of simply judging their actions, those who condemn these bystanders should try and understand the causes that brought about their choices. How difficult must the lives of those onlookers be that they must live by such selfish values? What can the Chinese government or the international community do to create changes that will transform such distressing perspectives?

This tragedy provokes strong feelings for all those who have heard the story. By putting aside hostile opinions for insightful responses, we can help by promoting kindness to those who have forgotten it and by reflecting our belief in humanity to those who have the power to advance it.

¹Social Influence – E.g. Observing the reactions of other witnesses to gauge what is accepted behaviour – since everyone is doing that (doing nothing), nobody does anything

¹Diffusion of Responsibility – E.g. Everyone is expecting somebody else to intervene so the feeling of responsibility is diffused and no one takes action.

*Bystander Effect – Also known as the Genovese Syndrome from the case of Kitty Genovese

NEWS, Beijing: Raving on the Great Wall

    

It’s a double rainbow! It’s a herd of rabid goats! It’s… it’s a RAVE?!

Stretching 8,850 kilometres across arid deserts, lush highlands and wild meadows, the Great Wall of China is an architectural wonder of the world.  2000 years ago, the Wall served as a form of defensive fortification against foreign invaders.  Today, it is a monument to the unity of the Chinese people and Chinese history…as well as an exotic rave venue.

For over six years, The Great Wall of China has played host to numerous rave parties. This annual summer event is highly anticipated by a select group of Chinese and foreigners and is even attended by renowned local DJs.  Word is that these parties deserve every scrap of hype that surrounds them.

Alcohol, hallucinogens, boys, girls, dancing, suspended melodies and booming beats, and thousands of years of history underfoot. Combine all that with the thrill of being a part of something wildly morally indecent and what emerges is an experience that is matchless in scale.  Together, these elements create an undeniable allure, an allure that adds to the state of abstraction ravers crave.

In 2006, China’s cabinet placed a ban on “inappropriate stunts” to parts of the Great Wall that are in disrepair.  However, regulations targeting raves on the Wall are rarely enforced, and with good reason.  If ravers aren’t damaging the Wall in their pleasure seeking exploits, then why shouldn’t they be allowed to drink and roll and have fun?

The opposition can be easily understood by those who know well the history of the Great Wall of China.  Built by hundreds of thousands of soldiers, convicted criminals, and common people, the Great Wall as we know it today was constructed over a period of several hundred years. This architectural feat is lined with thousands of sacrificed bodies and that warrants a certain kind of respect.

For a wall that spans up to 30 feet at its widest points, the line between glamour and disregard is pretty thin.

Tags: CHINA NEWS

NEWS, Beijing: Another School Bites the Dust

Terraced rice paddies, careening rickshaws, and the odd gambolling panda aren’t exactly images that turn up when we think of China today. In fact, this concept is more or less a distant memory by 2011. 

Shanghai’s World Financial Center, also known as the “Beer Opener” (few other things come to mind once you see it) is the third tallest building in the world and built amidst a sparkling economic hub. Beijing, home to the 2008 Summer Olympics, has in recent years emerged with top brand name shop-towns like Solana, luxury boutique-style hotels like The Opposite House, and a state-of-the-art national stadium – all a radical change from the past.

At the same time, in the Western world, the thought of China is still often associated with a feeling of mystique. Impressions of oriental traditions, stories of the imperial courts, and visions of age-old historical monuments all interweave our notion of modern China. These are not misrepresented beliefs as most of China IS highly agricultural, much of its historical landmarks have been preserved with an air of ancient authenticity, and many Chinese people’s lives DO revolve around deeply-rooted edicts. 

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Tags: NEWS CHINA